The Evolving Landscape of the U.S. Fresh Foods Market

Even as inflationary pressures nag at consumers wallets, fresh foods remain a healthy part of the American diet. In fact, consumers in the U.S. spend 30% of their food, grocery and personal care expense on fresh foods, according to the Nielsen Global Survey of Fresh Foods. The mix of where consumers shop for fresh, however, is evolving, particularly as retailers learn that customers spend more when there’s fresh food in their shopping baskets.

Although the grocery channel is the leader in fresh foods (accounting for two-thirds of the retail market), fresh is growing in non-grocery channels as retailers respond to consumer demands, says the survey. Most store expansions since December 2005 have been outside the traditional food, drug and mass merchandise outlets, with the biggest growth occurring among warehouse clubs, supercenters, dollar stores and convenience stores. By 2016, Nielsen expects the retail fresh dollar market share to grow to 15% in the hypermarket channel (i.e., combined supermarket/department stores) and to 12% in the warehouse club channel.

Americans shop for fresh foods less frequently than shoppers in other regions of the world—1.4 times per week on average, compared with 2.5 times per week globally. Make no mistake however, fresh foods is a high-traffic builder, say industry observers. Savvy retailers understand that consumers want the option to choose fresh foods anywhere, and they are fighting for the fresh share of wallet.

“Fresh is becoming more complex with greater variety in products and package sizes, more private label/brand options and increased value-added products, such as diced vegetables or pre-marinated meats,” says Bruce Axtman, president, Nielsen Perishables Group. “Understand your shoppers’ generational and health needs to tailor offerings and implement programs that best meet their changing demands.”

Other notable findings include:

  • Respondents in most Asian countries allocate more than 50% of their food, grocery and personal care spending on fresh foods.
  • Spending on fresh foods varies dramatically throughout Europe.
  • Specialty retailers are important destinations for fresh foods in Latin America.
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