Retailers must offer conveniently-packaged, value-added produce options in grab-and-go destinations to keep up with consumer demand for personalization.
Fruits and vegetables have long been a universal staple in a healthy, balanced diet, but the latest consumer trends are drastically changing the way we eat them. Once viewed as simply a side dish or “diet” food, produce is becoming the focus of the meal for many consumers. The unrelenting demand for convenience, coupled with the trends toward snacking and healthy lifestyles, has caused considerable growth in packaged produce sales.
Indeed, from 2011-2015, the compound annual growth rates (CAGR) for value-added fruits and vegetables were 12 percent and 15 percent, respectively, according to a 2016 consumer report by Nielsen Fresh. This trend creates a major opportunity for retailers and manufacturers to provide pre-cut, conveniently-packaged and nutritious products for consumers who live a healthy lifestyle, but are short on time.
For years, convenience has been the driving factor for innovation throughout the store perimeter. Particularly in the produce department, suppliers and retailers have been teaming up to offer a plethora of products that are pre-cut, pre-chopped and pre-washed, available in a variety of packaging sizes and styles, or paired with a dip, sauce or side to provide quick, complete meal solutions.
“Convenience can take many forms, but especially coming to the forefront recently is snacking,” says Matt Lally, associate client director at Nielsen Fresh. “Customers continue to replace meals with snacking throughout the day, and produce companies are absolutely responding to this trend. Taking the concept that originated with those fresh-cut fruits and vegetables, and the value-add, and expanding it by adding new combinations of products—integrating cheese or pretzels or dips and making it a more balanced snacking occasion—is something that is really taking convenience and tying it into an idea of snacking as portability.”
The demand for convenient produce snacking options was made clear at this year’s United Fresh convention in Chicago, where Dole won an Innovation Award in the Best New Packaging category for its three snack-size packages of DOLE GO Berries! The product features three snap-off clamshells that contain 4 ounces of strawberries, packaged in ventilated containers for freshness and easy rinsing.
“While stone fruit, bananas and other handheld options are favorite on-the-go snacks, berries are eaten by 75 percent of U.S. households, yet enjoying them away from home has not always been easy,” says Bil Goldfield, director of corporate communications, Dole Food Co., based in Westlake Village, Calif. “After Dole research pointed to this growing mobile-fruit snacking trend, we developed DOLE GO Berries!, the smart solution for busy strawberry lovers looking to enjoy their favorite fresh fruit snack on the go.”
Crunch Pak, a sliced apple provider, also won an Innovation Award for Best New Fruit Product for its Apple Rings, which feature round, sliced circles of fresh apples with the cores removed. The product is available in a variety of flavors, including sweet, tart and a combination of both, and its award-winning packaging technology ensures the product’s freshness, according to Krista Jones, director of brand marketing and product innovation at Cashmere, Wash.-based Crunch Pak.
Slicing Into New Opportunities
While pre-sliced options have become a staple, suppliers, like apple, cherry and pear producer Chelan Fresh, have been brainstorming new, convenient ways to package their produce. “Sliced apples are here to stay,” affirms Mac Regan, director of marketing at Chelan Fresh, based in Chelan, Wash. “But not everybody likes sliced apples, so we introduced the RockIt Apple.” Naturally-miniature, sweet and crunchy, the RockIt Apple is handily packaged in a long, plastic tube of four, providing a healthy, on-the-go snacking solution. Chelan Fresh also offers its cherries in portable packs called Cup O’ Cherries – a container of fresh cherries sealed with a removeable receptacle lid to store the pits.
S. Katzman Produce provides similarly-packaged products, including its Pom Seeds and Goldenberries. A produce wholesaler, the Bronx, N.Y.-based company buys and sells other growers’ products and brands, but after noticing the trend toward packaged produce, the company developed its own brand, Bloom Fresh, and partnered with several growers to develop a retail-friendly line of packaged goods. In 2014, Katzman Produce redesigned its Pom Seeds packaging into a grab-and-go snack pack, stored in a cup with a lid and spoon included underneath.
“The consumer is looking for product that is already cut up or picked out and place packed, or in a convenient grab-and-go type of container,” says Stefanie Katzman, executive manager, Katzman Produce. “Everyone these days is on the run, eating on-the-go or has multiple household members working and coming home late, looking for a quick and easy way to prepare dinner. Packaged salads and packaged healthy snacks are what they need and what they are looking for.”
This is particularly true among parents of young children who juggle hectic daily schedules, but still strive to feed their kids nutritious food. Wenatchee, Wash.-based Stemilt has targeted this demographic with its Lil Snappers line of kid-sized fruit packaged in pouch bags of apples or pears. “They come in the best flavors for kids and are the ultimate portable snack,” says Brianna Shales, communications manager. “Shoppers flock to this package because they market to the intended user (kids) right on the bag, and fit the portion size (small) that kids can actually eat.”
Though convenience remains a top priority, consumers also demand variety in both product options and flavor profiles. Mann Packing Co., based in Salinas, Calif., offers a range of value-added vegetable products, including its pre-cut Family Favorites, Organic Biologique and Culinary Cuts lines; its fresh-washed Fresh Farms line; its meal-ready Nourish Bowls; Snacking Favorites; and its Veggie Slaw Blends. The company recently added organic cauliflower florets and organic green beans to its diverse product lineup, and it continues to introduce new, multicultural flavors to its current offerings.
“The demand for value-added veggies continues to rise, and we have focused on expanding the segment for both conventional and organic,” says Jacob Shafer, senior marketing and communications specialist. “Value-added warm meal kits, like Mann’s Nourish Bowls, were developed by an expert panel of chefs, featuring uber-trending vegetables: kohlrabi, butternut squash, cauliflower, sweet potatoes, kale and sugar snap peas. The bowls are available in trending flavor profiles and are suited for a variety of meal occasions, and can be eaten as a meal or side dish.”
Retailers should work with their suppliers to customize their offerings based on their shopper demographic. Monterey Mushrooms, based in Watsonville, Calif., offers an assortment of mushroom varieties and packaging options, including pre-washed and pre-sliced. The company partners with its retail clients to create customizable planograms and collectively develop programs to increase transactions and market basket size.
“We believe in partnering with our retail customers in collaborative category management,” says Mike O’Brien, vice president of sales and marketing. “Mushrooms are one of the most perishable categories in the produce department. To minimize shrink and maximize sales, it’s important to know your consumer and offer a variety mix that matches your store demographics.”
Getting to the Destination
It is not enough for retailers to simply stock a variety of these trendy, conveniently-packaged products in their stores. To proliferate the trend of personalization, suppliers are urging retailers to properly merchandise their products in on-the-go snacking centers within their stores.
“What retailers need to do is develop a cut fruit section,” Riggan says. “You’ve got to develop a destination for grab-and-go, so when customers come in, they say, ‘I’m going to buy a pack to eat later,’ or ‘I’m going to buy these to eat at the soccer game.’” Creating a designated section for portable produce can influence shoppers to make a purchase they otherwise would not have considered. “You’ll increase your value to the consumer because now you’re offering them something that maybe they didn’t even know they needed, yet it became available,” Riggan adds.
Retailers who have begun to create destination centers have made it easy for shoppers to identify new snacking options that are a quick and easy purchase that satisfies their personalized needs.
Lakeland, Fla.-based Publix Super Markets has done just that with its fresh-cut produce center, offering a range of sliced or cut vegetables – including asparagus, peppers, onions, beets, cauliflower rice and zucchini squash – as well as vegetable cook-in-bags, such as asparagus and mushrooms, cauliflower/broccoli mix and green beans with almonds.
“Our customers are looking for simple, healthier, convenient options in our fresh departments, including cut vegetables in produce,” says Maria Brous, director of media and community relations. “By offering these options, we create convenient side options and meal solutions for our customers.”
Officials at Nielsen believe “vegetable butchers” could be the future of produce. However, creating these destination centers incurs an added expense for the retailer, causing a price premium for the products. In turn, retailers must consider the costs of additional labor, how those costs affect the product price and what that pricing sensitivity threshold is for the consumer. However, industry experts say the importance to the consumer is less about price and more about value.
“You might have to invest short-term to work with your supplier to get customers buying that fruit, but once they realize the convenience of it and the consistency of a good product, I think you’ll be able to command that premium,” says Chelan Fresh’s Riggan.
If retailers can successfully produce an in-store item at a lower price, they could help diversify the product’s appeal by providing a spectrum of prices for the consumers, which can reach a greater audience, says Lally of Nielsen Fresh. “But if the additional labor actually drives up the price, then they really have to make sure the freshness of the product is communicated,” he adds. “Having the right assortment and working with the manufacturers and the innovations and their products is such a critical element, but so is ensuring that when the consumer is facing the product and the shelf, they’re seeing the quality product.”
Sealing the Deal
Especially with produce, the better the product appears to consumers, the more likely they are to make a purchase. Katzman Produce has designed packaging that allows the produce to be easily seen through the container, coupled with bright, attention-grabbing labels. “We design all our packaged product with the following in mind: as much actual product visibility through the packaging as we can, and a bright label that catches the eye,” says Katzman. “We also make sure that we are packing product with high nutritional value and we put that on the packaging as well.”
As consumer interest toward health and wellness increases, manufacturers have amplified their focus on health and nutritional claims on product packaging. Produce naturally falls into the health and wellness category, and while consumers are aware of the nutritional benefits derived from eating fruits and vegetables, they do not always understand what those benefits truly mean.
“There’s such an opportunity to take that one step further and link those claims with the actual benefits of [the product],” says Lally. “So, if you look at the product and it says, ‘Great source of vitamin A,’ we know from research that consumers don’t really understand what that means. What is vitamin A good for? There’s an opportunity to not only count the health elements of it, but link the actual benefit of why it would be right for the consumer.”
Monterey Mushrooms has put a focus on educating its customers about the nutritional value of mushrooms, which provide a great source of vitamin D. The company’s 100-percent vitamin D mushrooms provide the necessary vitamin D requirement in one 3-ounce serving, according to O’Brien.
“One of the larger marketing initiatives for Monterey Mushrooms is promoting the health benefits of mushrooms, especially vitamin D,” says O’Brien. “Mushrooms are the only produce item with natural vitamin D, which is important for strong bones and essential to healthy immune systems.”
The Monterey Mushroom website offers three step-by-step videos and a free, downloadable e-book filled with grilling tips and mushroom recipe ideas. To download the e-book, the site asks consumers a few questions to educate them about mushroom uses and help the company and its retail partners better understand consumer preferences.
Packed with Nutritional Value
Because of the general understanding that produce is healthy and nutritious, advertising has been minimal compared to that of other categories. According to Lally, produce accounts for roughly one-third of all grocery sales, but accounts for just 11 percent of media investment. This presents an opportunity for retailers to fill that gap and dedicate more marketing and media support for produce.
“Advertising fruits and vegetables has not been a huge focus in the past in general because they were viewed as part of the ‘normal’ diet or a side item for a meal,” says Katzman. “Now that we are pitching them to be a meal themselves, or a healthy snack option for adults and children alike, we need to make sure the public knows about it and the stores have them on their shelves.”
Retailers can draw attention to packaged produce and their nutritional value in-store and online, particularly targeting Millennial consumers. “It’s all about driving awareness,” says Riggan of Chelan Fresh. “We have limited ability as a vendor to reach through the stores with our tentacles to grab the consumer. We don’t have that marketing strength or budget, so we need to work with the retailer to drive awareness.”