Category Spotlights

Mushrooms, while accounting for a small percentage of the produce department, are a stable category in terms of dollar and volume sales. Over the last five years, mushroom performance remained relatively consistent, despite variable sales in vegetables overall. However, volume declines in 2010 are important to evaluate in order to ensure the category remains an essential ingredient vegetable in the produce department.

Mushrooms:  Year in Review

Mushrooms accounted for 1.9% of produce department sales during the 52 weeks ending April 30, 2011. They sold an average of $800 per store per week nationally, up 2% compared to the prior year.

White and brown mushroom sales accounted for the majority of the category with 93.5% of total sales. White mushrooms were nearly flat compared to last year, increasing by 0.2%. Brown mushrooms drove the small growth the category experienced over the latest 52 weeks with a 3% increase in dollars sold.

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 Other mushrooms had the greatest sales increase, up 43% over the previous year. The substantial sales increase can be attributed to the addition of new items. The number of other mushroom items selling (which include Beech, Black Forest and King Trumpet mushrooms, among others) increased 18% in the latest 52 weeks. However, since other mushrooms comprise such a small percentage of the category at 2.3% dollar share, these increased sales had little impact on the category overall and were not able to drive total mushroom growth.

With seasonality not playing a large role in mushroom supply, sales remained fairly steady throughout the latest 52 weeks. Two exceptions were sales peaks in November and December, coinciding with the Thanksgiving and Christmas holidays, when dollars per store per week reached $1,138 and $1,098 respectively.

As is the case in much of the produce department, the organic segment of the mushroom category is growing; and although organic sales contribute a significantly smaller share of mushrooms than conventional items, the category’s organic sales were up 18% in the latest 52 weeks. Top-selling organic brown and white mushrooms led the way in this trend, up 15% and 22.7% respectively to last year.

Evaluating regional differences in mushrooms, the East region led sales with $1,170 per store per week. A gap of $617 occurred between the top-selling East region and the bottom-selling South region, which sold an average of $553 per store per week.

The West region had the most significant dollar sales increase of 4.3%; this was 2.3 percentage points higher than the national average growth of 2%.

The Central region had the only dollar sales decrease, down 2.8% from the previous year. This decrease caused the Central region to drop to the third-highest dollar contributor for the latest 52 weeks; last year this region ranked second in regional sales.

Category Management Toolbox: Historical Sales Analysis

Historically, most sales data dated back just two years, but now suppliers and retailers have the ability to analyze across a longer time period. The Perishables Group recently designed a database and report offering to deliver historical data over the past five years for the grocery channel nationwide. The longer time frame allows for improved analysis to evaluate both the short and long-term effects of various events such as weather, the economy or the introduction of a new competitor to the market place.

Before conducting a historical trends analysis, it is important to understand the methodology for aggregating the stores included in the data set. Across a longer time period, retailers and stores come in and out of a market, changing the store counts. This impacts measures such as total dollars and volume. When examining historical data, it is best to evaluate either a stable environment, using only stores open across the given time period, or a projected view of all available stores to total grocery channel all commodity volume (ACV) for total sales or industry trends reporting.

When focusing on a specific quarter of data, insights may be gleaned in regard to the short-term effects of market conditions. Looking at the economic downtown that began in 2008, vegetable sales hit a five-year low in Q4 2009, with a 5.6% decline in average weekly dollar sales compared to the prior year. The dollar decline can be attributed to price reductions suppliers and retailers took during 2008 in an effort to secure stronger volume movement. During this same time period, mushrooms fared better than vegetables, maintaining steady dollar sales throughout 2009 and not experiencing volatile price changes like other vegetable categories.

However, looking at mushrooms across a longer time period can reveal additional insights not seen in a quarterly analysis. While mushrooms fared better than the vegetable category overall, beginning in 2009, the mushroom category did not experience the dollar and volume success of prior years. The mushroom growth rate became smaller each year, with the first volume decline emerging in 2010. Vegetables saw turbulent dollar and volume performance, primarily driven by price changes, across the time period until 2010. In 2010, vegetable dollar sales stabilized as prices increased, maintaining steady volume sales.

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Comparing mushrooms’ performance to the vegetable category overall is important across this five-year time period to see how mushrooms respond to economic and consumer purchasing changes relative to competitive categories within the produce department. Mushrooms were successful at avoiding the 2009 dollar losses that many other categories experienced. However, further analysis is necessary to understand why mushrooms are not experiencing the strong rebounds that vegetables realized in 2010. Further analysis of mushroom assortment, pricing and promotional strategies are important to ensure the category has the right short-term strategies in place for maintaining and gaining consumers.

Consumer Insights

Mushrooms are one of many “ingredient” vegetables in the produce department. One assumption is that because more consumers are cooking at home, ingredient vegetables are less susceptible to the recent economic downtown. However, in evaluating historical point-of-sale data, it appears not all ingredient vegetables are created equal. Sales performance across ingredient vegetables varied considerably in recent years.

Each ingredient vegetable tells a different story across the five-year time period. Most struggled with volume losses in 2008 and dollar losses in 2009 in response to price shifts. Mushrooms fared better than most other ingredient vegetables during this tough economic environment, with dollar and volume gains all years except 2010, which saw a slight volume decline of 0.4%. Onions also remained stable in terms of volume sales throughout the five year time period. Unlike mushrooms, onions experienced dramatic price decreases. Because volume was steady, this indicates onions are price inelastic; consumers less responsive to price changes for this staple category.

Other vegetable categories did not fare as well. Consumers traded out of the corn category in 2008 due to dramatic price increases; then responded positively in 2009 when prices subsided. 

In 2010, many ingredient vegetables recovered from the 2009 dollar declines. This is primarily due to price increases, most notably from tomatoes, cooking vegetables and onions.

Even with the price increases, all ingredient vegetables except mushrooms and potatoes experienced volume gains in 2010. Onion consumers were once again loyal despite an 18.8% increase in average retail price.

Potatoes, in a second year of price reductions, declined 2.3% in volume sales in 2010. Consumers in 2010 traded out of bargain 10-pound bags of potatoes to 5-pound bags. A 2010 crop shortage also limited the ability to run aggressive promotions, which impacted sales, especially for the large bag sizes targeted at value shoppers. While a small piece of the pie, smaller package sizes continue to grow for potatoes; driving dollars but often reducing overall category volume.