Category Spotlights

Although specialty fruits account for a small percentage of produce department sales, the category is steadily growing. Its rise is driven by multiple factors, including exotic flavors entering the mainstream, growth in its core consumer base and increasing numbers of households purchasing the category across the U.S.

Specialty Fruit: Year in review

The specialty fruit category sold an average of $430 per store per week nationally during the 52 weeks ending Oct. 29, 2011, up 5.8% compared to the previous year. This category growth surpassed the produce department’s 3.4% dollar growth. While the average retail price for the produce department grew by 5.4%, the specialty fruit category saw a smaller 1.6% decrease in average retail price.

Mango sales comprised the bulk of specialty fruit category dollar share, with 40.4% of total sales, followed by kiwi fruit at 17.7%. Mangoes and kiwis also drove category dollar growth, each with increases of more than 10% from the previous year, with mangoes posting the greatest dollar growth of the category. Along with mangoes and kiwis, sapote, star fruit, figs and other specialty fruits grew at a faster rate than the category as a whole. Pomegranates had the category’s largest dip in sales, with a 15% decrease in dollars per store per week. As this is a relatively fragmented category, 11 specialty fruit subcategories had total dollar contributions of less than 1%.

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Regionally, the East had the highest average weekly specialty fruit sales at $542, driven by a 1.3% decrease in average retail price and subsequent increase in volume. The South had the lowest specialty fruit sales, but the region increased 5.8% in dollars per store per week. The Central region experienced the greatest growth in dollar sales — 10.8% — compared to the previous year. Posting the smallest sales increase, the West region’s 4.9% dollar growth was fueled by a lower average retail price and increasing volume.

Specialty fruit sales fluctuated at an expected rate because of seasonality. Weekly dollar sales were highest during the summer season and November 2010. The highest spike in specialty fruit sales occurred the week of May 7, 2011, coinciding with the Cinco de Mayo holiday, with average sales of $602 per store. The category posted its lowest average weekly sales during the week ending Jan. 29, 2011, with an average of $315 per store. Mangoes and pomegranates drove fluctuation in specialty fruit sales. Mangoes peaked the week of May 7, 2011, at $375 per store and bottomed out at $78 per store during the week of Dec. 25, 2010. Pomegranates posted their highest weekly dollar sales — $242 per store — the week of Nov. 6, 2010.  
 
Category management for produce has rapidly evolved during the past 10 years, saturating the market with an abundance of both consumer and performance information. Cultivating this information can be simple; consolidating it to form a complete picture of a category can be difficult. The challenge for the industry is streamlining and filtering this fragmented information to understand its meaning and implications. One example of a tool designed to give a comprehensive, digestible overview of a category and its consumers is a Category A to Z report.

The core components of Category A to Z reports are industry trends, consumer portraits, retail performance and forecasted sales. Understanding these four pillars of information and their interaction with one another provides the basis for more successful category management strategy.

The performance component of the Category A to Z examines national and regional sales trends, purchase size and frequency, and promotion trends. For example, performance data for mangoes — the largest of the specialty fruit subcategories — shows that they account for just over 40% of both specialty fruit volume and dollar sales, and these sales are on the rise.

This information is important, but knowing the drivers and implications of the information is equally essential. Examining the report’s industry trends component helps provide context for statistical data. The overall growth of the mango subcategory (more than 12% growth in both dollar and volume sales compared to the previous year) could be attributed to the population and spending growth of whole mangoes’ core Hispanic consumers. Consumer analysis fills in the final portions of the current state of the category.

For example, in addition to growing U.S. household penetration for both whole and cut mango, the report indicates that mangoes indexed highest among Hispanic consumers. Forecasting completes the picture for the category and helps guide future strategies. According to census data, the U.S. Hispanic population has an estimated growth rate of 200% or more during the next 40 years. It is safe to assume that mango sales will mirror the upward trend, and investing resources to grow the category is worth considering.

The Category A to Z report offers a unique opportunity for more sophisticated category development by giving valuable context and meaning to myriad abstract facts and insights. With a comprehensive road map for understanding category performance and consumer motivation, informed, successful category management is well within reach.

Consumer Insights

To gain an understanding of fruit consumer demographics and lifestyles, simply studying the consumer profile of one fruit category would produce an incomplete picture. Applying blanketed profiling even within a category can be equally problematic. For example, within the specialty fruits category, consumer profiles vary and can affect purchase patterns and behaviors.

Within specialty fruits, subcategories such as kiwis and mangoes have certain similarities in their consumer portraits (e.g., high incomes, college education, upscale urban and suburban lifestyles). However, there are several notable differences to consider as well.

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According to Nielsen data, mango purchases index high among Hispanic and Asian consumers, while kiwis index high among Asian and white consumers. Kiwis index highest among households in upscale urban and suburban areas, whereas mango consumers are more polarized.

Mangoes index highest among households in upscale urban and suburban areas as well as downscale urban areas. Further emphasizing the differences between mango and kiwi consumers, kiwis index well for consumers ages 35 to 64, while mangoes index highest for consumers ages 25 to 54.

The similarities between mango and kiwi consumers are important, but their differences have significant implications for distribution and communications. It is essential to understand the unique consumer characteristics for an item to form a complete and successful category development strategy.