Category Spotlights

Packaged products continue to have a strong presence in the produce department, driven by value-added fruits and vegetables, and packaging innovations that improve shelf life, food safety and product handling.

Packaged produce: Year in review

Packaged produce accounted for 42.7% of produce department sales during the 52 weeks ending Feb. 26, and sold an average of $16,038 per store per week nationally, up 4.5% compared with the prior year.

click image to zoomTop 5 Packaged Produce Categories Dollar per Store per Week Evaluating regional differences in packaged produce, the East region led sales with $23,414 per store per week. A gap of $10,754 occurred between the top-selling East region and the bottom-selling South region, which sold an average of $12,660 per store per week.

Berries, packaged salads and potatoes accounted for nearly half of all packaged produce. Because berries make up a large portion (19.4%) of packaged produce, their 7.4% increase in dollar sales per store per week drove the overall growth of packaged produce.

Packaged salads and packaged potatoes declined in sales by 0.8% and 3.3%, respectively, compared with the prior year, prohibiting packaged produce sales from growing further.

Although they account for a significantly smaller percentage of packaged produce sales, cherries had the greatest growth in packaged sales compared with last year, up 50.5%. This substantial increase can be attributed to growth in clamshells and fixed-weight bags available for sale as well as advancements in packaging for the cherry category, such as larger bag sizes and zipper bags.

click image to zoom Produce promotions are increasingly important to monitor where promotional space is limited. The top packaged produce categories were particularly responsive to promotions in the latest 52 weeks. Four out of the top five categories sold a higher percent on promotion than packaged produce overall, which brought in 33.2% of its volume while on promotion. Berries sold the greatest percentage of volume on promotion, at 47.7%, almost 15 percentage points higher than the average. Although a smaller portion of the packaged produce segment, melons had the highest percent of volume sold on promotion for all of the categories, with 49.3%.

Store shelves are becoming more crowded with packaged produce. When examining the number of unique items on store shelves (impressions), packaged produce increased 4.8% from the previous year. All five of the top packaged produce categories had an increase in impressions compared with last year.

Category management toolbox: Annual department drivers review

click image to zoom In day-to-day retail operations, it often is necessary to keep a focus on specific categories to ensure they receive the proper attention and strategies to maximize sales and attract and maintain consumers. However, it’s important also to periodically evaluate the department at a higher level through data as well as trends and consumer preferences that affect purchasing behavior in the department. Consumer environmental concerns, as well as safety and health fears surrounding fresh foods, affect packaged produce across categories.  

Each year, the Perishables Group conducts a comprehensive review of the produce department, evaluating national and regional trends for the year. Multiple data sources are used, including retail point-of-sale data, loyalty card data, promotional and demographic information. One of the key insights garnered from the 2010 study was the significant opportunity to use the produce department to drive overall customer trips. In 2010, consumers averaged 31 trips to the produce department. Of these trips, 43% of the baskets contained multiple items. Both statistics are higher for the produce department than any other fresh department.

click image to zoom Even as tough economic times persist, there are opportunities to capitalize on premium products in the produce department. For example, in the latest 52 weeks ending Feb. 26, organic packaged salad blends were a key driver of category performance.  

The $3.97 average retail price for organic blends was more than 50% higher than the total packaged salad category price of $2.55. Despite this premium, organic blends saw growth of 13.2% and 12.5%, respectively, for dollars and volume per store per week. Overall packaged salad growth was flat, with several varieties declining, including garden salads and kits.

Increased distribution and growth in the number of unique stock-keeping units (impressions) carried in stores drove organic blend sales. Organic blends were the only packaged salad offering to increase distribution, up 0.4%. Impressions per store per week increased 15.8% compared with the packaged salad category average increase of 3.9%.

Fresh ideas in packaged produce

Recent packaging innovations are changing the way families eat their favorite fruits and vegetables. According to the Produce for Better Health Foundation, price, availability and convenience are the three main barriers for moms when it comes to meeting the recommended fruit and vegetable servings. By finding new ways to deliver produce to families in ways that suit busy lifestyles, companies are removing these obstacles.

Fruit pouches, similar to the containers used to feed astronauts, have arrived in the produce department, and they are reinventing the baby food category. The pouches are convenient for munching on the go, do not require utensils and are easy to reseal for later use. Similar to pouches, squeezable products combine unique blends of fruits and vegetables with packaging functionality that is fun and easy for kids.  

New drinkable fruit also is changing beverages sold in the produce department. With combinations of juice and fruit pieces, these products go beyond traditional juices and provide consumers a fruit experience with on-the-go packaging and extended shelf life. These products tout all-natural ingredients, no additional sugar and provide several recommended daily servings of fruits and vegetables.

As consumers continue to have busier lifestyles, more innovation is expected around ways to make fresh produce consumption easier.