Produce Retailer

In the 52-week period ending Sept. 24, 2011, the citrus category made up 5.2% of produce department dollar sales and was the fifth largest fruit category. Its share of produce sales was 0.2 percentage points less than the previous 52 weeks.

Citrus volume was down 3.0% for the period; however, due to an increase in average retail price, category dollars increased slightly (less than 1%), compared to the previous year. The produce department as a whole performed slightly better than citrus, increasing dollars 3.4% while volume remained steady (-0.6%) during the same period.

In the past year, the major growth area for the citrus category has been mandarins, specifically clementines. Dollars increased 6.5% for mandarins and made up 23.1% of the citrus category, second only to oranges. It seems that increased distribution and consumer preference has grown the mandarin sub-category significantly. In 2006, mandarins made up only 15.3% of the category.

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While oranges are the highest-selling citrus variety, they were not the top performer. In fact, losses in dollars and volume drove down overall category performance. Oranges and grapefruit were the only sub-categories to decrease dollar sales from the previous year, down 5.2% and 2.3% respectively. Limes increased dollars 6.2%, driven by a 13.1% increase in average retail price. Lemons and specialty fruit also increased dollar sales (2.8% and 1.4% respectively), while tangerines sales were unchanged.

Citrus sales varied by region during the 52 weeks ending Sept. 24, 2011. The East region had the highest average weekly sales per store with $3,147, but this was 1.6% less than the prior year. In the Central and West regions, citrus contributed 5.4% of produce department dollars, with average weekly sales of $2,620 and $2,414 per store, respectively. The West had the largest decline in weekly sales per store, decreasing 5.0%. The South region averaged $1,643 per store per week, which drove down the national average to $2,246. However, the South posted the most growth compared to the previous year (4.9%), and combined with the 4.2% growth in the Central region, overcame losses in the East and West to increase the national average by 0.4%.

Like most fruit, the citrus category’s sales fluctuate throughout the year due to seasonality. The winter season is when the most citrus products are available in the U.S. In the 52 weeks ending Sept. 24, 2011, the category’s top-selling week was the week ending Dec. 25, 2010, averaging $3,612 per store. Sales dipped in the fall season, posting the lowest average weekly dollars per store in the week ending Oct. 10, 2010. Mandarins and oranges drove the major fluctuations in sales. Mandarins peaked the week ending Dec. 25, 2010, averaging $1,525 per store, and bottomed at $88 per store the week ending June 4, 2011. The top three weeks for oranges were in Feb. 2011, reaching $1,312 per store. Lemon, lime and grapefruit sales were generally steady throughout the year.
 
A well-conceived consumer marketing strategy paired with the correct platform can help translate consumer awareness into category growth. Though extensive marketing programs are relatively new in produce compared to CPG categories, the produce industry is increasingly dedicating resources to such initiatives.

An example of the success that an integrated marketing campaign can create in produce is seen in citrus’s Cuties Cooperative, Bakersfield, Calif., which distributes Cuties brand citrus for a group of California citrus growers.  

The Cuties Co-op executed an extensive direct-to-consumer marketing campaign with a grassroots feel.  The goal of the campaign was to increase consumer awareness and drive category sales at retail by highlighting California Cuties as a healthy snacking alternative for children. While the campaign targeted moms, Cuties Co-op simultaneously collaborated with retailers by customizing promotional programs to fit each retailer’s needs.

The Cuties Co-op program utilized a variety of tactics, all under the banner of “Cuties are Made for Kids.”

A successful television ad campaign, developed from focus group feedback and targeted at moms, ran for eight weeks in the Atlanta, Chicago and Phoenix markets, boosting sales for both Cuties and mandarins in the Chicago and Phoenix test markets.

To further engage consumers, the Cuties Co-op cultivated a strong online/social media campaign, which included an interactive, Cuties-specific website. This online engagement resulted in the Cuties Facebook page acquiring 29,000 new fans in the past year.

Coupon distribution across Cuties Co-op sponsored community events, which included soccer and other grassroots programs, led to an average coupon redemption rate of nearly 8%, with the most successful event reaching 22% coupon redemption.

Other tactics of the marketing campaign included the launch of the “Good Food Project,” a childhood obesity prevention program, and a “Cooking with Cuties” campaign.

Overall, the integrated marketing program drove sales for both Cuties and the mandarin category; Cuties experienced 130% dollar growth during the campaign period, driving mandarin category sales up 24% during the same period.

Integrated marketing strategies that utilize social media, community-based programs, focus groups and consumer feedback can be tailored to items across categories. The success of programs like Paramount Farms’ is proof that a high level of engagement with consumers garners positive results not just for the specific product, but the category as a whole.   

Consumer Insights: Interaction Index and Consumer Purchase Patterns Have Strong Implications  

Consumers don’t always purchase items in an expected pattern, even within a single category. Examining the interaction index among a category’s buyers (or the incidences of co-purchase in the same transaction) can reveal items prone to substitution and highlight opportunities. These findings have strong implications for optimal merchandising and promotional strategies.

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An analysis of Perishables Group Fresh Facts Shopper Insights, powered by Spire, revealed citrus has weak basket interactions across sub-categories; this implies citrus buyers typically purchase a single citrus fruit at a time. Opportunity to grow citrus category sales lies in enticing the shopper to pick up that second citrus fruit.
The report also revealed strong buyer interaction between grapefruits and tangerines. Nearly 25% of grapefruit buyers also purchase tangerines over the course of a year, and 26% of tangerine buyers also purchase grapefruit.
Although they don’t fulfill similar usage needs, a shared demographic likely drives this interaction.

A comprehensive knowledge of consumer purchasing patterns can also lead to stronger merchandising strategies. For example, oranges account for the highest dollar sales in citrus and are purchased by the greatest number of households, implying oranges fill a unique need for which buyers do not substitute.  Positioning oranges as the anchor of the citrus display and merchandising them with other eating citrus fruits could drive multiple citrus purchases in a transaction.

Interaction reporting also has implications about merchandising strategies for lemons and limes.  These two citrus fruits interact strongly with each other; 41% of lemon buyers purchase limes and 71% of lime buyers purchase lemons. Since lemons and limes do not show strong interaction with other citrus items, they could be merchandised separately to capitalize on their typical use as a garnish or in recipes as opposed to citrus that is consumed for snacking or a meal occasion. Locating lemons and limes near other cooking ingredients such as herbs and garlic may remind consumers to pick up a few to have on hand for recipes.  A secondary display near the liquor department to foster sales for cocktail garnishes could also boost sales.


A well-rounded knowledge of consumer purchasing behaviors, such as interaction, coupled with a strategic plan to apply the information at the store level serves as the foundation for more efficient and successful category management.