Home Retail IFPA ’23: Promoting, merchandising produce at retail

IFPA ’23: Promoting, merchandising produce at retail

by Ozva Admin

ORLANDO — At an Oct. 27 session of the International Fresh Produce Association’s inaugural convention, Anne-Marie Roerink, director of San Antonio-based 210 Analytics, told attendees that the “roller coaster” she has been on been the agricultural products industry in recent years shows no signs of slowing down.

The ups and downs on that journey include:

  • Inflation (food inflation is now 14%)
  • supply chain issues
  • Russian sanctions affecting supplies
  • Extreme income pressure (record debt, lower savings rate)
  • A world more focused on the home (and therefore retail)

One result of the convergence of these and other factors is that category growth has leveled off at 4-5% in recent months versus last year, versus 11.5% when looking at similar periods of 2020 and 2021, according to IRI data.

But the future for fresh produce is far from bleak, Roerink said.

“Retail profit leaders are betting on fresh, with produce playing a big role.”

A focus on fresh produce, particularly produce and meat and poultry, leads to more transactions and a larger transaction size; order higher margins; It is accompanied by higher sales/hours of labor and lower staff turnover.

Industry profit leaders emphasizing fresh earn 3-5 times the average net profit before taxes.

Produce is among the top drivers of travel for traditional shoppers, Roerink said. Fifty-five percent of trips to the store, she said, include produce purchases.

Of course, inflation is never far from consumers’ minds these days, even when shopping for fresh fruits and vegetables.

Ninety-five percent of consumers are worried about higher prices. In fresh produce, look for smaller pack sizes as a way to keep price points down.

“Creating perception of value will be crucial at 23,” said Roerink.

Get creative with promotions and make plus promotions – it’s a perfect way for retailers to do just that, he added.

Think of having a “happy hour” sale, for example. Or take a cue from industry-standard-setting Wegmans, running promotions that combine fresh produce with other produce department items and let customers know exactly how much they’ll save on a restaurant meal.

“We are finally seeing growth in promotions,” said Roerink.

Promotions are increasing especially for fresh vegetables, Roerink said.

Twenty-two percent of vegetables are now sold on promotion, 8.4% more than the same period last year. Around 35% of the fruit is sold in promotion, 1.7% more.

Retailers can also add value to their produce departments by upgrading their online merchandising games, he added.

“Retailers are awesome at in-store merchandising, not so much online merchandising. Online, there are no limitations to add more information, compared to the store, where there is very limited space in the package and in the store.”

By emphasizing quality, nutrition and versatility, Roerink said, retailers can help overcome consumer price concerns.

Eighty-one percent of shoppers, for example, like to see new product varieties that introduce new flavors or sizes.

Nearly six in ten consumers say price is the most important thing when making their fresh produce purchasing decisions, but other reasons also score high, according to new proprietary research from 210 Analytics.

53% choose quality, 51% nutrition, 42% versatility and 41% maturity.

Value-added sales are also on the up, Roerink said, generating $10.2 billion in sales, representing 14.4% of total product sales, up from 12.4% a year earlier.

You may also like

Leave a Comment