Posts Tagged “produce sales”
Organic fresh produce items reached almost $5 billion in 2017, an 8 percent increase from the previous year, according to data released by the Organic Produce Network and Nielsen. Overall, nearly 2 billion pounds of organic produce were sold in grocery stores last year, a 10 percent volume increase from 2016.
Partnering with Nielsen, OPN’s review of 2017 organic fresh produce sales at retail stores across the United States shows dollar sales of organic fresh vegetables were $2.4 billion, while organic fresh fruit sales topped $1.6 billion. Nearly $1 billion in organic value-added produce items brought total sales to $4.8 billion in 2017.
Sales of organic fruit volume and dollar sales were up 12.6 percent from 2016 to 2017, while organic fresh vegetable sales showed a 4 percent increase in dollar sales and a 6 percent increase in overall volume. Organic packaged salad was again the leading organic fresh produce item sold last year, approaching $1 billion in sales. Packaged salad still accounts for one in five organic dollars, but the 2.3 percent growth rate was below the department average.
Organic fruits led the growth with a 23 percent increase in organic berry volume sales. Not far behind was the growth of bananas and apples. Organic berry sales, which include strawberries, blueberries and blackberries, topped $586 million in 2017, with volume up 22 percent from last year. Organic apple and banana volume increased 11 and 17.5 percent respectively last year, while the average retail prices for each category down 8 and 3 percent.
“What’s most impressive about these two categories is the growth they were able to achieve in organic despite stagnant or declining conventional fresh produce sales. This also highlights that even the most mature categories have opportunity to grow the consumer base and sales through an organic offering,” said Matt Seeley, co-founder and chief executive officer of Organic Produce Network. “Not many product groups can claim double-digit growth in today’s competitive environment, which reinforces the power and importance of organic produce.”
Rounding out the top five was double-digit growth from organic fresh produce beverages and the herb and spices segment.
“Potatoes, grapes and citrus all rank in the top 10 for conventional sales but fail to crack the top 10 in organic sales, which shows that some categories still have opportunity for an increased market presence, said Matt Lally, an associate director at Nielsen. “Understanding and setting pricing strategies between conventional and organic varieties is critical for success. People will pay a premium for organic, but at some point, they will trade to conventional or out of the category all together.”
Supermarkets remain a “powerhouse in fresh,” despite an ever-growing variety of food shopping outlets, especially fresh produce, which resides as a “supermarket stronghold” among 68 percent of shoppers.
According to Anne-Marie Roerink, who reviewed the results of the Food Marketing Institute’s second annual Power of Produce report, Supercenters (16 percent) are the second most popular outlet for fresh produce purchases, followed next by warehouse clubs (5 percent).
Highlights of this year’s produce shopper study found nearly 25 percent of shoppers switch outlets when purchasing fresh produce versus the bulk of groceries, primarily to full-service supermarkets, farmers’ markets/produce stands and specialty organic stores.
Roerink, principal of 210 Analytics, which prepared the “mega trends” produce study, warned that younger generations are drawn to alternative channels. She sees this as “a red flag for traditional retailers, as losing the produce basket may result in losing additional spending in center store.”
Ringing up a whopping $61 billion in annual sales, fresh produce is in hot demand with no signs of a slow down. Powered by a 4 percent growth rate, the category is a lucrative and influential element for grocery baskets, which average nearly $30 more with fresh produce than one without.
Beyond price, the most successful incremental produce purchase drivers, per the Power of Produce study, include:
- Eye-catching displays, which are extremely influential
- Produce cross-merchandised in other parts of the store
- Impulse through ideation, including recipes, serving ideas and sampling
- Education/information, especially nutrition call-outs that are relevant to the audience
Notably, consumers are placing increased value on transparency – how and where the crop was grown – as evidenced by how support for the local farmers/economy overtook perceived freshness as the top reason for buying locally-grown. This sentiment also applies double-digit sales gains for organic fresh produce and an expressed need for “free-from” products. Still, organic remains a niche segment to date, according to the Power of Produce consumer research study, reflecting 8 percent of total produce sales, with usage skewing to the more affluent shoppers and families with children.
The Organic Trade Association’s 2013 Organic Industry Survey, conducted and produced by Nutrition Business Journal, indicates that the U.S. organic product market continued to climb in 2012, putting more distance between the growth of today and the difficulties of the recession in 2009.
More than 200 companies responded to the survey, which was conducted from Jan. 25, 2013 through April 5, 2013. It includes revenues reported in narrow ranges, sales growth, revenue by product and sales channel breakdowns.
Consumer sales of organic products — both food and non-food — accounted for $31.5 billion in sales in 2012, adding roughly $2.9 billion in new annual sales dollars while also achieving double-digit growth for the first time since 2008.
In the produce category, fresh fruit and vegetable sales continues to lead the way by a huge margin over canned and frozen products. Fresh produce sales in 2012 represented 90.8 percent of total organic produce sales, with frozen organic produce at four percent, canned at 3.45 percent and dried beans, fruits and vegetables at 2 percent.
The survey also indicated that private label and contract manufacturing continue to be important segments of the organic business. While the private label organic product offerings in the mass market channel continue to expand, many large players in this channel indicated that sales growth was down in 2012.
Private label growth is stronger in the natural retail channel, where shopping for organic is easier and consumers clearly understand the value proposition of an organic private label product.