The melon category suffered a predictable decline in retail sales and volume in 2011 because of a listeria outbreak, and berries were again a star performer in fresh produce departments.

Berries are the largest produce category, and it gained 7.1% in dollars and 3.7% in volume, according to Steve Lutz, executive vice president of the Chicago-based Nielsen Perishables Group.

Retail sales numbers for fresh produce in 2011 show that total produce sales were up 4.3% in 2011, while volume declined by 1.1%, Lutz said.

The average price for all produce items was $1.42, up 5.5% from a year ago.

“Dollar increases have been driven by price increases with volumes sliding down,” Lutz said.

Berries, peppers lead retail produce sales in 2011With the listeria outbreak linked to cantaloupes in September weighing heavily on cantaloupe sales, the entire melon (cantaloupe, watermelon, honeydew and other varieties) category dipped 2.4% in dollars and suffered a volume decline 6.4% in 2011. The average price for all melon items was 61 cents per pound, up 4.3% from 2010, Lutz said.

Melon volume for December alone was down 18%, the largest drop of any produce category, he said.

Lutz said the performance of the melon category in 2012 will be influenced by a number of variables, including planting decisions and consumer demand.

“If it is like what we saw with spinach going back four years, there was about a six- to eight-month period where they stayed down 20%,” Lutz said. “The history of these things is that you do tend to lose some consumers.”

For retailers, Lutz said the question is whether they can make up for lower cantaloupe sales with increased sales of watermelon or honeydew.

Lutz said retailers are increasing their promoted, or advertised, prices compared with a year ago.

“Promoted prices are quite a bit higher than the non-promoted price increases,” he said. Non-promoted prices were up a little over 4%, while the promoted prices are up 8%.

“It basically means when retailers promote, they aren’t promoting as aggressively as they have in the past and they aren’t getting the (volume) lift,” he said.

Besides berries, fresh-cut fruits and vegetables were a bright spot in 2011, Lutz said.

Packaged salads rebounded somewhat in 2011, Lutz said, as sales grew 2.5% and volume increased by 0.2%.

“They have been declining over the past few years, especially during the recession, as consumers opted for lettuce instead of packaged salads,” Lutz said.

Peppers also recorded a good year in 2011, Lutz said, with dollars up 5.7% and volume up 3.9%.

Onions suffered the biggest drop in dollars sales of any commodity, with sales off 9.4% and volume up 1%. The average price for onions was down 10.2%, so Lutz said lower prices didn’t spur big gains in movement.

Outlook for 2012

After an excellent year in produce sales last year, Gary Myracle, executive director of produce field procurement for Associated Wholesale Grocers, Kansas City, Kan., said price deflation has hit in 2012 in key commodities including lettuce, broccoli, cauliflower and tomatoes.

“Last year at this time the lettuce f.o.b. was three times as much as it is now,” he said.

So far this year, average retail produce prices are running 3% to 4% overall behind the same time a year ago, though volume is up some and sales are tracking close to even.

The berry category has enjoyed an expansion of Florida strawberries in the last five years, in addition to growth in the import deals of Chilean blueberries and Mexican blackberries, Myracle said.

“Florida used to have some good berries but you couldn’t ship them across the street, but now they have got some good berries down there,” he said.

Myracle said the organic category continues with strong growth, with some divisions reporting 40% growth last year in organic sales.

Consumer sensitivity to pesticide and food safety issues may have helped spur the growth, he said.

“The younger people in the marketplace are looking for an alternative for what they have been buying,” he said.

Ed Odron, owner of Odron Produce Marketing & Consulting, Stockton, Calif., said retailers appear to be advertising at hot prices for items like asparagus, apples, tomatoes, oranges, berries and other items so far this year.

“I’m very encouraged with what I am seeing in the ads,” Odron said. “I think it will be a good year for us, with sales up and tonnage up.”

Melons may rebound by summer.

“My barometer on how the melons have rebounded from last year is how we will do in the summertime,” Odron said.

Consumers will come back to the fresh produce department as the economy improves, Lutz said.

“The big unknown is gas prices, because that is so important as an input cost into the product as well as the discretionary income people have to spend on food,” he said.

Nielsen analysts have determined that every dollar increase in the price of gas represents $105 per month in discretionary income, he said.