CHICAGO — The margins are slim, the weather is a continuous threat and the hours are long, but the fresh produce industry is still a money maker and expected to provide increasing revenues for growers, shippers and retailers as Americans pursue better health.
Statistics from the Nielsen Perishables Group showed retailers and other attendees at the United Fresh Produce Association Conference and Expo how much more fresh produce does for a grocer’s bottom line than other departments.
While it only uses 13% of a retailer’s floor space, fresh produce totals 29% of sales, said Joanna Parker, sales director at Nielsen Perishables Group. The fresh produce aisle is a developed department that continues to grow while the center store requires a lot of space for stagnant or diminishing returns, she said.
In the past year, total store annual growth has been 1.1%, Parker said, but fresh produce grew 7% in dollar sales and 3% in volume. She said healthy eating is becoming more important to consumers and campaigns promoting fresh fruits and vegetables are working.
“Other channels are seeing increased produce sales, but that is mainly because they have started stocking new items,” Parker said. “When it comes to fresh produce, 68% of fresh produce dollars are spent in traditional grocery stores.”
Parker increased her focus on fresh produce statistics for the Chicago-based Nielsen Perishable Group in recent months, working with industry to analyze category growth by researching how, where and why consumers shop. The new consumer-driven data model shows that growers and shippers have something retailers increasingly need.
Seven of the Top 10 fastest growing fresh categories are found in the produce aisle, Parker said. Cooking greens saw the highest percentage growth compared to a year ago at 24% representing $362 million in annual sales. Produce aisle beverages came in second at 17% growth in the past year.
Avocados and “specialty fruits” both saw 15% growth. The pumpkin-squash category and the value-added vegetables such as fresh-cut vegetable trays both logged 13% growth in annual sales with citrus fruit coming in at 12%.
Parker said value-added and locally grown are the two biggest trends boosting retailers’ revenues in the produce department, with organics providing growth also. Value-added fruit dollar sales grew 12% and value-added vegetable dollar sales grew 14% in the past year.
Regardless of what commodity they buy and what level of value-added convenience they are willing to pay for, everyone is buying produce — literally. Parker said 100% of households buy fresh produce, spending an average of $333 annually on it.