YOUNG HARRIS, Ga. — To remain competitive, retailers and the grower-shippers and distributors that supply them must adapt to the changing consumer who’s buying more food through online channels.
Sept. 26 sessions at the Southeast Produce Council’s fall conference explored produce sales trends and also tackled local produce.
In a future of online grocers workshop, Tony Stallone, vice president of Peapod LLC in Chicago, said food is the fastest growing category in online sales.
“This is a digital world,” he said. “Online groceries are expanding. Things are changing very rapidly. If you’re not thinking about a digital strategy for your business, you should be. We are growing much faster than the brick and mortars.”
During the past five years, Peapod has increased its sales by double-digits with demand growing every year, Stallone said.
Significantly, nearly 50% of the distributor’s sales are conducted through mobile devices, he said.
“Our biggest obstacle now is building capacity to meet demand,” Stallone said. “Demand is out there. Those millenials and the baby boomers, they’re coming more and more into this space.”
Jonna Parker, director of account services for the Nielsen Perishables Group, West Dundee, Ill., said produce represents seven of the 10 top growing categories in fresh.
“Obviously, the produce department is a powerhouse for our retail customers today,” she said. “Fresh is well-positioned for success in the alternate channels. Fresh produce is still predominantly anchored in the grocery channel, but that’s starting to change.”
Parker said sales in the center of the store outside of the produce department are up only 1% and said sales remain flat.
That category is struggling and trying to determine how it can act more like produce purveyors and enter consumers’ baskets more often, she said.
In another discussion, retailers and foodservice distributors attempted to define local.
Lubbock, Texas-based United Supermarkets LLC consider the mileage factor but that produced more questions than answers and involved parameters including from field to store or shipping point to distribution center, said Darvel Kirby, director of produce.
“As big as our area is, it could vary quite a bit,” he said. “It really came down to the question of what’s relevant to the customer. In a customer’s view, the reason local grown is so important is because they are concerned about food safety and freshness. They just desired information. They wanted to know where their produce was grown and who was growing it.”
Because Rosemont, Ill.-based U.S. Foods is a nationwide distributor with facilities throughout the U.S., the company didn’t feel creating a standardized definition of local was the best route for every market, said Matthew Roy, western region category manager of produce.
“It’s easier to build that relationship between consumers and growers, the key for a local program, in retail as it’s a little more challenging in a restaurant environment,” he said. “As our volume may not be what a typical retailer would be, consolidators and the local wholesalers are important for our distribution of local.”