LAS VEGAS — Steve Lutz said two words sum up the current retail situation, at least when it comes to judging consumer behavior buying fresh produce - risk and uncertainty.
Lutz, executive vice president of the Perishables Group, West Dundee, Ill., moderated a workshop entitled "Shifting Consumer Purchase Patterns: Reactions to a Tight Economy" at the United Fresh Produce Association annual conference April 22 at the Sands Expo and Convention Center in Las Vegas. He spoke to a room of about 75 people, focusing mainly on a survey his group undertook the last six months.
"We're basically trying to predict outcome in an uncertain economy," Lutz said. "Everything we knew doesn't seem familiar now."
Lutz said the study was initially conducted during the second and third quarters of 2008, to look at consumer trends as gasoline prices rose to all-time highs, but the Perishables Group then ramped the study back up in the fourth quarter as the U.S. financial system and economy continued their downturns.
It studied cash register scan data from 13,000 retail stores across the country. Loyalty card data was studied from 200,000 households. The group also conducted 1,600 in-store interviews. Lutz said the study uncovered six key consumer trends:
- they were trading down;
- they were moving completely away from some categories;
- they were seeking value by buying less each trip to the store;
- they were stocking up on larger quantities;
- they were changing retail formats, moving from supermarkets to club stores like Costco or larger stores like Wal-Mart Supercenters; and
- they were visiting restaurants less and supermarkets more.
"Despite what's going on in the market, retail activities can have a dramatic impact," Lutz said.
Four produce executives who participated in a question-and-answer panel after Lutz's presentation said their businesses had been affected in various ways by the shift in consumer patterns during the recession.
"It varies by category," said Dan Wasser, global director of category management for Cincinnati-based Chiquita Fresh North America. "Bananas, for instance, are a very price-insensitive commodity. Salad kits, on the other hand, are very price-sensitive. Consumers appear to be trading down, but are remaining in the category."
"I've seen some price deflation in tomatoes," said Mark Cassius, vice president of sales for Willcox, Ariz.-based Eurofresh Farms Inc., one of the largest greenhouse tomato growers in the U.S. "Consumers tend to be trading down to field romas."
As for what lies ahead, Tony Freytag, director of marketing for Crunch Pak, Cashmere, Wash., said remembering what got the industry here would be vital in the recovery.
"I hope we don't forget what we've learned," he said. "We need to continue to deliver the price and value equation."
"We've discovered three things," said Eugene Loudon, director of marketing for Wenatchee, Wash.-based Dovex Fruit Co. "First, try to find out about your consumer. Second, look at price. Third, we're looking at educational (point-of-purchase) material, because people buy what they know."