“When the economy turned down, retailers backed off organics and went to local,” Itule said.
New Mexico has a good market for organic produce, but El Paso has only a small organic presence, Delgado said.
“A couple of stores do well with it, but in small amounts in comparison to what I’ve seen in Albuquerque,” he said. “They’re probably more price-conscious in El Paso.”
Organic produce is important for some retailers in the Southwest, but Legend doesn’t feature organic items, Zwillinger said. It occasionally handles some organic produce, but it doesn’t fit the company’s current strategy.
Reinauer said organic produce seems to be a steady segment in the Southwest, but it is not a growth category for Amerifresh. It represents only a small part of its sales.
In Arizona, retailers use specialty produce to stand out from the competition, Itule said. The trend is most visible in high-end supermarkets, but midlevel supermarkets also are beginning to handle small quantities of specialties as a way to hang on to customers, he said.
“Every retail produce department is out there looking for the specialty product that is going to make them stand out from the other stores,” Itule said. “The more unique the item, the more desirable it is for them.”
Although most of Itule Produce’s business is with foodservice and restaurant buyers, its strong point with retailer buyers is in specialties, Itule said. Itule Produce can typically source specialty produce within 24 hours. In December, for example, Itule could source a variety of specialty radishes, baby carrots, baby kohlrabi and all colors of baby beets within a day.
The growth in specialty produce has been occurring for the past two to three years in Arizona, Itule said. He said he thinks consumers have been cooking more often instead of going out, and they look for specialty produce to make meals at home more special.
El Paso is not a strong market for specialties, Delgado said. Instead, produce that appeals to the Hispanic market is very popular.
The Hispanic market is important in the Phoenix metropolitan area, too. Supermarkets designed to appeal to Hispanics are a growth segment, Zwillinger said. The potential for this market has grown considerably during the past three to four years, and Legend’s sales to mercados are a growing part of its business.
Historically, ethnic-driven markets have been important in the Southwest, Reinauer said. As the Hispanic population grows, more retailers are responding to demand and entering the market.