(March 7) VISALIA, Calif. — A retail executive and a consultant warned California citrus grower-shippers March 6 that the fresh produce industry is changing and that they must follow suit. The two highlighted a retail panel at the California Citrus Mutual Showcase.

“The pie is larger, but there are many more pieces,” said Rick Johnson, director of produce and floral for FoodMaxx Markets, a division of Save Mart Supermarkets, Modesto, Calif., of today’s larger produce aisles.

The competition among the fruit categories has forced the 45 FoodMaxx Markets in California to eliminate valencias, except for a small selection of the variety in bags, Johnson said.

He does not anticipate a similar fate for navels. The consumers still demand navels, he said, but he predicted more growth for tangerines.

“Taste is where it’s at,” Johnson said. “If it tastes good, they’ll be back.”

Today’s marketplace and the marketplace of the future are not like the marketplace of years past, said Steve Lutz, executive vice president of the Perishables Group, West Dundee, Ill.

“The business is changing,” Lutz said, “and the consumers have changed.”

The average produce department now offers more than 600 items, more than double the number of a decade ago, he said.

New citrus varieties are expensive to develop, Lutz said, but they generate consumer interest in the category. He pointed to the consumer excitement over personal watermelons, which he said now capture 30% of watermelon sales.

“One challenge is getting new items on the shelves,” he said. “The more important challenge, however, is getting the new items off the shelves.”

If the new items don’t sell, retailers will not reorder, he said.

Successful marketing requires different tools, Lutz said, and he said retailers will demand more and more of suppliers.

Among those demands, he said, is that grower-shippers must know the drivers that move citrus, drivers such as the reasons why an item is purchased and the ability to help retailers identify the keys that produce sales.

Grower-shippers must also think in terms of selling not to an entire chain but to selected stores in a chain, Lutz said. Directors of produce have learned that not all fresh fruit items will sell well in every store in the chain.

“They can’t get away with being right only half of the time,” he said.

The demographics of the FoodMaxx shopper have changed over the years, Johnson said, and so have the hottest selling fruit items.

Honey mango sales in the chain increased 50% from 2004 to 2007, while apples jumped 44%. Johnson said a big reason why apple sales increased were the new varieties, such as Jazz, Pacific Rose, ambrosia and Honeycrisp.

The fruit with the biggest increase, however, is berries. The increase, Johnson said, is driven by the positive health and nutrition news.

“The citrus category may be lagging, but it is not broken,” Johnson said.

Market forces pressure citrus grower-shippers
Rick Johnson, director of produce and floral for FoodMaxx Markets, a division of Save Mart Supermarkets, Modesto, Calif., at the annual California Citrus Mutual Showcase in Visalia, Calif., on March 6.