Reverse volume momentum and low inflation/deflation continue to linger for fresh produce.
The United Fresh retail report for the second quarter of this year showed that fresh produce dollar sales for the second quarter were up 1% while volume was off 2.2% compared with the same quarter a year ago. The average retail price was up 3.2% for all produce, according to the report.
Among the top ten fruit commodities tracked by the report, only bananas (+0.9%) and citrus (+8.5%) showed volume gains compared with the second quarter a year ago.
Amazingly, the United Fresh report showed four fruit commodities experienced double digit plus declines in volume: (stone fruit, -28.5%), cherries, (-10.3%), avocados (-12%) and melons (-13.2%).
Among vegetable items, the report showed that tomatoes, onions, and mushrooms suffered volume declines compared with a year ago. while packaged salad surged 5.7% and value-added veggie sales gained 4.4%.
The report said that organic sales growth continues to be a bright spot, with organic produce sales accounting for 10% of total produce dollars for the first time. Overall organic sales in the second quarter were up 7.9% compared with year-ago levels. Of course, that’s below the long-quoted double digit pace of increase, but still much higher than comps for conventional produce.
Meanwhile, the USDA Food Price report issued in late August predicted that supermarket prices will change between -0.25% and 0.75% this year and climb just 1% to 2% higher in 2018.
With competition getting stiffer among brick and mortar, online retailers and discounters Aldi and Lidl, it seems likely suppliers will be pushed for low prices in the months ahead.
The USDA predicts retail fresh fruit prices to change between -0.5% to 0.5% in 2017 and to increase 2% to 3% in 2018. Retail fresh vegetable prices will decrease between 1.5% and 0.5% compared with 2016 this year and increase only zero to 1% in 2018, the USDA said.
Farm level prices for fruit are expected to increase 1% to 2% this year but decrease 7.5% to 6.5% in 2018. Farm level vegetable prices are expected to decrease 2% to 1% this year and drop another 8% to 7% in 2018.
While weather events can certainly change market psychology, the data seems to say that the fresh produce department is lacking the zip in its step right now.