No one would argue that events over the past 6 months are going to have a profound and lasting effect on the future of retailing in general and produce specifically. And while a discussion of that future has several caveats to it, here are a few things that I think will become evident.
Produce departments will become smaller. This was already happening prior to the pandemic, but the rise in online shopping, coupled with fewer trips to the store, will cause a significant reduction in space devoted to fresh fruits and vegetables.
I am already seeing display fixtures being shortened or removed and merchandise space being given over to shelf-stable items or non-produce merchandise. Retailers simply can not absorb the shrink that it is occurring from the slowdown in turns.
This will significantly impact the volume of highly perishable items such as stone fruit and soft veg as retailers will not be “mass merchandising” these items in an attempt to reduce spoilage.
Produce department stock-keeping units will decrease significantly. This is a function of the move to online shopping.
Historically, 80% or more of produce sales came from impulse shopping. A consumer would browse through the produce department and discover new or seasonal merchandise that looked good. But the online shopper makes purchase decisions by reviewing an assortment. And there is no way they will take the time to browse 600+ items.
Another factor in this is that the consumer now has in-store personnel doing their shopping for them so they can pick it up or have it delivered. Retailers have been struggling for years with training produce department staff, let alone the thousands of people being used to shop for the consumer. So, assortments will be streamlined to items that can be handled correctly and simply.
Packaging will continue to proliferate. Food safety/traceability and sanitation were driving more packaging before the pandemic. People are more concerned than ever about how their food is handled. There are fewer knowledgeable people doing the shopping for customers; random-weight produce, which needs to be weighed on a scale, is more difficult for in-store shoppers to select for the online shopper.
Brands will become irrelevant. Private label was proliferating in major retailers already. And produce buyers are far less experienced with traditional shipper labels, so they are less inclined to maintain continuity of label on display.
Foodservice was a major driver of many produce brands But with foodservice being decimated by the pandemic, and a slow recovery on the horizon, the retail channel is begin looked at to pick up the slack. Good luck with getting today’s produce buyer to pay a premium!
While there will be many other evolutions of the produce department, I mention these because of their impact on the total produce supply chain. And while the pandemic was not the cause of these changes, it accelerated the rate at which they will take place. All of retailing is being affected, and the produce.
Bruce Peterson is a former produce executive with Walmart and president of Arkansas-based Peterson Insights Inc.