There is an old saying, “You have to strike when the iron is hot.” The proverb has been around for eons and references a blacksmith or farrier at his forge. If he delays in shaping the iron while it is hot, the pliable metal will quickly harden and the opportunity is lost.
Welcome to 2020. Who could have known a short 10 weeks ago that retailers would now be leveraging a strong supply of seasonal fresh fruits and vegetables to lead their companies’ promotional strategies and make their print and digital advertising the best in market, while the fresh meat industry continues with production challenges?
In the initial days of the COVID-19 crisis, the fear of lockdowns and food shortages led to massive consumer demand for fresh meat. In turn, that led to production capacity challenges, then plant shutdowns due to COVID-19 outbreaks.
Those circumstances positioned fresh produce at retail in a somewhat unusual place – leading the promotional features in advertising. In recent conversations, retailers around the country have reported an increase in feature items, including front page, main page and in-store.
Why is this important at this exact time? Because in our recent history it has never been more important to eat more fruits and vegetables to maintain a healthy mind and body and increase immunity to fend off illness. Opportunity knocks.
So what are some best practices for retailers trying to increase promotional activity without having a diminishing return on sales and profits? After all, just putting more items on sale does not guarantee success or drive customer traffic into a store or to the website.
Retailers must develop a method to achieve seasonal success, and because fresh produce is seasonal, regional and local, the items one retailer has available to them for promotion are also available to another at the exact same time. Differentiation becomes an opportunity. How? Product size and varied packaging are two factors that support a sound promotion strategy.
Over the next three months, the fresh produce department will see its annual summer rise, with maximum product availability from growing regions across the country, seasonal fruit and local vegetable deals alike. The key is to mix it up a bit. Do not allow predictability to become a detriment to promotional success.
In-and-out package offerings
Berries – All retailers offer a 1-pound clamshell of strawberries. Consider offering a 4-pound clamshell when market conditions are favorable. That can add huge dollars to weekly sales while protecting the rest of the berry category.
Grapes – It seems every summer there are more varietals coming into market, and retailers are aligning themselves with producers to get the products they need to stay ahead of their competitors. Do not forget about the primary dollar drivers, but do so in a strategic way.
Sure, offer the random-weight bags as the strong base of the grape category, but consider offering and promoting clamshells and clear top-seal packages to supplement the grape category. Table grape producers in California are offering multiple pack types due to consumer demand for packaged products. Opportunity abounds again.
Watermelon – Since watermelon is such a critical item throughout summer, retailers focus heavily on price, so it places a lot of pressure on the size of watermelons retailers will offer. Look at it this way: offering 60-count watermelon will typically be priced better than a 45-count – or 36-count for certain – but there are times when the market conditions provide ample opportunity to promote larger watermelons.
The ring per sale on a larger watermelon will be higher, but also the advantage gained in fresh-cut yield will add margin over and above what smaller watermelons will return.
Potatoes/Onions – Over the past 10 weeks or so, these are two categories that do not need any help – or do they? While demand has been amazing since the COVID-19 crisis began, and because the demand from foodservice and processers has plummeted, there has been an abundance of large- to jumbo-sized potatoes and onions available. Again, this is an opportunity to create sales at retail outside of the normal product offerings within these categories.
Bagged bin promotions are perfect for these items. The normal set does not get interrupted, and the additional sales will be beneficial to the overall department.
Remember the 3 “I”s of produce merchandising:
- Impulse – 40% of produce sales are from unplanned purchases.
- Impact – Great displays stop customers in their tracks.
- Incremental – Increase the customer’s quantity on a particular item or encourage sales of other/related products. What’s your selling proposition?
Be well and be healthy to all!
This column is part of a series by Joe Watson, who spent 30-plus years as the director of produce for Rouses Markets and was named Produce Retailer of the Year in 2014. Joe now serves as a vice president of member engagement for PMA.