One good list deserves another.
Following up on our first set of takeaways from the opening day of the United Fresh Produce Association’s annual BrandStorm event, here are a few more highlights from the last two days of the virtual, marketing-centric event.
1. Don’t give up on marketing at the point of sale.
“The point of sale is the strongest marketing point we’ll ever have,” said Roger Pepperl, longtime marketing director for Stemilt Growers. “We may think that’s boring, old, not exciting, but I think it’s super exciting. Where the shopper’s got the shopping cart and their hand out — we’ve got to make that compelling, whether that’s through packaging, the way the product looks stickered, the signage.”
Pepperl, who worked for Meijer as a produce merchandiser and buyer for 20 years before joining Stemilt, acknowledged that point-of-sale is not an easy target.
“It may be the hardest point,” Pepperl said. “It may be the easiest point to get defeated, but we have to keep working at the point of sale. The point of sale is strong. The point of sale digitally is even stronger because we can control it. So I’d say that’s one way we can increase consumption is have good-looking displays, whether they’re virtual or they’re real.”
2. Just say no to private label. (Easier said than done.)
The logic of retailers pushing private label is simple enough; they’re trying to build their brands just as produce companies are trying to build theirs. And on the grower-shipper side, of course no one wants to turn down a sale, even at the expense of brand representation.
Pepperl contends, however, that differentiation is essential for a produce company to thrive long-term, and maintaining a strong brand presence is critical.
“When I say private label is hurting our business, it’s because it’s commoditizing things,” Pepperl said. “Private label adds cost because it doesn’t lower our cost of doing business as a grower, (it) takes away the message, and the one thing it does, it creates (a dynamic where) if Cindy and I were selling the same item into the same private label bag, we’re going to get paid the same amount of money even if Cindy grew twice as good a product.
“So it’s a race to the bottom, it’s a race to the bank to borrow money before you go out of business, and it’s not going to work,” Pepperl said. “It’s easy to blame retail for that, too, but we’ve dug our own grave, too. Commodity is not just something that happens to us. We let it happen to us,”
Cindy Jewell, president of Jewell Marketing, expressed a similar sentiment.
“I’m one of those kicker-screamers that hates any private label because it just kind of undoes all of the work that you’re doing to build your brand, and I think the more we work as an industry to form long-term, strategic partnerships with our customers, the more you get out of that transactional commodity selling, day-to-day stuff,” Jewell said.
“It’s really about focusing on building that brand and explaining why it’s important to sell it as a brand to the buyer. It’s a full package. You can’t just take part of it and say, ‘We love what you’re doing and that’s great, but we’re going to put this into a private label.’ It undoes everything,” Jewell said.
3. Consider how the pursuit of convenience could be affecting consumption.
Convenience has been one of the major consumer trends for years, and value-added produce is a growing category, but the industry might currently be giving consumers too much of a good thing, Pepperl said.
“I look at vegetables, which the latest State of the Plate didn’t read really well for them, and what I’d tell you is you go to a produce department — not all of them — but you go to many of them and you have trouble finding a vegetable that you can buy more than four ounces at a time,” Pepperl said.
“A little sarcasm there, but I think convenience has its place, but every once in a while we’ve got to have a four-foot display of green beans where people go, ‘I haven’t made green beans forever,’” Pepperl said. “And it’s not going to happen the way we sell them all the time.”
He noted that packaging has been adopted for a number of reasons in addition to consumer convenience, including to address labor issues at the store level and to make sure items scan correctly at the register.
“I’m respectful that many times we do need that, but we need to sell some things that are compelling to buy and we cut out some of the cost and let people experience them in more massive, a bigger way,” Pepperl said. “I think we have to have a mix and show some value and some freshness in the stores that we’re not showing to get consumption up. I think we’ve overshot convenience a little bit.”
4. Get to know the Hispanic consumer segment.
The Hispanic population in the U.S. today is 62 million, said Miguel Garcia, vice president of produce and floral for Kroger.
The purchasing power of that group is estimated to be $1.9 trillion by 2023 — an amount larger than the GDP of Brazil, Canada, Russia, South Korea or Spain, said Ramon Portilla, senior director of customer experience and insights for Walmart.
Jorge Gonzalez, vice president of operations for Leevers Supermarkets, noted that 6 in 10 Hispanics are millennials.
“They like to cook, they like recipes, they’re adventurous,” Gonzalez said. “They like to try new things.”
He also noted that many of these younger shoppers base many of their purchases on reviews.
Garcia noted that food and family are big for Hispanic shoppers, and 40% of their basket is produce.
Portilla said Hispanics share new products more than the general population, spend more time on apps and websites on a weekly basis, and overindex on radio — all data that marketers should keep in mind when trying to reach those shoppers.
All three retailers reported that online grocery shopping and digital marketing are significant opportunities moving forward across all consumer segments.
5. Partner with sales to have the greatest success.
Mark Munger, vice president of sales and marketing at 4Earth Farms, described the natural tension between sales and marketing and posed a question to Pepperl and Jewell on how the two can work together.
“Marketing tends to be more strategic, it tends to be thinking down the road and kind of clearing the pathway for sales. Sales is much more tactical and kind of always in today, in crisis mode,” Munger said. “What’s your opinion on how we as marketers make what we do more relevant to sales and to the companies? I guess the question is how do we help them realize it’s more of an investment rather than a cost? What were your strategies as you guys have navigated this field for years with grower-shipper companies?”
Jewell noted that the understanding of the role of marketing has evolved over the years; while in her early days in marketing she was looked at as the person who ordered hats and shirts and organized the convention, the scope and importance of marketing is now given more respect.
“Thankfully, again, going back to the whole ‘strategic partnerships,’ everyone’s had to really elevate their game over the past several years,” Jewell said. “You can’t just go into a meeting with a customer with like, ‘Yeah, we’re going to have more next year, let’s sell more.’
“There has to be a lot more strategy involved, and I think that’s finally where it opened the door for marketers to come in and be part of those conversations and be part of really trying to understand the marketplace, the landscape and really help companies be much more strategic and polished and have their act together before they walk into the room with the retailer,” Jewell said.
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