Retail produce sales continue to grow amid restrictions on foodservice

Fresh produce dollar sales at retail climbed again in mid-July as higher numbers of COVID-19 cases prompted many states to reimpose restrictions on restaurants.

Produce sales the week ending July 19 were $1.41 billion, up $154 million from the same time in 2019, according to IRI. Fresh produce overall saw a 12.2% increase from last year, with vegetables up 17.2% and fruit up 8.0%.

“It is becoming increasingly evident that the virus controls much of how market forces will develop in the coming weeks and months,” Joe Watson, vice president of membership and engagement for the Produce Marketing Association, said in the release. “The rise in COVID-19 cases is prompting renewed spending at retail, with everyday demand generating double-digit increases over year ago. But the devastating part is that this is at the detriment of foodservice produce sales.

“Everyone in the produce supply chain benefits from balanced retail and foodservice demand, and this second hit is devastating,” Watson said.

Jonna Parker, team lead for fresh for IRI, noted that fresh departments overall had a strong week, particularly meat and seafood, and vegetables also had above-average growth.

“All these areas have one thing in common, and that is supporting at-home meal occasions,” Parker said. “Early on in the pandemic, our weekly survey of shoppers found that 9 in 10 meals were prepared at home. That number had started to drop as people re-engaged with foodservice, but is rising once more.

“Americans are not used to cooking all meals, all week, and I suspect the big difference this time is the quest for convenience-focused solutions, including value-added produce,” Parker said.

With dollar sales for produce overall up 12.2% compared to 2019, volume sales were up 8.5%. The difference was much more significant for numerous specific items. Avocados, celery, pineapples, peppers and grapes were seeing larger volume gains than dollar gains. On the other hand, corn, cherries, asparagus, melons, mangoes and limes were among the group seeing much larger dollar gains than volume gains.

In the fruit category, melons, cherries, oranges and tangerines experienced double-digit sales increases compared to 2019, and other fruits were also tracking well.

“Berries are an incredible powerhouse, dominating sales week after week with very little help from inflation,” Parker said in the release. “We continue to see a mix of summer fruits and items with longer shelf life, such as apples, oranges and tangerines.

“Melons and cherries had a strong week once more, but we have to keep in mind that prices drove much of the dollar gains, with increases of 16.6% and 22.7% in price per pound versus year ago for melons and cherries, respectively,” Parker said. “Demand for avocados is strong, but dollar gains were pulled down by prices being down 32.1% versus year ago. The bottom line: Fresh fruit cannot rely on impulse alone and will need to drive planned purchases through favorable features and social media outreach.”

In the vegetable category, eight of the top 10 items had double-digit growth compared to last year.

“Whereas the order and items in the top 10 for fruit are very different each week, vegetables has virtually the same lineup each week with just a few items shuffling up or down,” Watson said in the release. “Lettuce is the dominant seller, more than twice the size of number two, tomatoes, yet up 8.5% versus the same week year ago.

“The highest weekly gain percentage goes to corn, at +37.1%,” Watson said. “Much of this increase was fueled by price increases, with volume up 10.7%.”

Fresh-cut salad also saw double-digit growth compared to 2019, with sales up 10.1% to $134 million for the week ending July 19.

“Consumers have a long history of mixing and matching semi- and fully-prepared items with items they cook from scratch,” Watson said in the release. “Fresh-cut lettuce is ideally positioned to address the cooking fatigue many consumers are experiencing and can be leveraged for cross-merchandising with items like rotisserie chicken or ready-made sides for an easy dinner or lunch.”