New FreshFacts on Retail report shows comeback for value-added produce
The newest FreshFacts on Retail report from the United Fresh Produce Association shows that value-added fruits and vegetables saw gains in the third quarter of 2020, reversing a trend of recent declines for value-added fruit.
Value-added fruit sales for the quarter were $817 million, up 5.2% from the same period in 2019, according to the report. Value-added vegetable sales were $420 million, up 11.5% from last year.
Declines for value-added fruit sales in previous quarters were likely driven by “SKU rationalization, reductions in on-site preparation workforce, and less of a need for convenient packaging for work and school lunches,” according to the report. The return to school late in the third quarter may have contributed to the rebound, but it is also expected that many consumers, after months of cooking at home more, are looking for ways to make meal preparation faster.
Snacking is the dominant segment of value-added fruit, while meal prep is the key segment in value-added vegetables. The key growth items across value-added produce overall in the third quarter were watermelons (up 10.8% to $283 million), pineapples (up 11.2% to $112 million), broccoli (up 22.6% to $73 million) and cantaloupe (up 12.7% to $63 million), according to the report.
Value-added fruit accounts for 4.4% of total fresh produce sales, and value-added vegetables accounts for 2.3%.
Organic
The report also highlighted the significant growth in organic produce during the third quarter. The segment pulled in $2.2 billion, an increase of 16.1% from the same time in 2019.
Packaged salad, the top category in organic produce by a wide margin, totaled $369 million in the third quarter, up 16.1% from last year. Organic strawberry sales were $139 million, up 27.6%, and herbs and spices sales totaled $101 million, up 34.1%. Apples, blueberries, lettuce, bananas and tomatoes also saw double-digit increases over 2019.
Packaged salad is the category with the largest organic dollar share, at 25.5%. Organic also accounts for 35.5% of herbs and spices sales and 30.6% of carrot sales, according to the report.
Packaged
The report also found that packaged produce continues to gain share over bulk. Packaged already accounts for more than 50% of all produce dollar sales, and it has recently gained share in seven of the top 10 produce categories.
The highest such growth is seen in avocados and potatoes. For apples and grapes, “growth in packaged seems to be at the expense of bulk,” according to the report.
United found that the increase in packaged produce sales can be attributed mainly to shoppers making more trips and spending more per trip.
Nearly 90% of the growth in packaged comes from people who already buy it purchasing more, while 10% of growth comes from consumers shifting from bulk to packaged, according to the report.
