FMI’s recently published report The Power of Produce reports that, in 2023, fresh produce performance was relatively flat, with a 2.2% growth in dollar volume year-over-year, and a small (-0.3%) drop in units sold. While trips grew versus year-ago, shoppers bought fewer units per trip, likely as a result of mild inflation. Still, dollar sales reached a record $76.4 billion with volume and unit sales holding steady.
According to FMI, only 30% of 2023 consumers reported eating fresh fruits and vegetables daily: an all-time low of the 7-year report. The decline in daily consumption of fresh produce is attributed to shoppers’ continued efforts to balance their spending, along with a shift towards more shelf-stable and frozen produce to reduce at-home food waste.
All together, channel blurring is starting to truly come for the grocery channel. While traditional grocery stores are still the reported preferred place to by produce, fresh produce consumers are further fracturing their spend across an average of two to three different store channels. Notably, 57% of Americans are shopping for fresh fruit and vegetables in mass/supercenters – a 7% jump from only a year ago. Since 2020, the grocery channel’s share of fresh produce sales has dropped from 42.9% of dollars in 2020 to 41.1% in 2023 - a $1.5 billion shift.
Consider, too, the changing tides in the dollar channel, with Dollar General announcing in January they have surpassed 5,000 stores nationwide carrying fresh fruits and vegetables, and it’s clear the grocery channel is at a critical juncture where innovation and experiential design are essential.
This is not to suggest a produce problem as much as it is to emphasize the changing landscape of food retail. Consider too, that VideoMining’s foot traffic trackers reported a 12.3% drop in average weekly in-store traffic per grocery store from 2019 to 2023, and we start to see that, while produce has a clear opportunity, the trends do indicate a necessity for evolution across the total store experience.
For retailers concerned about the fresh produce department as a whole, and those brands in categories of high cross-purchase affinities, there are several opportunities for growth that should be more thoroughly explored. Here are a few that come to mind:
Dayparts and Meal Occasions
Food marketers can look to the role of produce in various meal occasions, which is becoming increasingly important to understand as consumption occasions continue to blur and evolve. To illustrate, FMI reports that among consumers who eat fresh produce daily, 40% reported they “always or usually” include fresh fruit in their lunch (-8% v. YA), while 50% of those consumers reported at lunch for fresh vegetables (-6% v. YA). There is more flexibility and fluidity in meal occasions and the anticipated contents, and that can present an opportunity to nudge and inspire through effective merchandising.
Convenience and Inspiration
Recipe inspiration, cross-category promotions and merchandising can capitalize on these insights, and pilot testing of cross-merchandising campaigns. Food marketers can also look at ways to get creative with fresh produce meal solutions and convenience-driven offerings, such as fresh cut, pre-washed, pre-seasoned produce packages in various portion sizes for various occasions.
Promotional Power
According to FMI, 6 in 10 shoppers check prices and promotions across two or more stores. This perfectly illustrates that no purchase is a guarantee, and sales specials and personalized promotions have a chance to influence the quantity, the type, and the brands that shoppers purchase.
Look to Behavior Labs™ to Unlock In-Store Truths
As always, we believe the best way to look at the self-reported consumer behavior is to contextualize it through observational research - providing a glimpse into what actually happens, and how shoppers actually react, in the moment of choice. Whether you are looking to create the perfect cross-category display for inspiring a beer or wine pairing, or looking to test promotions that effectively drive incremental traffic to the salad dressing aisle - look to Behavior Labs™ to unlock in-store truths to iterate and enhance all your shopper strategies.
