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Jeff
Gregori
Director, Consumer Information
Retail Services
ACNielsen
Bruno
Cunha
Associate Product Manager
ACNielsen
Almost everyone eats fresh fruit, meat and vegetables. Reaching
penetration levels far above 90%, these perishable categories
represent a gold mine of opportunity for retailers. Viewed
as highly valuable "destination categories" or essential
"perimeter store sales," they can provide the differential
advantage necessary to woo consumers through the doors—time
after time. But as the saying goes, the times are a-changin'.
While fresh foods represent a staple to the palate, sales
are fluctuating due to the tumultuous tide of consumers' demands.
The savvy retailer needs to navigate the aisles carefully,
weighing consumers' needs with changing retail trends [See
chart 1].
Soup'
of the Day
The mantra of convenience still looms heavily. Consumers are
just too darn worn out to cook. Based on a Homescan Panel*Views
survey, 50% of all households agree, "I am so busy and
in such a hurry all day that by dinner, I'm too worn out to
fix a meal that requires much in the way of time or effort."
A "State of the Plate" study on Americans' consumption
of fruits and vegetables, published by the Produce for Better
Health Foundation (PBH), echoes the similar finding that almost
half of Americans believe that convenience is most important
in the foods they choose. While this translates to a decline
in the consumption of many perishable categories including
fresh fruits and vegetables, it also brings rise to the prepared
foods category [See chart 2].
Americans are eating more meals away from home. Nearly one
in six dinner meals is obtained from a restaurant. And families
with kids are the worst offenders. Only 13% of American families
report that they eat the recommended minimum of five daily
servings of fruits and vegetables a day, versus 22% of singles,
27% of empty nesters and 39% of the elderly, reports the PBH.
Retailers can capitalize on this opportunity by implementing
programs aimed at reminding consumers to eat the recommended
five to nine servings of fruits and vegetables a day. According
to the PBH, retailers who instituted "five a day"
programs, whereby in-store promotions were colorful and powerful,
elevated produce sales an average of 8.8%.
It's in the Bag
The convenience craze has brought about a new mix of products,
merchandising and promotions geared toward the over-worked
consumer. The dramatic rise in bagged salads is one such example.
Bagged salads have become the second-fastest-selling item
in U.S. grocery stores after bottled water. For retailers,
this is a win-win solution. Not only do consumers enjoy the
convenience of pre-cut, pre-washed salads, but these products
also lower labor and sanitation costs directly linked with
the produce category itself. Look for more to come on the
packaging front. Innovative companies are working on solutions
that address the needs of today's consumers and supermarket
operators. From convenience to food safety, packaging is a
small detail with huge payoffs [See chart 3].
The rise in pre-packaged fruits and vegetables is also evident
in other traditional "bulk" or "random-weight"
categories, such as meat, deli, cheese and bakery. According
to the ACNielsen Homescan Fresh Foods Channel*Facts report,
UPC-coded products are gaining in importance. While random-weight
meat, fruit and deli still represent the majority of category
sales, the share of UPC-coded selections is growing [See chart
4]. Homescan's fresh foods service provides insight into consumer
purchase behavior for fresh categories and provides a complete
category view by including UPC-coded category counterparts.
Low-carb Equals Less Fruit
While the drive for convenience continues, a new phenomenon
takes shape. Obesity has become a major national problem (see
article, Low Carb: The New Fat Free?). America's obsession
with dieting may be nothing new, but the newest methods of
trimming the fat include anything but—trimming the fat,
that is. Low-carbohydrate diets such as the Atkins, South
Beach and Zone are the craze and are gaining in popularity.
These diets severely restrict, and in some cases completely
eliminate, foods high in carbohydrates. The sale of fresh
fruits and vegetables, rich in carbohydrates, may be compromised
by such diets. While there is no clear evidence to support
this at this time, it may be a contributing factor.
Canadians, on the
other hand, appear to be immune to the lure of low-carbohydrate
diets. According to Statistics Canada, the average Canadian
is eating 16% more carbs than a decade ago. In fact, consumption
of fresh produce continues to grow at high levels. ACNielsen
Canada's Fresh Report indicates that consumers continue to
make perishables an essential part of the Canadian diet, with
fresh fruit and vegetables almost universally purchased and
meat bought by over 90% of households [See chart 5].
In addition, fruit and vegetables are more likely than any
other perishables to be purchased on a regular basis by a
large numbers of Canadians. Nine in ten respondents indicated
that they bought fresh produce the last time they made a major
grocery purchase. By comparison, almost two-thirds of households
included cheese and beef items in their last purchase, with
fresh-baked bread and chicken lagging not far behind.
Fruits of Labor
The average American household buys random-weight perishables
about once a week. Retailers looking for ways to more clearly
define their points of differentiation and to increase both
the penetration and frequency of perimeter-store sales should
concentrate on the mega categories that provide the biggest
payout. A look at random-weight categories using the Fresh
Foods Channel*Facts report reveals the most popular picks.
In the fruit aisle, ensure your bananas are the best around.
Not only do bananas rank the highest of 15 different random-weight
fruits studied, with an 87% penetration, they also drive the
greatest purchase frequency, registering 15 trips per year.
Random-weight grapes and apples require delicate handling
as well. With penetration rates of 72% and 70% respectively,
they both equate to about six trips a year. Penetration rates
are ripe for picking cantaloupes (55%), oranges (46%), peaches
(45%) and watermelons (43%). While there is a sweet turnout
for nectarines and plums (35%), lemons (30%) and berries (31%),
penetration is going sour for pears (29%), cherries (23%),
grapefruits and avocados (21%).
The Farmer's Market
With a good supply of onions, there is nothing to cry about.
Onions outpace the other random-weight vegetables, driving
household penetration at a rate of 75%. Tomatoes run a close
second, with 74% penetration. Households buying potatoes,
peppers, lettuce and cucumbers range from 5063%. Bulk
celery, corn, cabbage and broccoli turn in penetration rates
in the 40% range. Random-weight vegetables represent 47% of
total vegetable dollars and UPC-coded packaged veggies complete
the pie with 53%, indicating that random-weight vegetables
and packaged vegetables compete for similar meal occasions.
Take
a Number
Consumers congregate at the deli counter. The longest lines,
(aside from check-out) can be found at the deli counter. A
great deli department can be used to build store traffic.
It is also a great place to post signage, since consumers
actually have to stop. The most popular deli variety is ham,
with a penetration of 44%. Turkey (40%), roast beef (22%),
bologna (21%) and salami (17%) post double-digit penetration
rates, while chicken (7%), pastrami and corned beef (6%) and
liverwurst (5%) are not as appetizing.
Where's
the Beef?
Clearly the beef is on virtually every table across America.
Fully 90% of all households purchase random-weight beef. Chicken
is the obvious next favorite, with a penetration of 81%. The
other white meats—pork (75% penetration), turkey (50%),
ham (49%), lamb (10%) and veal (6%)—complete the meal.
Considering the
many health benefits of eating fish, it is surprising that
only 30% of all households buy random-weight shellfish, just
22% consume shrimp, and merely 20% eat salmon. The lack of
education about in-home fish preparation, which could be perceived
as a safety and taste risk, may be a contributing factor.
While fish and seafood may be low on the penetration measure,
they represent some of the biggest basket drivers of all random-weight
categories analyzed. Second only to meat, sales of fish and
seafood register dollar rings of $8.60 per trip. Random-weight
meat is the biggest basket driver, posting $10.18 per trip.
The
Future Is Fresh
The good news is that most grocery retailers reach 8090%
of their random-weight perishable shoppers; the key is enticing
them to shop the entire perimeter. Maximize aisle flow. Stock
high penetration categories such as bananas, apples and grapes
in separate areas of the produce department. Pinpoint key
categories for frequent shopper promotions. Tomatoes and onions
are high purchase frequency items. Make these categories more
accessible and leverage them as impulse purchases in other
store sections to enhance meal occasion trips. And finally,
understand your consumers. Target key opportunity segments
with a goal to increase their buying potential. Make the most
of your perimeter, and in turn, it will create opportunities
for the entire store.
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