Robust vegetable sales drive fresh produce retail growth in early April
Fresh produce growth in the U.S. retail sector for the week ending April 12 was the highest year-on-year since March 22, driven by robust vegetable sales.
But the three-way split of the produce dollar between fresh, frozen and shelf-stable continued, with frozen and shelf-stable growth up more than 40% each, according to a report by 210 Analytics, IRI and the Produce Marketing Association (PMA).
Fresh produce increased 16.3% over the comparable week in 2019, putting it slightly higher than the 14.2% registered for the previous week.
This was made up by 25.6% growth in fresh vegetable sales - up from 21.4% the previous week - and 7% growth in fresh fruit, which was on par with the previous week.
Source: Source: IRI, Total U.S., MULO, 1 week % change vs. YA
The week of April 12 marked the year’s earlier Easter as well as the sixth week of the coronavirus-related grocery shopping patterns.
Anne-Marie Roerink, president of 210 Analytics said that since the onset of coronavirus in the U.S., grocery retailing conditions have been "unlike any ever experienced in recent history".
"Unprecedented pantry, fridge and freezer loading by consumers across the United States emptied stores for days and weeks on end, resulting in incredible sales surges and widespread out-of-stocks conditions," she said.
During the week of April 12, many stores further sharpened safety measures, such as metered entry, asking shoppers to limit visits to one person per cart and encouraging consumers to wear masks and to shop just once a week, while avoiding stocking up on any one item.
Jonna Parker, team lead, Fresh for IRI, said there has been some concern in the industry that consumers are perhaps refraining from purchasing fresh produce out of safety worries.
“There certainly seems to be anecdotal evidence of that, but we’re also seeing somewhat lower household engagement for the four weeks ending April 5, at 94.6% versus the 99.3% household engagement over the 52-week look," she said.
"This difference could indeed indicate some people pulling back on fresh produce. At the same time, our survey work shows that 18% of consumers plan to purchase more fresh foods and the rising produce growth rates are evidence of that.”
Joe Watson, VP of Membership and Engagement for the Produce Marketing Association (PMA) said that although Easter is typically a big week for the produce department, the celebrations and dinners were very different in makeup and size this year, which likely affected sales.
"On the other hand, the increased everyday demand on retail produce sales is likely to continue while shelter-in-place mandates are in effect, economic pressure is mounting, and shoppers seek fresh produce to go along with the items they have in their pantries," he said.
"At the same time, the ability for retailers to encourage impulse purchases continues to be a challenge because consumers are spending less time shopping, and focused more on list purchases.
"I expect shopping patterns to remain very different in number, size, day of the week, day part and online ordering trends for a while to come.”
Since the onset of the coronavirus sales patterns, fresh vegetable growth has far exceeded that of fruit, and the week ending April 12 was no exception.
Vegetable sales growth (+25.6%) was nearly 20 percentage points higher than that of fruit (+7.0%), while the two areas are roughly equal in size.
Compared with the same week in 2019, fresh produce generated an additional $196 million in sales, of which $153 million was generated by vegetables.
It is important to point out that SKU rationalization, stockouts and purchase limits may have affected reported gains. For instance, several shoppers commented continued out-of-stocks on the Retail Feedback Group’s Constant Customer Feedback (CCF) program this week.
“I understand we're at trying times and the store only stocks what has been delivered,” said one shopper. “I'm just surprised that they claim the trucking industry has been unaffected, but the store seems slim on pickings.
"For example, produce, not much happening there still. And I don't understand why dairy, including cheese and eggs, is so slight when the farmers are dumping milk. I'd assume the processing plants can't handle it due to schools/colleges closed.”
Watson commented: “While operations warrant the first and foremost focus, continued consumer communications in-store, on social media and websites about store conditions and purchase limits can help set expectations and build understanding among shoppers.
"Stores have an opportunity to offer alternate suggestions for items that are out-of-stocks and provide recipes and meal ideas to help shoppers shake up their routines and prepare items they may not be familiar with.”
Additionally, distributors are finding creative ways of going consumer-direct and some restaurants now selling groceries. Those sales are not reflected in these numbers.