U.S.: PMA "very encouraged" by early May fresh produce performance

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A Produce Marketing Association (PMA) representative has said he is "very encouraged" by the performance of fresh produce at U.S. retailers, with dollar sales growth remaining up in the double digits.

In the week ending May 3, fresh produce sales were up 17.2% year-on-year, with vegetables 24% higher and fruit seeing an 11.1% lift, according to IRI data cited in a joint report by 210 Analytics, IRI and the PMA.

“I am very encouraged with the early May fresh produce performance going into the summer months,” said Joe Watson, VP of Membership and Engagement for the PMA.

“As an industry we are working hard to keep the supply moving, putting employee safety and food safety front and center, and consumers are rewarding our efforts with their dollars.

"Additionally, foodservice trucks loaded with fresh produce hitting the roads once more was a very welcome sight this week and I am confident we will see strengthened overall produce demand in weeks to come.”

Grocery stores increase share of fresh produce

Compared with the same week in 2019, fresh produce generated an additional US$205m in sales during the week of May 3. Growth rates were in line with the levels seen during late March and early April, according to Anne-Marie Roerink, president, 210 Analytics.

“The changed everyday demand is driving sizeable sales but the where and when is significantly different as well,” said Jonna Parker, Team Lead, Fresh for IRI.

“Grocery stores have greatly increased their share of fresh dollars in recent weeks, jumping from 60.2% the week of March 8 to 64.2% the week of April 12, for instance.

"This is directly related to shoppers wanting to reduce the number of trips. Likewise, after a few years of stagnant engagement, grocery e-commerce jumped years ahead on its growth trajectory. In a way, it is 2025, now.”

IRI data shows that fresh foods have enjoyed double- and triple-digit growth in weekly spending versus year ago since the week of March 8. Since the week of March 15, fresh e-commerce gains versus last year did not drop below +68% and peaked as high as +105%.

“The gains in fresh foods e-commerce are accelerating, driven by two factors," Parker added.

"First, many retailers and third-party grocery delivery companies had to very quickly ramp up their online capacity, which resulted in great pressure on slot availability early on during the pandemic. Second, there are many shoppers who ordered online for the first time as a result of the pandemic.

"They may have started off with smaller baskets and avoided fresh. But as their comfort with online ordering grows, it is very likely we will see order frequency, basket size and inclusion of fresh items, grow along with it."

Volume/dollar gap widens

The volume/dollar gap widened the week of May 3 to 3.7 percentage points, up from 2.7 points. However, this is much diminished from the week ending April 22, when the volume/dollar gap was 8.9 percentage points.

Both vegetables and fruit saw volume tracking ahead of dollars the week of May 3 versus the comparable week in 2019.

The top three growth items in terms of absolute dollar gains over the same week in 2019 were berries (+$30 million), potatoes (+$23 million) and lettuce (+$18 million).

However, at the category level, big differences continued to exist between dollars and volume in fresh produce, driven by deflationary pressure. Within the top 10 growth items in absolute dollars, significant volume/dollar gaps remain for items, such as peppers, onions and melons.

“On the fruit side, we saw significant difference in dollar growth versus volume growth for items such as pineapples (30 percentage point gap), avocados (18 points) and melons (11 points) this week,” said Watson.

“By and large, these gaps are driven by deflationary pressure on the price per volume. Thinking about entering watermelon season, it is great to see strong demand, up nearly 22% over last year, but the price per volume being down nearly 10% over last year is affecting dollar gains.”

On the vegetable side, onions had a strong 28.9% boost in dollars, but volume sales were up 40.6%, with the retail price per volume down more than 8%.

Others with high dollar/volume gaps were celery (30 percentage points), peppers (18 points) and Brussels sprouts (15 points).

On the other hand, there was some upward pressure as well for other fresh produce items, particularly potatoes, with dollar sales still going strong, at +47.1%, and volume up 34.1%. The average price paid (dollars divided by volume) for potatoes was 9.7% higher versus the same week last year.

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