BOWLED OVER

Cups are not just for beverages anymore.In fact, the fresh-cut produce industry thinks there may be a pot of gold in cups. Companies are rolling out a variety of fruit and vegetable products that fit neatly in car cupholders. The single-serve products are positioned as healthy, convenient snacks for on-the-go consumers of all ages. Still new, cups are not ubiquitous in supermarkets, like packaged

Cups are not just for beverages anymore.

In fact, the fresh-cut produce industry thinks there may be a pot of gold in cups. Companies are rolling out a variety of fruit and vegetable products that fit neatly in car cupholders. The single-serve products are positioned as healthy, convenient snacks for on-the-go consumers of all ages. Still new, cups are not ubiquitous in supermarkets, like packaged salad greens and bowls of cut fruit. Marketers nevertheless think cups have a lot of potential.

"All of my competitors have them," said Paul Kneeland, director of produce for Roche Bros., the Wellesley Hills, Mass.-based retailer with 16 stores in the Boston area. "They claim they're doing very well with them."

Roche Bros. stores carry cut-fruit bowls and will likely test a line of cut-fruit cups from a well-known national produce company starting in the fall, when kids go back to school, Kneeland said. The chain probably will carry the cups in produce and possibly cross merchandise them in the salad bar and fresh prepared foods areas.

Addison, Ill.-based Angelo Caputo's Fresh Markets do not yet carry cups but merchandise larger packages of fresh-cut fruit in multiple locations around the stores. Fresh-cut fruit is a top seller for the Chicago-area chain of four stores, particularly in the summer. When contacted by SN, officials said they were not familiar with cups, but thought they would appeal to local shoppers.

"It's not a bad idea," said Marcus Padilla, a store director at Caputo's store in Hanover, Ill. "The fresh-cut fruit does extremely well here. Since the heat started, it's been skyrocketing."

A number of produce companies showed off the latest fruit and vegetable products in cups at the United Fresh Fruit and Vegetable Association's show at FMI in Chicago this year.

"Everyone was just crazy over them," said Gail Morrison, sales coordinator for Crunch Pak, a Cashmere, Wash.-based fresh-apple processor that introduced 6-ounce "Grab N' Go" cups at the show. "We could not believe how receptive everybody was to them."

Several divisions of Albertsons stores in the western states will roll out Crunch Pak's Grab N' Go cups this summer. Each cup offers sliced apples, a mixture of apples and low-fat caramel dip or apples and grapes. The products, with a guaranteed 21-day shelf life, should be in more than 1,000 stores within a month, said Tony Freytag, director of marketing for Crunch Pak, and one of the company's founders.

It wasn't easy to develop the line. Finding the right container and seal for the fruit was a big hurdle. Officials at Crunch Pak tinkered with and tested cups and seals for more than a year.

"We want people to be able to open them," Freytag said. "A lot of them I've bought, veggie trays or whatever, you've got to put a hole in them with a knife. What we've tried to do is develop a tab pull on the edge in one corner."

Not all companies are embracing cups. After testing cut-fruit cups in retail produce departments about 18 months ago, officials at Sunkist Growers discontinued the line. As an alternative, Sunkist this summer is introducing cut-fruit products in pouches designed for "one-handed" eating, said Rick Harris, general manager of the value-added division at Sunkist.

One of the problems with cups was the retail price, about $1.59 for a 5-ounce item and about $2.50 for a larger parfait cup, Harris said.

"We concluded you want a product that's essentially going to be on a daily buy list," Harris said. "Because of some of the cost that goes into creating fresh-cut fruit in cups, you've got a price point that makes it tough to be on that daily buy list as a single item. We're focused on creating products that'll cost less than $1."

Kneeland of Roche Bros. has reservations about the taste of the fruit. Based on samples he's tried, he thinks some products taste fresh, while others taste more like canned fruit in syrup.

"Some of the items [fruit cups] are very good, some need a little work," Kneeland said. "We want the stuff to be healthy and taste good. The flavor profile is not where I'd like it to be yet. If customers are buying it, that's a great argument for giving it a chance."

Indeed, consumers with busy lifestyles have shown they're willing to compromise on flavor if products satisfy other needs, said Bill Goodwin, president and chief executive officer of Goodwin, a youth brand consulting company based in Media, Pa.

"Cut fruit loses its flavor," he said. "People will give up a little [price and flavor expectations] for the convenience. It's been proven by those [fruit] bowls you see that sell for $6 or $7. We make that compromise every day.

"The best channel for this product is convenience stores."

Officials at Chiquita Brands International reached the same conclusion. The company markets five varieties of 6-ounce Chiquita Fresh Cut Fruit cups exclusively at c-stores operated by Cincinnati-based United Dairy Farmers in Ohio, Kentucky and Indiana, as well as the Cincinnati Airport. Retail prices range from $2.19 to $2.99. Initial response from consumers "has been very positive," said Mike Mitchell, spokesman for Chiquita.

In fall of 2003, the Cincinnati-based company launched the cups, but ultimately discontinued distribution to supermarkets when it became clear shoppers preferred larger packages.

"The larger sizes sold better through the supermarket channel," Mitchell said.

"The 6-ounce cups we think are well-suited to c-stores and other convenience locations because they are the perfect size for on-the-go healthy snacks," he said.

The company thinks the future is bright for single-serve cups.

"With the recent acquisition of Fresh Express, we'll introduce Chiquita Fresh Cut Fruit to many more regions throughout the country, but we're not there yet," Mitchell said.

"We think it's a product in the perfect spot for consumers as they're looking for healthy, convenient food choices," he said. "This is a great opportunity for us to satisfy a real consumer need to provide a healthy snack choice in a convenient package."