FORECAST '95: VALUE-ADDED TO BE BIG

Fueled by shoppers' growing appetite for convenience, sales of salad mixes and precut vegetables will continue to grow this year. In fruit, tropical items promise to be hot sellers.But no matter what items prove attractive to shoppers, retailers this year will have to grapple with labor issues, whether it's hiring, training or making do with tighter staffs. They'll also have to work harder to market

Fueled by shoppers' growing appetite for convenience, sales of salad mixes and precut vegetables will continue to grow this year. In fruit, tropical items promise to be hot sellers.

But no matter what items prove attractive to shoppers, retailers this year will have to grapple with labor issues, whether it's hiring, training or making do with tighter staffs. They'll also have to work harder to market their products to consumers, who say they want healthier menu options.

These are some of the predictions for 1995 of produce executives polled by SN. "Value-added foods, in one fashion or another, are going to be big," said Tom Anderson, produce director at Nash Finch Co., a Minneapolis-based wholesaler that serves 647 stores and operates 120 corporately owned units. "Not only are salads going to grow, but entrees as well," said Mike Genuardi, director of produce operations at Genuardi Super Markets, Norristown, Pa., referring to produce-based, prepared food items such as pasta with vegetables and Chinese meals. Genuardi predicts value-added will grow due to increasing brand recognition. It has gotten to the point, he said, where shoppers will bypass a salad item on promotion to buy the brand they know and like at full price.

Genuardi said 1995 will see more value-added fruit products, as suppliers learn to grapple with the shorter shelf life of fruit. Fred Romley, produce buyer and merchandiser at Bashas' Markets, Chandler, Ariz., a 68-unit retailer, said convenience items will remain hot, because more and more shoppers are beginning to accept them as being of high quality. Parents don't want to waste time making a salad when they can buy a perfectly good, premade one, he said.

Romley said the proliferation of value-added items will be a major merchandising challenge this year. Most retailers do not have enough space in their departments to carry a full line of value-added items, which for some suppliers are numbering upwards of 60 items now. Most retailers will either cut back on underperforming items, or limit or refuse new items, Romley predicted.

Nash Finch's Anderson agreed. He said he would continue to expand the number of convenience items he carries, but he expects that value-added will reach capacity at some point. Jack Lanners, director of fresh fruit and vegetables at Glen's Markets, Gaylord, Mich., said exotic tropical fruits will be a hot trend in his market. "Mangoes and papayas are two commodities that are gaining momentum. Mangoes are going to be the next kiwifruit," he said. He said he has also seen increased movement in papaya. "'When I advertise papaya in the circular, I can move 600 to 700 cases. For a 25-unit chain in rural, northern Michigan, that's not bad," he said.

America's interest in healthy eating is a trend that will continue into 1995, several retailers said.

According to Nash Finch's Anderson, the trend is gradual, but it is more than just a fad. "Slowly but surely, people are getting healthier," he said.

Anderson said he is a little hesitant to heavily promote the healthy aspects of produce. He said he does post newspaper and magazine clippings that tout the benefits of produce on the sales floor. For Bob Homrich, director of produce and floral operations at Seessel's Supermarkets, a 10-unit independent based in Memphis, Tenn., taking advantage of the health trend will be one of his big challenges in 1995.

"I think it's an educational thing," he said. Homrich said consumers want to eat healthier, but they don't want to give up taste. As for training and labor, Lanners of Glen's Markets said there are more demands on store-level produce managers then ever before. "Today, produce managers have to be sharper than they had to be in the past," he said. "They have to be familiar with more products, and know more technology. It's a tough issue."

Lanners said he is holding more frequent training meetings. "I'm also trying more intensive communication," he said.

"Labor is an issue every year," said Tom Murray, produce director at Roche Bros. Supermarkets, an 11-unit retailer based in Wellesley Hills, Mass.

Murray said better training for everyone in the department, including part-timers, leads to better production. He said he is currently putting together a new training program, that he hopes to implement within the next few months. Genuardi of Genuardi Super Markets said he expected to out source some of the more labor-intensive operations, like fresh-squeezed orange juice and pineapples that are now cored and peeled in-store. Several produce executives said they are bracing for more competition in 1995. Romley of Bashas' estimates his chain is up against nine other major chains right now. "Phoenix is a highly competitive market," he said. Bashas' is a local chain, which Romley says gives him an advantage. "Being aggressive, and being honest to customers is the best way to fight competition."