CHICAGO -- Precuts can yield more mileage if they lead the produce traffic pattern, according to a retail produce executive. Jack Lanners, director of fresh fruits and vegetables at Glen's Markets, Gaylord, Mich., said his store got better results by placing precuts in the first section of the produce department. "We've positioned [precuts] first in line," Lanners said at the Food Marketing Institute's annual convention here during a workshop on value-added produce.
An entire section of precuts is located at the beginning of the traffic flow in each of the company's 25 stores so customers get "maximum exposure to these commodities," he said. Prior to switching the location of precuts in the department, Lanners was positioning lettuce and other salad greens in the front, "which makes for a beautiful presentation" but doesn't generate the level of sales or margins produced with precuts, he said. Lanners has seen "dramatic increases in sales" since last November when precuts were first given center stage. Precut sales have jumped 200% to 300%, he said. They generate 5% to 7% of sales in the produce department and, with their low shrink and high turns, deliver margins of 45% to 50%, Lanners said. He predicted another 1% to 2% increase in precuts' percentage of department sales throughout the summer as demand increases and as he expands his offerings. An additional key to success, he said, is in merchandising and promoting the convenience aspect of precuts. "We like to really push and promote the convenience factor
to consumers," he told the audience of more than 250 food industry executives. To that end, Lanners merchandises his line of precut vegetables -- which includes about 45 different items -- together in one section called the Convenience Garden. He said he tries "to emphasize to customers that we have a full-line of convenience products available." This effort has proved successful. "By far we have generated tremendously higher profits as well as sales from these convenience sections," he said. His philosophy is to sell customers on "convenience first and let them look for price second." Like most retailers selling precuts, Glen's Markets has had to make some changes to equipment with the addition of the new category. While many are installing expensive multideck cases for better display options and better temperature control, Glen's has opted to retrofit existing refrigerated cases with three-step shelving units, or stepped-up case merchandisers.
Lanners said the case merchandisers have helped maintain low case temperatures -- a must for successful precut operations. The shelves "have increased the [temperature] efficiency of the units we have," he said. "They have been a real plus for us because they allow for the air to travel around the product. We set the cases at 35 degrees and it keeps the temperatures low. We haven't had any problems whatsoever." The retrofitted cases are also better for merchandising precuts, Lanners said. They help give "the product maximum exposure and get it up in the customers' eyes and viewpoint. "They help segregate [the product] and give it more definition, as opposed to laying it down and stacking it, which doesn't do the product any good from an airflow standpoint. "You do have to [restock] product more often. It doesn't hold as much product as you would like, but you get greater shelf life, greater visibility and faster turns," Lanners said.
What does the future hold for precuts at Glen's? Definite growth, said Lanners. He plans to expand his precut offerings to include such items as organic salad mixes, vegetable party trays and vegetable pizza kits. He also plans to continue giving high profile to his in-store fresh-cut fruit program. See accompanying story. "To achieve additional produce sales and to be successful with value-added produce, you must be committed to making it work and give it high recognition," he said.