Opportunity Knocks for Produce Industry

Opportunity Knocks for Produce Industry

ATLANTA — The “stars are lining up for produce” and both growers and retailers may be entering an extended period of opportunity to build fruit and vegetable sales if they focus on flavor and enhance their marketing efforts, Bryan Silbermann, president and chief executive officer of the Produce Marketing Association, said during his keynote address here at the annual PMA Fresh Summit International Convention and Exposition.

“We have arrived at the intersection of Main Street, Wall Street and Pennsylvania Avenue … the sweet spot where consumer demand, profitability, and public policy all converge,” he said. “This isn't just in the U.S. In country after country around the world, healthy diets that include fruits and vegetables are being promoted at the highest level of government and in public and private partnerships.”

Silbermann went on to cite the U.S. Department of Agriculture's new MyPlate campaign, the World Health Organization's Global Strategy on Diet, Physical Activity and Health, First Lady Michelle Obama's creation of the Partnership for a Healthier America, and recent promises by leading U.S. restaurant chains to ramp up the use of produce during the coming decade.

In fact, according to recent data from Chicago-based Mintel, the restaurant industry is already making progress toward those goals. Since 2007, menu mentions of fruits and vegetables have increased 15%, Silbermann said. The sharpest increase has occurred since 2009. Casual dining chains helped lead the trend, with that sector seeing an 18.6% increase alone.

“And I can't tell you how thrilled I was to see that the most significant growth in fruit mentions took place in kids' meals — up 77%. Vegetables showed a healthy 33% increase in kids meals,” he added. And, consider that Darden Concepts, parent to the largest full-service restaurant company in the world, last month promised to cut calories and sodium across the board during the next decade, and to make its kids' meals healthier with the addition of fruits and vegetables.

This fall McDonald's also began adding fruit to all of its Happy Meals, rather than simply offering it as a substitute side.

The industry still has far to go. According to a recent John Hopkins study, consumers are still not eating enough fruits and vegetables for optimal health, even when french fries are counted as a vegetable.

However, Silbermann pointed out that sales of products described as “superfoods” — like blueberries, pomegranates and green tea — have increased substantially.

“Could it be that better marketing is the missing link [to boosting consumption]?” he asked. “We have to start asking smarter questions, find the right answers — now. Because I for one believe our challenge is about to get harder as a new generation of consumer joins the marketplace.”

Using terms coined by educational games developer Marc Prensky, Silbermann described the generation that's currently coming of age as “digital natives,” and contrasted them with older generations of “digital immigrants.” In developed countries, these digital natives have grown up surrounded by technology, and have never known a world without the Internet. They intuitively speak a language their parents had to learn.

Yet a recent study from Harris Interactive that listed the most trusted brands among these “natives” didn't include any fresh produce companies. Worse, a recent University of Kentucky study indicated that only 25% of this young demographic typically eat fresh fruits or vegetables daily.

“Ignore this native at your peril; they are the most sophisticated, connected consumer our supply chain has ever seen,” Silbermann said. “Remember the first rule of marketing — find out what's important to your audience. Because our consumers have a lot on their minds these days, including survival in an economy unable to stay on an even keel. Younger consumers are particularly worried about their job prospects and chances for advancement.”

More broadly speaking, consumer food shopping trends continue to reflect ongoing economic uncertainty. Supermarket profitability is down as shoppers continue to seek out bargains whenever possible, and the Food Marketing Institute has reported that U.S. consumers now average 1.69 trips to the supermarket each week, the lowest total in 62 years.

But, in a positive sign for the produce industry, “themes like health and wellness, locally grown, fresh, [and] sustainable continue to influence purchases. When it comes to health, heart healthy is solidly in first place according to FMI, followed by more energy, digestion and mind health. But the message alone is not enough. If we do not meet the expectation of flavor, the best messaging will serve no purpose.”

Silbermann later argued that too many growers have had blinders on when responding to the consumer's search for low prices. In tough economic times, price does increase in importance, he said, but the industry may be creating its “own unsolvable problem” by focusing so heavily on price.

“Suspend disbelief for a moment,” he said. “Can a strategy of providing flavor and unique value overcome consumer price sensitivity and increase consumption? Take this a bit further. A price focus screams commodity, a value or flavor focus says ‘my product is unique, my product has value.’ For many of today's consumers, it says ‘buy me.’”

In addition to enhancing their standards for flavor, growers and shippers should note that labeling and packaging is becoming more important, Silbermann continued.

“Consumers are bringing their ideals with them to the grocery store; they are, more than ever before, searching for opportunities to connect to the supplier. How are we addressing that need in our labeling?”