Skip navigation
Organically grown.png Richard Mitchell
Standalone sections enable shoppers to locate organic produce more easily.

How to position produce for a growth spurt

Retailers can spur category activity by meeting the unique demands of varying shopper segments

The produce sector is ripe for expansion.

While there was a minimal increase in both volume and dollar sales in the produce category this past year, fruit and vegetable merchandisers can drive even greater activity with innovative marketing and by offering the optimal selections in each outlet, analysts said. 

In 2023, there was a 1.1% increase in volume and a 2.2%, according to Chicago-based market research firm Circana.

Produce already accounts for eight of the top 10 most frequently bought perishable items, along with ground beef and milk, Circana reports, and the sector is benefitting from the greater array of items in a wide range of retail outlets, including big box, discount, club, drug, and convenience stores, and such specialty locations as coffee shops.

Bananas, melons, apples, berries, and grapes had the highest fruit volume sales for the 52 weeks ending March 24, 2024, while potatoes, onions, tomatoes, peppers, and lettuce led in vegetable volume sales, Circana data indicates. 

The average price of fresh fruit and vegetables rose 2.1% and 0.1%, respectively, over the last year.

The availability of produce in varied retail outlets is making it difficult for supermarkets, which account for about 51% of sales, to substantially increase market share without a change in merchandising strategies, said Jonna Parker, Circana team lead for fresh foods. 

While Walmart, for instance, focuses on low price, value, and ubiquity, “a traditional supermarket should stand for something different, such as having unique variety, and not try to be all things to all people,” she said. 

Retailers can also leverage the plethora of consumer purchasing data to determine the best product mix, Parker said. “Baby boomers, Gen Xers, and younger shoppers are motivated by different things,” she said, noting, for example, that younger buyers are more “explorative” with a greater interest in unique flavors.

‘Signs’ of the times

Signage that spotlights interesting food pairings and QR codes that enable shoppers to easily learn about a produce supplier or growing region can drive sales as well by spurring shoppers “to not just buy that one thing they came into the store for,” Parker said.

Such messaging as “24 hours from field to store,” “delivered daily,” and “picked at peak ripeness,” also will create the perception that the retailer is helping shoppers manage waste while providing a great eating experience, said Anne-Marie Roerink, president of 210 Analytics LLC, a San Antonio-based market research and marketing strategies firm and author of the Power of Produce 2024 report.

Spotlighting seasonal items is another major way to prompt unplanned consumer purchases, she said. “That means items with short seasons, like cherries, have tremendous display power,” Roerink said. “Fruit has a big impulse component.”

Produce merchandisers, meanwhile, are benefitting from the increase in shopper visits to stores, she said, noting that customers seeking fresh items are likely to purchase produce during each excursion. “Freshness and quality have moved front and center with the consumer’s eye on food waste,” Roerink said.

While all consumer segments seek produce, stores will help to maximize sales by merchandising items that match the interests of the major shopper groups in each location, she said, noting that Gen Z and millennials often focus on organic and value-added; boomers prefer bulk more than other generations; and Gen Xers opt for cross-merchandising displays that offer time-saving meal solutions. Promotions and secondary produce locations in outlets also are strong sales triggers, Roerink said. 

More waste-conscious shoppers, meanwhile, are seeking items with longer shelf lives while purchasing fewer value-added selections that have shorter lifespans following preparation, including sliced apples and mushrooms; cut watermelon and pineapple; and diced onions, she said. 

Along with effectual in-store merchandising strategies, it is vital that grocers aggressively lean into social media and digital advertising to attract produce customers to stores, Parker said. 

“Produce is the most frequently purchased department in the store by a mile and getting supermarkets to become destinations has to happen outside the outlet,” she said. “Retailers can have amazing displays, stories, and assortments, but if someone doesn’t walk into the store often, it is going to be lost on them.”

Make shopping smooth

Produce departments with wide aisles that enable customers to shop in a comfortable environment can be another store differentiator, said Russell Zwanka, associate professor of food marketing and director of the food marketing program at Western Michigan University in Kalamazoo.

 He added that while most food shoppers are cost-conscious, quality and convenience should trump price in produce merchandising. “Customers buy produce due to freshness, local connection, and seasonality,” Zwanka said. “Other than bananas, price discounts are rarely why anyone chooses produce. You cannot stock up on products that are already turning ripe on the way home from the store.”

To further simplify produce shopping, stores should highlight wide assortments of increasingly popular organic selections in separate sections and offer a range of bagged produce that can be easier to select, checkout, and consume, Zwanka said. He added, however, that pack sizes must be small enough to reduce the prospect of waste.

“Most shoppers want to buy produce, so retailers at the start need to assort and merchandise the selections correctly,” Zwanka said. “Then, look for unique demographic differences that are prevalent near a store.” Retailers, for instance, may only need to carry bok choy, a type of Chinese cabbage, if there is a heavy Asian presence, while expanding pepper varieties in heavily Hispanic areas, he said.

“Customers will be loud and clear on the items they are seeking and want stores to carry,” Zwanka said. “If the department shines, looks fresh, has super variety, and focuses on the season, the produce will sell.

**
While there was a minimal increase in both volume and dollar sales in produce this past year, analysts say that fruit and vegetable merchandisers can drive even greater activity with innovative marketing and by offering optimal selections.

What does produce look like for you now? Do you see an opportunity to grow this category within your store/s?

Let us know in the comments below, or email the SN staff at [email protected].

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish