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From Cauliflower to Tomatoes, Fresh Innovation Spurs Growth in Produce

Dollar growth in the fresh departments in Grocery Stores was 5.5% compounded annually from 2012-2015, eclipsing growth in frozen (0.5%), grocery (1.6%) and dairy (2.4%) according to Nielsen’s recent produce-focused study. Unit growth has also been a strong 3% or more in most fresh areas (including produce, deli, bakery, and seafood) from 2014 to 2105. Meat has had slower growth).

Produce is an important contributor to fresh, perimeter growth, growing at 4% in dollar sales and 3% in unit sales from 2014 to 2015. So it’s interesting to consider what’s been driving this growth in produce.

Value-added Makes ‘Good for You/Healthy’ More Convenient

Value-added has been a strong factor behind the growth, with fresh-cut fruits growing +8% in dollar sales from 2011 to 2015, and fresh-cut vegetables growing +10% over the same period. As we wrote about in Tuning into Mom: Understanding America’s Most Powerful Consumer, the definition of “healthy diet” for many moms is plenty of fruits and vegetables. Value-added fruits and vegetables make it easier to provide a healthy snack of fresh fruit or vegetables or to more easily incorporate produce into main and side dishes. As an example, one brand we wrote about, NatureSweet Tomatoes, built a $200 million+ premium produce business by understanding the needs of its target consumer, a mom of three.

Desire for New Varieties, Farmer’s Markets Make Sampling Easy

Farmer’s markets have exploded in popularity, up from approximately 3,700 outlets in 2004 to approximately 8,300 in 2014. I’m part of that trend, as one of my favorite activities is to walk to the local farmer’s market whenever possible to get fresh produce, and frequently try samples of new fruits and vegetables at the market.

A good example of a new product is in the Mirai corn that consumers eagerly await arriving each summer at Chicago area farmer’s markets. Mirai is corn so delicious it would tempt the pickiest taste bud. The corn is an untapped brand opportunity, as thus far it is only available in Illinois. According to Nielsen, the corn category has shown declines in dollar sales in the most recent year, so it’s time for innovation. While stores like Whole Foods and local farmer’s markets frequently offers produce samples to make trial easy, anecdotally it seems to me that many supermarkets do not or offer only very limited produce sampling, a missed opportunity.


From Cauliflower to Tomatoes, Fresh Innovation Spurs Growth in Produce

Brussels Sprouts and Cauliflower Post Gains (Not to Mention Kale)

Two produce categories that might not immediately spring to mind as highly appealing to all consumers from a taste and texture standpoint are Brussels sprouts and cauliflower. With their distinctive flavor, odor and texture, when I was younger, Brussels sprouts were not extremely popular, and rarely appeared on menus at home or in restaurants. In recent years, Brussels sprouts have exploded on restaurant menus, and since restaurants trends tend to lead home consumption, their supermarket sales will increase for eating at home as well. New ways of eating Brussels spouts, such as using their leaves as a salad vs. eating them cut up or whole as a side dish also help.

From Cauliflower to Tomatoes, Fresh Innovation Spurs Growth in Produce

The Nielsen Perishables report highlighted a “Cauliflower Renaissance,” with cauliflower posting 8% compounded annual dollar sales growth from 2011 to 2015, up to $357 million in annual sales as of April 30, 2016. Innovation in cauliflower has included precut for ease of preparation and new forms like Green Giant’s fresh cauliflower crumbles. These allow the consumer to put “Cauliflower where you least expect it,” for example as a pizza topping. Thinking about the farmer’s markets, the green and purple varieties of cauliflower also add eye appeal and interest.

From Cauliflower to Tomatoes, Fresh Innovation Spurs Growth in Produce

Long considered a sleepy category, produce is now bringing fresh life to grocery store sales. As trends for shopping around the perimeter of the grocery store grow, innovations in produce have significant opportunity for growth. From new varieties of corn to new preparation ideas for cauliflower, successful brands have proven that consumers are seeking out fresh ideas.