Getting fresh in your aisles
Canadians have an increased appetite for fresh food and items promoting health and convenience. And they're willing to pay more for them, too.
Looking for growth in your store? Why not compare top performing categories to see which ones had the biggest gains based on dollar sales? A look at dollar sales growth for 2014 through 2015 will help explain consumer preferences. Don’t worry, I’ve done the math nationally. So let’s take a look.
In 2014, four out of the top 10 categories—namely fresh meat, fresh vegetables, fresh fruit and salty snacks— showed an increase in dollar sales greater than 5% (well above the industry average of 2% for 2014). Not surprisingly, these same four categories also posted dollar growth well above the industry average of 3% growth for 2015 (see chart below).
Growth of the top three fresh categories—fresh meat, veggies and fruit—reveals not only the importance of fresh food, but also a desire for convenience and to eat better. Today’s consumers want natural and minimally processed foods with ingredients that help fight disease and promote health.
Not only are Canadians eating better, they’re willing to pay more for healthy food. In fact, 56% are willing to spend more for products made from fresh fruit and vegetables, such as juice, fruit bars and pre-made meals.
Although rising prices have aided in the race for dollars, two fresh categories—fresh meat and fruit—gained on unit sales, while vegetables remained flat. Let’s take a closer look at each of these.
Fresh meat: The meat segments (including beef, chicken, pork and turkey) posted dollar growth ranging from 3% to 8%. However, the devil is in the details, especially for beef. Beef dollar sales grew 6%. But that growth was driven by inflation. Over the past year, beef prices jumped 15%, resulting in an 8% drop in consumption.
Though Canadians are buying less beef, they’re still lining up at the meat counter, but for cheaper alternatives. Sausages, pork and chicken all saw kilogram growth of 4% to 10% in the last year. As we head into barbecue season, this information is important to know.
Vegetables: Prepackaged salads and mixed vegetables are a convenient and increasingly innovative category. Both are growth drivers in the health category, increasing dollar sales 20% and 9%, respectively, in 2015, while also gaining in volume. Consumers are willing to pay more for convenience, whether it’s precut vegetables or prepackaged salads.
Fruit: Growth of items such as mandarins and pre- cut mixed fruit, which fit the bill for convenient snacking, helped propel fruit into the top four. In 2015, mixed fruit increased dollar sales 28%, while mandarins were up 7%. That being said, fresh fruit is feeling an inflationary pinch due to the low loonie. If you’re looking for further opportunities in this category, take a cue from bagged salad’s popularity and offer cut and prewashed fruit.
Also keep in mind that interest in fresh can determine value-added services. As a retailer you can guide shoppers aspiring to healthy lifestyles, by offering better eating ideas, good-for-you foods and assisting with meal planning. Just a few healthy ideas—for customers and your store.