A major profit centre and a main attraction for consumers, fresh produce is viewed as an important (if not the most important) department in a grocery store. However, pressure on the category is rising and growth is losing momentum, which means the fruit and vegetable section is ripe for a refresh.
According to The Power of Produce 2020 report by The Food Industry Association (FMI), supermarkets remain a produce stronghold, but they are experiencing increased competition from other channels. These channels include specialty/organic stores, as well as alternative channels such as farmers markets and subscription services—a draw for younger consumers in particular.
On the sales-growth front, the produce department has gone from outpacing the store to being flat, says Jonna Parker, principal, Fresh Center of Excellence at IRI, a Chicago-based big data, analytics and insights firm. Back in 2014 and 2015, the dollar sales growth rate for produce was in the 3% to 5% range nationally in the United States, but at the end of 2019, the growth rate was only 1.4%. While produce is still a powerhouse, “it’s certainly under- performing relative to what it could be,” says Parker.
In Canada, it seems consumer consumption of fruit and veggies could use a boost. According to a University of British Columbia study released in 2019, Canadians’ consumption of fruit and vegetables dropped 13% in 11 years. In 2015, Canadians reported consuming an average of 4.6 servings of total fruit and vegetables daily, down from 5.2 servings per day back in 2004.
To stay on top, grocers need to constantly reimagine their produce departments, says Rick Stein, vice-president of fresh at FMI. “Produce is the visual star to most stores, and consumers say they will go out of their way to shop at a store with a reputable produce department,” says Stein. “Also, produce consistently remains one of the primary reasons consumers shop where they shop, so when retailers continually ‘freshen-up’ their produce departments, [they’re doing so] in their most critical department.”
Here’s a look at how grocers are adding more oomph to the produce department:
Putting the ‘market’ in supermarket
Walmart is taking a page from old-school fruit-and-vegetable markets with a redesigned produce department it’s currently rolling out. The retailer describes the key features as an “open market feel” and more space for shopping, with low-profile displays and wider aisles. In a blog post, Charles Redfield, executive vice-president of Walmart U.S. Food, said the new bins allow customers to see everything available in the department right when they walk into the store. “We’re using colourful, abundantly filled displays to highlight freshness and the quality of our items—for example, large bins of ripe red tomatoes and sizeable displays of seasonal items like squash and pumpkins,” he explained.
B.C.-based Fresh St. Market, which first opened in 2013, was built on the market feel. Departments are made to look like the individual vendor shops seen in public markets and are categorized with their own names. For example, the produce section at Fresh St. Market’s new downtown Vancouver store is called “Welcome to our Garden in the City” and at the Whistler store, it’s named “Welcome to our Garden in the Mountains.”
To display produce, the retailer uses all-natural materials such as plywood bins made to represent orchard bins from farm stands. Fruits and veggies are also displayed in baskets and barrels for a more rustic, earthy feel. “This really lends to letting the produce feel more natural, and it brings warmth to the department,” says Aaron Usher, produce category manager at Georgia Main Food Group, which owns Fresh St. Market. There’s not a lot of signage either: Fresh St. Market wants to minimize clutter “and let the produce speak for itself,” adds Usher.
Another trend is grocers growing their own produce, adding an element of theatre as well as sustainability to stores. Kroger is partnering with Infarm, a German urban farming network to bring modular living-produce farms to 15 of its QFC stores in Washington State. The in-store farms, which use a hydroponic farming method, grow varieties of lettuce and herbs. The plants are stacked vertically in glass cases in a controlled environment, which is monitored by Infarm through a cloud-based platform. When mature, the living plants are sold to customers. (At press time, Empire Company also announced a partnership with Infarm to bring the in-store farming platform to select Sobeys, Safeway and Thirfty Foods stores in seven Canadian cities.)
The Avril Supermarché Santé in Laval, Que. features a vertical farming platform that can grow a variety of organic micro-greens on site all year round. The greens are for sale at the store and used at the in-house restaurant.
And in Turin, Italy, French supermarket chain Auchan is trialling the installation of a 7-metre by 4-metre greenhouse in the produce section, with an external self-service counter. The fresh herbs, lettuce and micro-vegetables such as arugula and radish are grown by aeroponics: the roots are exposed and misted with a nutrient solution.
Letting (fruits and veggies) loose
Also on the sustainability front, grocers are trying to take the plastic out of the produce department. In the United Kingdom, Marks & Spencer is trialling a reduced-plastic produce department at its Tolworth store in southwest London. The retailer has launched more than 90 lines of loose fruit and vegetables completely free of plastic packaging. Most selections are merchandised loose in traditional pallets, while berries and soft fruits are available on compostable pulp containers. Paper produce bags are used in place of plastic ones, and reusable produce bags are available for heavier items like potatoes.
As part of the trial, the retailer has brought trained greengrocers to the shop floor to encourage customers to choose the loose produce, help them pick and weigh it, and give advice on how best to minimize food waste at home.
Fresh St. Market is also trying to take more plastic out of the produce department. The retailer is working proactively with suppliers and packers to develop more sustainable packaging materials. “This is very important to us and we are experiencing increasing buy-in from the suppliers we work with and positive feedback from the consumer,” says Usher.
Pairing up produce
Cross-merchandising isn’t new, but it’s becoming increasingly important to help busy consumers find meal solutions. Longo’s, known for its super-fresh seasonal produce, pairs up items from within the produce department and from other departments.
For example, fresh store-made mozzarella is paired with tomatoes and basil, cheese is displayed with grapes, and olive oil and balsamic vinegar are displayed near salad ingredients. “Most of our guests are time-starved, so our solution-based merchandising helps them take the thinking out of shopping,” says Mimmo Franzone, director, produce and floral at Longo’s, which has 35 locations in and around the Toronto area.
With new food trends always on the horizon, it’s smart for retailers to think beyond individual departments. IRI’s Parker notes that a huge trend right now is people blending their meats with vegetables—for example, adding mushrooms to beef burgers—to boost the flavour and nutritional value (and cut back on meat consumption). “Is the produce department working with the meat department to promote those types of options?” she questions. “That is just one example of how we’ve got to think beyond our own department to get more produce in the basket.”
Feeling the squeeze
The juicing trend is taking off and grocers can quench consumers’ thirst—and squeeze more sales—by having juice and smoothie bars in or near the produce section.
Andrew McFarlane, founder of Los Angeles-based juice bar consultancy Start A Juice Bar, says there are a couple of key ways in-store juice bars are appealing to consumers. “In grocery stores, because there is such a small distance between where the produce arrives and where it travels to be juiced, it creates the experience of a deeper level of freshness,” says McFarlane. There’s also the experiential element. “People love to witness how juice is made,” he says. “Just from an entertainment standpoint, they love to see something go from being a whole fruit or vegetable to a creative concoction that they can drink immediately.”
For retailers, one big benefit is they can reduce spoilage by using up fruit and veggies that are close to their expiration date. “It gives them another avenue to leverage inventory that they already have,” explains McFarlane. Beyond that, there’s brand strength. “If they want to be viewed as a quality and health specialist, the more specialty products they offer, the more they can position themselves against competitors.”
While consumers are becoming more educated about new-to-them fruits and vegetables, there’s always going to be some who don’t know a jicama from a jackfruit. Education in the department is critical, as employees can help expand shoppers’ fruit and vegetable vocabulary, and teach them how to prepare certain produce items.
“Your produce staff are probably the most important part of your produce section,” says Ron Lemaire, president of the Canadian Produce Marketing Association (CPMA). “We encourage produce staff to be educated and engaged, and even when they’re done [stocking] the department, to be present and available to answer customers’ questions.”
Product sampling, dietitians and information at point-of-sale all round out the in-store education piece. “Whether it’s talking about plant-based foods or showcasing a new product, really customize that message and drive it home,” says Lemaire. “You don’t have to make the produce department look like a yard sale, but you do need appropriate signage to educate the customer.”