A Hot Sales Opportunity?

Marketing your produce to alternative retail channels

Because we live in a fast-paced society where convenience equals value, this presents a sales opportunity worth exploring. Thousands of convenience stores, filling stations, discounters, and drugstores across the nation are challenging traditional grocery stores by stocking not only more grab-and-go or value-added products but an increasing selection of fresh fruit and vegetables.

What’s more, many of these stores are located in much-publicized ‘food deserts,’ and, as such, hope to fill the fresh food gap. Even big box retailers, like Walmart and Target, which carry fresh produce in their supercenters, are opening small-format or ‘express’ stores to compete with the convenience of quick marts in cities and urban areas.

Nontraditional Venues
Traditional grocery stores capture about 68 percent of fresh produce dollars, according to Chicago-based Nielsen Perishables Group. This means nearly a third of consumers’ fresh produce dollars are spent elsewhere, in nontraditional channels including warehouse or club stores, convenience stores, drugstores, dollar stores, and other discounters. Compared with more than 33,000 traditional supermarkets in the United States, the sheer number of alternative retail outlets, excluding clubs and warehouses, seems staggering.

Case in point: there are more than 150,000 convenience stores nationwide according the National Association of Convenience Stores (NACS), catering to 160 million customers per day or an average of 1,100 per store, per day. In addition, there’s the increasingly popular dollar store category, with more than 25,000 outlets in the United States, as well as 41,000 drugstores nationwide. The number of drugstores stocking food, with many including a selection of fresh produce, has risen 21 percent from 2007 to 2014 according to Nielsen.

Charlotte Cutler, who handles retail development for the Race-West family of companies in Clarks Summit, PA, sees nontraditional outlets as a prime market for fresh produce. “There’s so much more out there; people are focusing on health, super foods, and grab-and-go items,” she says, noting that mobile apps, home delivery, and juicing are all on the rise. While it took some convincing, Cutler says

Race-West Company began selling to nontraditional retailers about a year ago, and these sales now represent about 5 percent of the family’s business.

Jeff Lenard, vice president of strategic industry initiatives for NACS observes, “Five years ago, it was not very common to see produce in convenience stores—now it’s uncommon not to see it.”

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