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Is the freezer case a threat to the fresh produce department?

Pamela talks with Anne-Marie Roerink of 210 Analytics about what the latest IRI sales numbers tell us about how consumers are shopping during the COVID-19 pandemic.

Fresh produce is still ahead year-over-year, but by just 3%, with fruit down 0.5% while frozen and canned continue their hot streak. Does this present a long-term threat to the produce department as more shopping shifts online?

Consumers also have changed when they shop, though this trend is likely temporary as more states gradually shift back to work over the next few weeks and months.

Video Transcript:

00:26 – Pamela

Hey, this is Pamela Riemenschneider, Retail Editor for Blue Book Services. And Anne-Marie and I are going to talk about sales numbers. Anne-Marie produces a report using IRI data for the Produce Marketing Association. And the most recent week, week ending April 19, I believe, right. Yeah. We saw the what we have seen coming is that fruit did not exceed year over year sales for the first time since the COVID-19 pandemic shopping, vegetables are still doing well. What are some few key insights that we saw out of this week’s report?

01:03 – Anne-Marie

Well, I think the main thing to mention right up front is the fact that this was the week where we went against Easter 2019. So that’s typically a big bump in both vegetables and fruit. So that’s a hard bump to go up against and to try and exceed that. So that’s an important kind of backdrop to these numbers. But overall fresh produce was up about 3% a little bit more vegetables again outperformed fruit very easily and fruit to your point was actually down about half a percentage point. So you know, that’s, that’s something that to your point we had been talking about we saw that line kind of softening and trying to figure out how we can generate that demand in part it is a demand that is shifting to other parts of the store and part of it is shoppers wanting to reduce the number of trips that has a big impact on it. Shoppers are not as inclined to to maybe interact with in store displays because they’re rushing through their trip. So really figuring out ways to create impulse in this very new retail environment is very necessary in order to keep boosting that fruit demand.

02:16 – Pamela

When we talk, you know, I’m specifically here for fresh produce, but you do a lot of other research for other categories in the store, one of them being frozen. And we’ve talked before even last year about how frozen was becoming more popular. And since the COVID-19 crisis, we’re seeing frozen take bigger bites out of consumer demand, you have a new study coming out about consumer perceptions, amid all of this pandemic shopping. What kind of threat really is frozen for fresh?

02:47 – Anne-Marie

Well, at the end of the day, frozen produce is of course, a blip on the radar compared to (fresh), but compared to just a whole fresh and hands and sell stable, so it’s … we have to keep in mind that when we see these giant growth rates for frozen is also based on a smaller piece of the pie. But absolutely, when you’re looking at 2019, about 85% of total produce sales was generated by fresh and during the height of pandemic when people were just buying anything they could, but also were very much in the stock up mindset. We saw that share fresh drop all the way down to about 70% with a huge impact for frozen and as well as shelf stable. But what’s interesting is that we continue to see that impact. So at the height of the pandemic weeks, so March 15, and 22nd. In terms of purchasing frozen vegetables were up triple digits, frozen fruit, triple digits, but they continue to hold so while we’re looking for fresh produce at about a 3% increase, again, bigger pie, but frozen foods overall are still up 40% of the year prior and so the Frozen Food Association and myself looked into that 70% of people said they are buying more frozen food. And some of the reasons behind that I think are big red flags for the fresh industry altogether, not just produce, but really fresh items altogether. Some of those were indeed wanting to have a little bit of stock up, in case there were food shortages. But it was also the idea of food safety 15% said I’m not buying fresh produce right now, because I think frozen is safer. There were others who were saying, well, it’s just I’m trying to minimize the trip to the store. So I buy frozen. So a lot of the reasons that were mentioned and that research is available, if you’re interested, happy to share it, but all those reasons are kind of, you know, scary for the fresh food department because if 4 million more people have tried one of the major frozen food, vegetables for instance, You know, are they liking are they loving the convenience the freshness that really frozen has been touting as well. And that might result in this shorter term behavior becoming a longer term behavior. So there’s definitely some very interesting dynamics happening between frozen and fresh in particular

05:20 Pamela

And we’ve seen it over the last couple of years on the frozen technology the quick individually quick frozen fruits and vegetables. The quality of them has gone up over the last couple of years. And so it it already was on a growth pattern so to see that people are naming that they feel like frozen is safer than fresh right now is you know, concerning although it like you said, the numbers are huge, but that’s because their share of the pie was smaller. Yeah. So that there’s some threat there. There’s something to watch and especially in the fruit category. I really am concerned that we need to find a way to help inspire consumers to buy more fresh fruit.

06:04 Anne-Marie

Well, I think to one of the other areas we’re seeing enormous growth in is online. Well, traditionally, when people start buying online, they don’t really interact with fresh the same way than they do with center school there. There are some concerns there. And some people say, I prefer to pick out my fresh veggies and fruits myself. So now all of a sudden we see an older demographic jump into online shopping. We had 28% of those who started shopping during the month of March online were first time shoppers and many of them are 65 years and older. So are they going to interact with fruit and vegetables online? And how do you translate that trust that people have in the produce department into an online purchase and as a brand, how do you become that first click and if you weren’t the first click and you aren’t in people’s favorite list, how do you become a favorite or how do you get on that list? And how do we prompt impulse purchases among these online shoppers? So there’s many, I think areas that are happening in this completely new retail environment that make it tough to translate the old retail wisdoms into this new reality

07:21  Pamela

We had one more topic I wanted to discuss with you really quick. We’ve been talking about consumers trying to avoid crowds at the store, trying to pick the right day to go shopping. And you’ve got some numbers that show the day of shopping. It used to be weekend day, Saturday, Sunday, were the biggest days to go shopping. And now consumers maybe are shifting some of those patterns. What are you seeing now?

07:45 – Anne-Marie

Yeah, so one retailer actually said to me every day a Saturday these days, we cannot keep track of the hours. And in part if we think about as many retailers have really condensed hours that they’re open, so that already condenses the traffic to a certain number of hours, then some has specific hours set aside for first responders. But the old patterns of the first week of the month is really big that is still sort of holding up. But in terms of the Saturday and Sunday, they have lost a lot of dollars, if you will. During a typical week in the past, it used to be about 35% of all dollars sold during the week or generated on that Saturday or Sunday, during the height of pandemic that was only about 20%. So we’re coming back up. And I think as some people are starting to go back to work and some restaurants come back online. Maybe some of those patterns will start to normalize a little bit, but certainly we’re seeing people engaged with grocery stores all throughout the week. We do see trips coming down. Now we’re about tracking and to normal levels. But it is any hour of the day. It’s any day of the week and that really has huge ramifications for restocking for the whole supply chain of getting supply out all throughout the week versus, you know, a really big push for the weekend.

09:06 Pamela

Well I know of course, even just in my own shopping my basket size is…ridiculous.  Nowadays, I don’t think I’ve ever spent, you know, $250 at the grocery store and in the last three weeks, I’ve done it every time I’ve gone to the store. So a lot of shopping patterns from changing and we’ll see how permanent or how temporary they are over the next few weeks.

09:29 Anne-Marie

Absolutely, it will be good to see. I think next week is going to be a very important week free of Easter and we’ll have to see what next week brings.

09:38 Pamela

All right. Well, we’ll take a look at it and thanks Anne-Marie for your time.

Thanks Pamela.


Pamela Riemenschneider is the Retail Editor for Blue Book Services.