Anne-Marie Roerink and I are back to talk about consumer trends amid the COVID-19 crisis. This week we have the latest sales numbers, and how July 4 was surprisingly strong, despite the single-digit growth.
We also talked about why and how retailers, and the produce industry at large, needs to be driving consumer demand outside of the four walls of the grocery store.
Read the full transcript here:
Pamela R.: We are talking COVID-19 consumer trends as we see it in retail produce sales. So the latest numbers that we have from IRI are for the week of July 4, and Anne-Marie we’ve talked about holidays and the impact of holidays on produce sales, what did we see with July 4? And, you know, how can we, overlay with that with information for what we can see for the rest of the summer?
Anne-Marie Roerink: So I think me and everybody else was expecting Independence Day to be extremely big, because to your point, all the 2020 pandemic affected holidays had been extremely big, and I’m talking 20, 30% over normal. So when the numbers came in, and I saw that produce was about 9% over that same week, year ago, initially, I had a bit of disappointment, I will tell you, especially also looking at the numbers for frozen meat and many other departments and pros was one of the lower ones. But then I started looking at Okay, well what did it do versus the prior week. So now actually looking at the improved there, and we were 14% over the week before. So I think what we have to keep in mind is that Independence Day, every year is just a giant holiday. And so we’re not going up against the same baseline every week, we’re already going up against the baseline that is much, much higher, and to be 9% over that is actually quite an accomplishment. Other than that same trend lines as we’ve been seeing good strength for vege it was up about 14%. Fruit did come back into the positive which was good only about 5%. But what I did like was the fact that a lot of the summer fruits did end up into positive this week. So melons came back, cherries came back. So that was good to see. And we also had volume growth on all areas. So that was a lot of pluses in this week’s column, I would say.
PR: And I’ve been tracking it. And finally, this was the week that oranges were under 50% year over year sales growth, not to say that oranges are actually slowing down because there’s 50% year over year growth is ridiculous for this time of year for oranges. So yeah, I think it really shows that some of those other summer fruits are getting a piece of the pie.
AR: Yeah. And you know, I remember one of our very, very first videos and we talked at what was selling during those crazy weeks of the pandemic and it was when you looked at it, initially we realize it was all the fruits and vegetables that have longer shelf life. Well, this week, I was looking at the numbers and I think actually that theory still holds because apples are doing better than they should this time of year oranges, grapefruits, lemons. Now in part, I think we you and I have talked about the fact that a lot of those are into consumer mind directly related to building the immune system. I absolutely think that’s part of it. But I do think that whole notion of shelf life still holds true today as well.
PR: And as we’re looking at what’s going on in a lot of the country, you’re in Florida, I’m in Texas. We’re both in pretty hot spots here when it comes to COVID cases. And we’ve heard it rumbling around here in Texas. We’ve got a mask order and we also have you know, we part of Austin has gone back into stage, whatever restrictions where they closed down bars again here, restaurants, maybe on the horizon. I’ve also seen rumblings in some of the Facebook groups I follow for consumers and frugal shopping and people are talking about stocking up again.
AR: Yeah, agreed. And that’s exactly what we saw happening to your point, Texas, Florida, California, that’s three very populous states and they absolutely have a big impact on that overall national number. So what happened here, same thing, restaurants had been fairly much open, I believe it’s 75% or close to it. And a lot of those reopening measures got reversed. And I can simply see the difference when driving around and just felt like traffic was lighter again, and restaurants seemed emptier again. And at the same time, grocery stores were busier again. So you asked what’s going to happen the next couple of weeks, I wish I had a crystal ball, but I’ll say we now have seven weeks of non-holiday demand. So it’s really that everyday demand has to boost our sales over the same week last year. We had been seeing erosion week to week by about one to two points. So we’re still sitting above the same week last year but a little bit less each and every week. I wouldn’t be surprised if that’s going to plateau if not reversed a little bit for the simple reason that consumers are increasingly concerned. And that is going to drive dollars back to retail like we have been seeing.
PR: And we also have-one month from now here in Texas, at least is that schools are supposed to start in person classes. And actually most of them have delayed that by three weeks around here. So we’re going to have virtual school so then parents are going to still be feeding their kids at home. There’s going to be a whole lot more meal occasions that stay at home that we were all expecting to start being eaten out of the home. So there’s some interesting things to look at over the next couple of weeks. And also it’s just, you know, to reinforce that we have to find a way to drive demand and keep demand steady for summer fruit especially driving those impulses outside of the four walls. Like you’ve mentioned before, and we mentioned this in ill-fated video that didn’t work out because of some sound issues, technical difficulties, I think in the age of Zoom, we’re all used to it by now. Maybe didn’t work this week. We’ll try it again next week, when we haven’t had a quick bite about driving demand outside of the store because people are going through the stores as fast as we can what kind of data supports that?
AR: Yeah. So every week I arrived as a consumer survey as well and some of the questions there are about are you do you have anxiety about going to the store Are you trying to cram as much into one trip and also the speed of running through the store and what you’re seeing is that people are not as focused right now on new items because they just want to go to the different points into the store to get their trip done as fast as possible. About half of shoppers are looking to finish that trip in 20 minutes or less. I don’t know about you I could never finished my minutes early. But apparently they run faster than I do. But point being shoppers are in the store on a mission. And that means that between clean aisle policies that we still have in order to keep people, six feet apart and people rushing through, we just don’t have the kind of impulse power, the sampling power, everything that really drives the fruit purchase, especially in the summer. If you think about the big bins of watermelons, I’m not seeing very many stores that have those right now, either outside or in the produce department to keep those aisles wide. And so what can we do to make sure that people are aware you have the best batch of cherries or melons or whatever it is, and you’ve had a nice year and I think it’s that person in your produce department that he’s always talking to the customer, staff person that we need to get on social media and really have those conversations that He would know he or she would normally have what the shopper in store but have it outside the four walls so that remove a lot of these summer fruits from being impulse purchases to becoming planned purchases before even coming to the store.
PR: I see this all the time I follow almost every retailer on social media and there is one guy in Bella Vista Arkansas called Allen’s Foods and they do the best produce promotions they had a truck outside in front of their store the other day, talking about how how many hours it was since this item was in the field so field to store if you’re doing direct store deliveries, that’s something too is to take a quick video on the truck shows up and show where your produce is coming from or even take a quick video showing sizing or explaining what a size for a grape means. And what you know, do you have two bite cherries? I know a lot of retailers were really trying to get into those 8-row cherries this year and so if you’ve got something Like that this year, then you need to be promoting it and driving demand and telling consumers, why you have what you have and why it’s better than what the other guy has.
AR: Right and I think consumption occasions also right we peaches, you can grill them for dessert or you can add them to your yogurt in the morning and there are so many different ways in which we can add some more fruits and any kind of fruit to meal locations that aren’t typically big produce occasions making smoothies etc. The whole idea of immune building I’d love to see retailer set up a whole end cap with immune building fruits and vegetables or just start to educate people that yes, there’s other things in oranges that have vitamin C, I think and then the meal planning you and I talked about that before. After four months of trying to feed our families. It’s getting old. Anybody can solve that dilemma is my hero.
PR: Yeah. Anyone who could solve that dilemma in any Some of the numbers tell us that people some people in the know already are buying more of some of these immunity builder items. The biggest example for me is watercress. Yeah. Nobody I know buys watercress on a whim. Right yet it is one of the most nutritious immunity building greens in the produce department and sales are gangbusters for watercress of all things. So clearly someone knows that and they’re getting that information from somewhere. But why am I not hearing that from my my local retailer it’s like hey, great, you know, oranges are great for your immunity but so is watercress, and so is X, Y or Z. There’s a lot of opportunity for promoting those immunity builders. I know that D’Arrigo Brothers for example, just did a big promotion with their broccoli rabe because it also has a lot of the nutrients in it as an immunity boost and I thought it was a fantastic promotion. I want to see more of that.
AR: Yeah, I want to see more of that and I want to see helping consumers get through the week because if they truly only want to shop one day a week, then a lot of the summer fruits fall off for them because summer fruits, soft fruits, they don’t last very long. But how can we help the consumer to say you know what, get your oranges and apples for the later part of the week because they will last you but get decent these items and kind of just help the consumer build a shopping list within fruits and veggies that allow them to make it until the next time they come to the store.
PR: It’s the same principle as the signage on two-stage bananas. Buy now, eat now buy for later for later. I mean, I’ve seen that we’ve seen that in retailers for four years now that’s nothing new. But now we need to find a way to translate that into other items because you can easily shop once every week once every two weeks and still have plenty of fresh produce on your plate.
AR: Agreed and also freezing you know are you able to take little container of blueberries and put them into freezer. If people were to know that, I think it’s the same exact conversations the dairy guys were having, you know, people don’t realize that you can freeze cheese or butter. And as such, they’re demanding longer shelf life. Well, they have the shelf life within the palm of your hand. He says don’t know it. So is that another opportunity for fresh produce to help people make it through the week?
PR: All right, well, we’ll keep an eye on it and check in next week and see how the next normal week looks as we’re seeing consumers start to be a little more uneasy about the state of restaurants and the state of going out, especially in the south. Thanks again, Anne-Marie