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How high inflation is affecting fresh produce promotions

Pamela talks with Anne-Marie Roerink of 210 Analytics about some of the most widespread food inflation numbers she’s ever seen, and how that challenges consumers with budgets, and retailers with promotions.

How can we encourage fresh produce purchases without deep discounts? And Anne-Marie previews an all new study to be presented at the Southeast Produce Council’s Southern Innovations in Savannah.

Read the video transcript: 

PWR: Hey, this is Pamela Riemenschneider. I’m the Retail Editor for Blue Book services. And I have Anne-Marie here from 210 Analytics and we’ve got a lot to talk about. I feel like we just haven’t caught up in a while. And you just sent me some numbers this morning, where I was like we got we got to talk about this. Inflation in fresh produce is up. And it’s up a lot. What’s going on with inflation?

AMR: Yeah, well, you know, I in a way wish it was just produce. But the screenshot that I sent you is a shot of departments across the store anything from center store, frozen, produce, meat. And the way this particular software looks at it is anything that is inflation is red, and the higher the inflation, the darker the red. And so the screen I pulled up with the departments across the store is just solid red, and then has been solid red ever since I believe it started in late May or June, that particular screen week by week, and every single week, you just see nothing but red. And that’s just not something that I ever recall looking at. I mean, typically what we’re seeing is, let’s just say there’s some inflation in fruit, then we see people move to let’s say, frozen or canned or a different type of fruit that might have some lower inflation numbers. But right now, there’s really no relief across the store. And we’re really seeing it in protein where you see the same substitution patterns happening. And so I think it’s just really important for us to be cognizant of that. And at the same time, we see fewer promotions. So we see people really being hit from both sides, right at a time where we’re always focused on how can we get people engaged with fresh fruits and vegetables more. And I think we have to be cognizant of the fact that these price points have opened people’s eyes, and they are very aware of the inflation that is happening across the store.

PWR: Yeah, I really, for me, as a middle class American I don’t tend to look too much at…I just buy fruits and vegetables. And I think it’s just because I’m a produce person, and I buy what I want. I have not seen any Serious food, SILLY PRICES kind of strategy anymore. And coincidentally, that’s what used to be Sprouts, their former retailer that Sunflower Farmers Market, that was their tagline. And Sprouts dropped that strategy over the last couple of months and is going to more of a premium branding position and other retailers that I’m seeing I’m just not seeing the low prices in the promotions that we are used to I haven’t seen super low dog dirty grapes, the last this summer, and I’m seeing basically sticking around $1.99 a pound which I’ve never seen before I usually see him sometime during the summer under $1 amount.

AMR: Yeah, I would agree. And you know, it’s there’s a few exceptions, avocados are still in somewhat deflationary conditions. But for the most part, inflation is really hitting hard. Fruit inflation is coming down a little bit. It was extremely high, almost double digits over a year ago in June. And it came down a little bit. But certainly the awareness among consumers is there. And I think a lot of retailers are even struggling with what are you going to put on the front page these days to your point? Typically, in the summer, you see there was 99 cents strawberries or chicken or meat, whatever is on sale. And right now, you know, they’re even afraid to put some of the items on the front page because of the price perception that people will start to have. And it’s something we’re all struggling with.

PWR: Yeah, and you mentioned where we’re talking about, if we’re if not price, how are we going to entice consumers to, promotions, what are we going to do and how are we going to increase fruit and vegetables? the age old question is how do we get people to eat more fruits and vegetables? And I’ve been thinking about this a lot, and I’ve been thinking that I might…I know it. it I’m a food snob. I’m the one percenter in the kitchen. And I think a lot of us in the produce industry or in the food industry in general. need to get out there without our blinders on and take a look at what consumers are the pain points that we’re seeing with consumers and right now Honestly, I think no promotion no marketing strategy is too simplistic. We need to talk about how easy things are and not from a condescending. Oh, it’s so easy to peel an apple. We need to talk about, you know, dinner does not have to be a complicated recipe. Dinner can be a rotisserie chicken, a bag of salad and a clamshell strawberries. The end. If I don’t need to see everyone put all these ingredients together, I need to see three things that I can eat and feel not guilty about eating.

AMR: Yeah, I would agree. I mean, half the time you see these recipes and you look at them and it requires 15 ingredients 10 of which I don’t have five of which are you know, $6.99 you know very specialty ingredients that I’ll probably never use again. So I think simplicity is key that is one of them. People are extremely bored with their go to meals as well. So we see huge surfing around on all things websites, YouTube, TikTok is a big one these days Pinterest, Instagram, and, and again, I think in a way, you’re absolutely right. If you look at an Instagram, it really glamorizes in a way, you know, the meals and food, you know, one is fancier than the next. But that’s not how an average American cooks, and we don’t have the time or the tools for that. And it’s okay to say you know why these three, three simple ingredients make a meal. And in talking to retailers, you know, everybody is struggling with labor right now, which means departments are really focused in their own silos meet and meet, produce and produce. And yet the retailers that do those little bunkers in the front of the store that bring items together the salad, chicken and some kind of hidden inside, they’re calling them cash cows, I mean, they are working extremely well, because people don’t have to make a lot of effort. And it’s a meal, that’s a little bit different from what they normally put on the table. So there’s a, we’ve got to figure out how to move past some of the operational issues that we’re having right now and really thinking about it from the eyes of the consumer.

PWR: Yeah, and I think that that is really important to underscore this as we’re looking at the numbers, because Greg and I just talked about some alarming news coming out of food service, and you’re looking at the numbers of meals prepared at home. And we’ve saw a steep drop in July. And I really don’t think we’re going to see that drop continue. I think people are pulling back from foodservice a little bit what or they’re pulling out events in, in person dining, but are they going to pull back out of food service or, you know, where’s the opportunity here, and for me, the opportunity is in guilt free food –food that you can eat, that you feel good about that, you know, instead of going to the burger place, you go to the salad place, because the salad place is easy, but also delicious. And I’m seeing huge amounts of money put into venture capital in things like ready to eat meals, direct to consumers, they’re going to bypass the retailer, and make it reduce this pain point for consumers. And I just think that there’s a tremendous opportunity for fresh in there, too. And all departments are fresh to talk about–the three simple things you can do, or the two simple things you can do to put me food on the table for dinner tonight that you feel good about that? That is going to Yeah, I mean, that’s not fried chicken.

AMR: I agree. And in a way, right when the crock pot was huge, it was all about the convenience of it. All you do is put everything in there and it will make the meal for you. Well, how can we take that very simple principle of a good meal doesn’t need to take a lot of effort and move that forward. And you’re absolutely right in foodservice, I would agree that July was probably the highest on-premise engagement we’re going to see for a while now restaurants have gotten extremely good at takeout and delivery. They’ve invested big time in technology. So the question is, is that on-premise dining going to transfer more into takeout or delivery orders? Again, it’s hard to say because people are just done with cooking at this point in time. So I would agree that the two big overriding themes are convenience, and not just convenience and cooking. But in thinking of what you’re going to have in getting it into the house in the preparation in the cleanup. It’s really convenience from A to Z. And then health as well. You know all the startups in the space that you’re talking about the meal kits and delivery directly from the farm, all those different they’re all really focused on bringing product into the home because the well known concept is if you have a stocked fridge, more than likely you will cook and that is something that we need to focus on a whole lot more.

PWR: I think it also reminded me of the growth in in frozen and I had just sent you a photo from Randalls here in Leander Texas have the frozen case of they’ve got a TV above the frozen case and all of these different meals and there’s someone’s clacking at you, as you walk by to talk about how delicious their stuff is what innovative recipes these are. This is not like hungry jack frozen meals sitting in front of you, that’s 2000 calories. And you know, not the best choice, let’s just put it that way. These are high end culinary dishes coming out of the freezer case. So if fresh and prepare foods doesn’t jump on this, if retailers don’t jump on this frozen, got it, and people are gonna figure it out.

AMR: Yeah, I would agree. I mean, we see millennials who we want in the fresh produce department, they love frozen foods. And they’re very much giving credit to the nutrition to the house to the innovation, frozen become really good about just plant forward and freshness. And you know, we put it in the freezer, the same day of is harvested those types of things that we don’t talk about in the store at all in fresh produce. But, they’re definitely up in their marketing in their innovation game.

PWR: Speaking of innovations, we’ve got Southern Innovations coming up in a couple of weeks, and you are just putting on the finishing touches, to some new research that you put together. And it’s funny you mentioned TikTok earlier, but that’s one little part talking about all the different influences for consumers and the innovations that we’re seeing and marketing in fresh produce. What’s a little sneak peek that we can expect coming out of Southern Innovations?

AMR: So we initially wanted to document all the innovation and technology that is happening from the farm to the menu, then we realized that that would probably require people to sit there for a month.So we came to the realization that ultimately we all have the same boss and that is the consumer and the consumer makes or breaks new technology and new innovations by accepting it or rejecting it. So we actually created a big consumer survey about literally anything from: Do you buy farm direct and what do you prefer hydroponic or outdoor growing and why to produce and self checkouts to what do you want on the label and the kind of innovation—we asked about so it’s going to be something very new and different and very excited about it.

PWR: All right, well, I will look forward to digging through some details with you But until then, let’s go try to find some TikTok advice that is not mustard on watermelons.

Pamela Riemenschneider is the Retail Editor for Blue Book Services.