Wholesale clubs sell an incredible amount of fresh fruits and vegetables.
“Our research shows that 26 percent of shoppers indicated they’re buying more bulk-pack items to help cope with food price inflation,” says Brian Numainville, principal at The Feedback Group in Lake Success, NY. “For larger families buying in bulk or larger quantities, and for those who are willing to shop a limited variety but get more for their money, club stores often work well.”
“Bulk-packaged fresh fruits and vegetables—particularly staple items like apples, berries, oranges, bananas, potatoes, and onions—see strong sales demand in this retail environment,” reports Derek Lenko, sales manager at grower-shipper and importer David Oppenheimer & Associates GP (Oppy) BB #:116424, based in Vancouver, BC.
“Additionally, prepackaged and value-added products such as precut fruits and vegetables, salad kits, and convenience-oriented offerings cater to the bulk-buying mentality of wholesale club shoppers,” he adds.
Specialty varieties can work in the wholesale club environment as well.
Robert Schueller, director of public relations at receiver and shipper Melissa’s/World Variety Produce, Inc. BB #:111686 in Los Angeles, CA, says the company sells “a good handful of products” to warehouse clubs, particularly value-added items.
Examples include steamed baby red beets, steamed lentils, and conventional and organic ginger and turmeric. Schueller expects categories such as root vegetables and organic products in general to grow in 2024.
Yet wholesale clubs are known for their often unique demands, points out Lenko. “Vendors are often required to supply produce in bulk quantities, with packaging designed to facilitate efficient handling and storage. Pricing competitiveness is a key consideration, as wholesale clubs aim to offer value to their customers in specific larger-sized, pack-style formats.”
“A typical store carries one-pound units of ginger and turmeric, but club stores offer three-pound units instead,” shares Schueller. “They also don’t like to sell bulk using PLUs but want to use UPCs for easy scan-through at checkout.”
Needs vary somewhat from store to store, Schueller says. For example, stores in more upscale areas are more likely to offer organic versus conventional products. He adds that clubs are looking for year-round availability and good shelf life compared to the average for categories such as berries and herbs.
Lenko points out that quality remains important. “Vendors must be able to provide consistent, high-quality products and new varieties from around the world to meet the rigorous standards set by wholesale clubs.
“Moreover, flexibility in adapting to seasonal demands, participating in promotional events, and complying with the private label requirements of clubs may be essential for a successful partnership. Efficient distribution and logistics to meet the required delivery schedules for fresh produce specs are crucial, reflecting the focus on streamlined supply chain operations characteristic of wholesale club retail models.”
Phil Lempert, the Supermarket Guru of Santa Monica, CA, thinks wholesale clubs are missing an opportunity to make more of the produce category.
“In most, if not all of the wholesale clubs I’ve been in, the produce departments have been underwhelming.” He says many consumers go to these stores for meat, so putting produce alongside proteins will add to impulse sales.
“It would be natural to have robust produce departments, but the category is not conducive to the larger sizes.” Lempert recommends clubs not focus on larger-sized produce packages, but on merchandising.
“The wholesale clubs’ DNA is selling larger sizes at a reduced price, they’re not merchandisers. But the produce department is the showplace in conventional grocery retail—it sets the stage for the rest of the shopping experience. Why not do that in warehouse clubs? Right now it’s just, ‘If you want it, here it is.’”
This is an excerpt from the feature story from the March/April 2024 issue of Produce Blueprints Magazine. Click here to read the whole issue.
