Sweet Onions’ Smell Of Success

Photo Courtesy of
Keystone

The arrival of spring signals the commencement of larger and more significant sweet onion promotions. Retailers can erect impressive displays with signage and point-of-sale materials to help increase sweet onion sales and expand the landscape of the category year-round.

Whether originating from Mexico, Texas, Georgia, Washington, Central America or Peru, growers produce and ship volumes year-round that require effective promotions. In recent years, sweet onion demand has steadily increased. To meet higher demand, many retailers merchandise sweet onions in bulk or loose jumbos, in consumer bags of mediums, as well as through end caps, stand-alone displays and through displays that cross-merchandise the vegetable with other vegetables, meats and other products in the stores.

In the United States, sweet onions are produced most of the year. In mid- to late March, Texas kicks-off mainland domestic production, which usually runs through mid-May. Georgia’s Vidalias typically begin in mid- to late April and via storage, ship through late August and into early September. In the Pacific Northwest, Washington’s Walla Walla sweet onions start harvesting in mid-June and ends by late August. Other production originates from Hawaii (mid-February through late fall), California (late spring through fall), New Mexico (in the summer), Colorado (late summer and fall) and Nevada (late August to the start of the year). Offshore production commences in early September in Peru and usually begins winding down in February, before Mexico’s harvesting starts in the middle of the month and ships through March. Chile, Ecuador and Guatemala also produce sweet onions.

According to Chicago-based Nielsen Fresh, sweet onions account for the second-largest share of total onion sales behind yellow onions. The average store sells $435 in sweet onions each week, and the category constitutes 27 percent of total onion sales. In terms of department volume, onions are second only to potatoes. The overall onion category represents 7.2 percent of retail vegetable sales. It is fourth in sales behind lettuce, tomatoes and potatoes, up 4.8 percent in 2016 compared to 2015, according to data from Gruszka Consulting, Bakersfield, CA.

“Retailers report the category is experiencing sales increases. This is despite the product always being an affinity to something else — never a snack item, a side dish or a destination item — which makes merchandising challenging. Conversely, onions are low-shrink compared to higher shrink items like berries and cut fruit, and represent a category offering high-margin sales,” says Scott Tyo, category business manager for vegetables for Tops Friendly Markets in Williamsville, NY.

Creative promoting through theme displays and ads helps increase sales. “We find when we pair them with something, it works well,” says Tyo. Examples include teaming the onions in chili displays with ground beef, and meal deals where shoppers receive a free sweet onion with a protein purchase. Merchandising sweet onions with green peppers provides consumers half the ingredients needed for stir fry meals.

Cross-Promotion Success

Sweet onions can be effectively cross-promoted in nearly any vegetable display. They can be paired with carrots, summer squash for grilling, with salad displays featuring salad dressings and croutons, and with potatoes, where customers buying potatoes can also receive a free bag of sweet onions versus only buy-one-get-one-free onions.

“Sweet onions are a great item to merchandise,” says Tyo. “They’re very flexible; they go with nearly anything. When looking to offer some heavy deep promotions on salads, you can add sweet onions to help drive margins up.”

Cross-merchandising is important as retailers need to help shoppers searching for meal ideas. Sweet onions can be placed nearly anywhere in the store, including next to cooking oils, cooking wines and flour mixes for those desiring to make deep fried onion petals. “The thing about sweet onions is, they transcend all different types of customers,” says Teri Miller, senior category manager at The Fresh Market, based in Greensboro, NC. “Not every customer is the same. You have to understand that and merchandise to their needs. That will be what drives you. You can’t drive the customer; they need to drive you.”

Regular promotions are necessary as shoppers can become oblivious to produce aisle products when merchandised in the same area all the time. Retailers should position sweet onions in end cap displays or in bowls near meat counters. During the summer, sweet onions are ideal in small outdoor displays, which prompt shoppers to purchase grilling items, says Miller. The product can also be merchandised with carrots, potatoes and salads.

According to Nielsen Fresh, baskets containing sweet onions are about 40 percent larger than those without. Shoppers who purchase sweet onions are more likely to purchase tomatoes, potatoes, peppers, mushrooms, squash and celery.

Shuman Produce Inc., Reidsville, GA, provides retailers large display units, as well as smaller secondary display units for promoting sweet onions outside the produce department during peak season and holidays. The smaller units work well in meat departments during grilling season and feature seasonal recipes and images of onions in the field. Shuman Produce also recommends placing sweet onions in the center of the produce department to highlight their versatility and importance. “By creating displays using bags, bins and boxes that complement each other and feature the product in bright, colorful imagery, retailers can draw shoppers’ eyes,” says John Shuman, president.

Variety Differences

Photo Courtesy of
Peri & Sons

Because they were developed with the same seeds and fertilizer practices, Peruvian onions are nearly identical in taste and appearance to Vidalias, says Delbert Bland, president of Bland Farms LLC, Glennville, GA. Those growing regions produce flat granex-style onions compared to the round, globe-shaped grano onions in Mexico, Texas and the West. As yields are becoming closer to the globes, Bland Farms is increasing its Mexican flat onion plantings.

“The different growing regions produce varying flavor profiles, with some tending to taste sweeter,” says Jarrod Snider, director of sales for Richter and Co. Inc., Charlotte, NC.

While imported sweet onions are not usually merchandised any differently from domestic, retailers don’t promote the offshore product as much as the U.S. season. With fewer outdoor grilling events, fall and winter demand is typically smaller than spring and summer. “Shelf space, therefore, is generally reduced compared to the Vidalia deal, which hits Memorial Day, Independence Day and Labor Day promotional windows,” says Snider.

While spring and summer see expansive promotions, the popularity of sweet onions is prompting suppliers and retailers to consider new ways to promote during fall and winter. The Vidalia identity retailers market disappears when the deal ends. According to Brian Stanley, sales manager of Generation Farms, Lake Park, GA, offshore sweets are typically generically merchandised as sweet onions. “Retailers should erect better displays during the off-season. During the fall and winter, we need to work on some things. Consumption would be down a bit during those periods, but we could improve during those times,” says Stanley. “We have to figure out how to get people excited about sweet onions during other times of the year, like during the Super Bowl.”

That can be done through display contests, circulars, newsletters and concentrating more on social media. During the winter, merchandisers can focus on signage and erecting large displays promoting sweet onions merchandised with soups and winter cooking recipes.

Many retailers aren’t paying close attention to the category, which requires coordination to achieve sales success. “The category has had a tremendous amount of attention in the past, but recently, it has gone on autopilot with some retailers,” says Matt Curry, president of Curry & Co., based in Brooks, OR. “With some attention, retailers could drive more volume.”

Curry blames personnel changes, which pushed the category to the back burner as personnel became re-educated about other commodities thrown at them. “It’s more a people issue than a product issue,” he says. “There are other commodities that steal time from people who are new. In general, there is plenty of product. You have to choose to promote them or not. The only way you can drive lift is through ads.”

As sweet onions represent a premium product, merchandisers should market them as such in displays larger than regular onion displays. “Merchandising through appropriate displays and during optimal promotional periods could help increase movement,” says Curry. “It’s not some crazy science we’re trying to accomplish. As the highest margin at retail is in the sweets, how you get eyeballs is by grabbing attention. The way to do that is through displays. If you compartmentalize them between the whites and reds, one’s eyes will go over versus toward them.”

Because sweet onions aren’t a sexy commodity and are available throughout the year, retailers don’t see big influxes of shoppers seeking them. “The loss of seasonality could have caused a slight sales decline, which made for easy ignoring,” says Derrell Kelso Jr., president of Onions Etc., a division of Farmington Fresh Sales, in Stockton, CA. “You have to always be investing in it and working on them. You can’t just put them on the shelves.”

As sweet onions are no longer an “event,” suppliers and merchandisers must work to find eating events, including Passover and Fourth of July, to couple onions in ads with other items, including herbs like tarragon. Another non-sexy item that rarely sees large ads, herbs partner well with onions and add spice, making food taste better. Retailers like to tell shoppers how to use herbs, which easily spoil and are quickly discarded. By teaming them with sweet onions, a retailer could see improved sales. Merchandisers should promote sweet onions at least once per quarter. Ads and displays should shower attention on flavor.

Keeping It Fresh

Cross-merchandising can help retailers keep the category fresh. End cap displays send messages, but end caps displaying sweet onions with sweet corn and other seasonal summer produce items send larger messages that shoppers can do more with sweet onions than conventional onion usage. “You can drive extra value by planting ideas in consumers’ minds about usage ideas,” says Ralph Schwartz, vice president of marketing, sales and innovation for Potandon Produce LLC, headquartered in Idaho Falls, ID. “Placing sweet onions near grocery products, including sauces and processed sweet onion items, helps expand consumers’ understanding of sweet onions.”

One way Richter attempts to keep the category fresh is through providing new types of stock-keeping units, including sweet Georgia red onions, as well as packaging alternatives to the traditional ways onions are marketed through bags and bulk. “Generating interest is important,” says Snider. “The last thing you want is category stagnation. It’s easy to do on items traditionally sold as bulk, like cabbage. Cross-promoting helps keep them fresh.”

Snider encourages retailers to use graphics and point-of-sale materials to create excitement and help educate shoppers. “Retailers need to make sure they’re promoting aggressively during those key windows,” he says. “The month of May is huge. They need to be building large displays, which is the most important. Having enough promotional space is critical to getting the message out. They need to take advantage of point-of-sale material to market the graphic bins full of consumer bags.”

Springtime Sensation

Photo Courtesy of Bland Farms LLC

Because Vidalia onions have become a well-known brand, the start of the season has become a springtime event in the produce department. To announce the season’s start, retailers erect large displays of high-graphic bins and secondary displays. The commencement of Georgia sweet onions not only drives Vidalia sales, but also increases sweet onion category sales, according to Susan Waters, executive director of the Vidalia Onion Committee (VOC), based in Vidalia, GA.

The VOC recommends retailers cross-promote Vidalias with related items, including tomatoes, packaged salads, cucumbers and avocados. The committee provides retailers a variety of recipes to feature in displays or online. Retailers recognize the appeal of sweet onions and build merchandising displays that include key varieties, bulk and packaged onions. To provide shoppers choices, the VOC advises retailers to merchandise sweet onions in bulk and in 2-, 3- and 5-pound bags in the same section. It recommends retailers place Vidalias in secondary displays in other areas of the store to cross-promote the onions with burgers, buns and related grilling accessories.

“Our research shows there is tremendous power in the brand. They appeal to a broad cross-section of consumer demographics, with 91 percent of consumers familiar with Vidalia onions,” says Waters. “During the Vidalia season, Vidalias account for 62 percent of sweet onion sales, 22 percent of total onion dollars sales and outpace the growth of sweet and other onion varieties.”

More than merely posting signs, retail produce department managers should ensure signage is accurate. Kim Reddin, director of public and industry relations for the National Onion Association (NOA), Greeley, CO, says she once saw signs marketing storage onions as Walla Walla onions in December, long after the Washington season had ended. “Sometimes, things are on auto pilot in the stores. A lot of sweet onions are sought after by name. It’s easy to be complacent when it’s important not to be. Though it’s not as apparent with some items as others, onions need that extra effort. If you’re calling out a specific location and it changes, make sure the signs are also changing and are in sync so consumers can follow.”

Retailers should use effective point-of-purchase materials and signage to showcase the product’s flavor and nutritional benefits, which represent an easy sell to shoppers looking to prepare tasteful food absent of salt and cholesterol. Proper merchandising includes large and attractive displays promoting the product with usage tips, recipes and nutrition details in the display and on the packaging. “This helps retailers increase sales,” says Marty Kamer, president of Keystone Fruit Marketing in Greencastle, PA, and a division of Progressive Produce LLC, in Los Angeles. “Sweet onion usage is very diverse and cross-merchandising opportunities are limitless,” he says. “Many retailers strive to take advantage of cross-merchandising by strategically placing onions and products that can be utilized with sweet onions. ”

Sweet onions can be promoted with products in and out of the department, including steaks, burgers and kabobs. They are also ideal as an ingredient in fresh fruit baskets.

The key to merchandising sweet onions is distinguishing them from other storage onions. “Retail produce people are busy, but it’s really important for sweet onions to be called-out,” says Teri Gibson, director of marketing and customer relations for grower-shipper Peri & Sons Farms Inc., in Yerington, NV. “It’s critical to create a clear distinction between them and the yellow and Spanish onions. Proper signage and high-graphic packaging also help separate sweets. Retailers should state the onions are sweet onions and that shoppers will experience a mild flavor.”

Merchandising to Millenials

Many Millennials aren’t familiar with onions. Sweet potatoes and sweet onions make a strong combination for Millennial shoppers because both are healthy foods. Sweet onions can be effectively merchandised in the meat department and soup aisle. Many retailers will feature them in the front of the store or in other high-traffic areas to let shoppers know the Vidalias are available.

“There are all kinds of different areas you can place them depending on the time of the year,” says Bland Farms’ Bland. This spring, Bland Farms plans to offer $1 off coupons for Vidalia onion bags when shoppers purchase its processed Vidalia chips and petals. In the fall, Bland Farms plans to provide bar codes for bins merchandising sweet onions and sweet potatoes. After shoppers scan the codes, they will be taken to a website providing recipes to show them how to prepare the two products.

Shoppers can scan quick-response codes Peri & Sons affixes to its bags and learn more about the product. “If there’s any group that does its research and looks-up things, it’s the Millennials. They want to know more about sustainability, clean and safe products, and they want to see the farms. We try to support retailers with a lot of information,” says Gibson.

As they didn’t grow up in the kitchen or with home cooking, Millennials need to be educated on sweet onions. “We need to get them to understand sweet onions and where they can use them in their recipes, as well as how they can use them,” says Generation Farms’ Stanley. “They like ready-to-eat meals, like Blue Apron. We have to lead them a little with recipes and get them excited.”

Demos do well in club stores, while many grocery stores don’t have enough personnel and capacity to conduct them. “When we talk about merchandising space, we are not really competing with other onions as much as with other items — the strawberries and bananas taking up space,” says Bland. “Retailers who try to blend yellow onions with sweet onions in displays to improve margins can harm sweet onion sales, he says.

Demo Opportunities

Retailers should conduct demos at the start of the season, during promotional periods and store grand openings. Demos help create excitement in the produce department and can solidify a retailer’s position as the ideal local grocery store for produce. “Displays fuel sales. Sweet onions should be merchandised alongside complementary products that draw consumers in and raise the ring at the register,” says Shuman Produce’s Shuman.

Working with suppliers to provide innovative pack sizes can also help. “You have to keep it exciting and give shoppers an option every week,” says Tops’ Tyo. “Those weeks where we pair sweet onions with other items are typically some great weeks for us. We see a lot of lift.”

Sweet onions can be effectively merchandised with avocados and tomatoes for Cinco de Mayo displays, as well as for promoting with proteins like grilled fajitas. NOA’s Reddin recently visited a produce department display promoting sweet onions and bell peppers with fajita foil packets. Signage encouraged shoppers to visit the meat department for their favorite protein. Displays provided information on how to easily prepare fajitas and helped steer clueless shoppers on what to make for dinner. While erecting such displays requires investment in time and logistics, it does pay off. “Cross-merchandising is critical,” says Reddin. “Retailers can do a lot that can be helpful to consumers, leading them and making some suggestions through cross-merchandising.”

Promoting grapefruit, radishes, salads, smaller potatoes and barbecue sauces and other items with sweet onions can also increase sales. Onions Etc.’s Kelso has noticed a practice that involves developing state-specific merchandising areas within stores. A produce department, for example, may construct a “Products From Georgia” section featuring sweet onions along with other Georgia products like sweet corn and green beans. Such displays allow shoppers to experience California- or Arizona-themed meals and stores experience increased sales.

Ethnic Factor

Retailers should also understand how ethnic groups influence purchasing. The United States is experiencing population increases from India, the Middle East, and South Africa and growing Asian and Hispanic cultures, many who are heavy onion consumers. Indians, for example, consume up to five times more onions than conventional American shoppers. “We really suggest retailers value promoting onions because it will bring in new customers or will be active warfare in bringing those people in with your price and quality,” says Kelso.

As commodities fight for produce department space, a challenge is persuading department managers to properly value sweet onions. Strong promotions in large displays can range from 59 cents a pound up to $1.29 a pound, depending on region. “Build big, nice waterfall displays, as long as the prices match,” says Kelso. “Don’t put up a big display and try to sell them for $2.99 a pound and expect them to flow out of the store. The displays must match the price, which also has to match variety, quality and color breaks.”

Kelso suggests merchandisers watch sales numbers, discuss possible deficiencies with suppliers and solicit supplier ideas for increasing sales, and talk with them about new products and merchandising efforts.

To prevent sloppy-appearing displays, retailers should work to keep them free of debris by clipping stems and minimizing
the onions’ “rough look,” particularly those fresh from the field, says Potandon’s Schwartz. Department workers must understand sweet onions are more delicate than conventional onions and therefore require more handling.

The industry does a good job educating buyers about sweet onions’ differences. “When the Texas 1015s began shipping, most retailers knew about them because the Texas shippers shipping Mexican sweet onions had been promoting the Texas product during the winter,” says Schwartz. “Retailers need to strike while the iron is hot. If you’re on the East Coast and you don’t have a prominent department location and big signs calling attention to the Vidalias, you’re really missing a sales opportunity.” Likewise, Pacific Northwest retailers need the same urgency in promoting Walla Walla sweets.

Sweet onions offer plenty of opportunity for increased movement and sales. Through cross-merchandising programs, stores experience increased sales of onions and other products within and outside the produce department.