Cultivate and Capture Carrot Customers

The retail carrot category is growing. Does your store’s set reflect that surge?

Originally printed in the April 2024 issue of Produce Business.

Carrots have enjoyed a place at mankind’s table for well over a millennia. This Old World root veggie remains a New World favorite, with Americans each consuming an average of 8.38 pounds annually, based on the USDA Economic Research Service’s Vegetables and Pulses Outlook: December 2023.

The introduction of fresh-cut technology bringing baby and other value-added carrots to the market in the 1990s, along with organic production and shoppers’ interest in colorful varieties made carrots a year-round, must-stock category for produce retailers.

“The carrot category is growing and probably accounts for roughly 5% of our vegetable sales,” says Terry Esteve, produce and floral director at Robért Fresh Market and Lakeview Grocery, a six-store chain based in New Orleans, LA.

YEAR-ROUND PROCUREMENT

Longtime year-round availability, a relatively long shelf life in whole form, and affordable pricing make carrots a shopping list item consumers often take for granted they’ll find on the shelf. It’s not always that easy on the retail buying side.

“Availability through the Christmas and new year holiday season was tough. Demand was high, suppliers pro-rated and we had several days per week where we were out of carrots,” says Esteve. “Things are back to normal now and supplies are steady. Demand is still good for all the varieties, but not like the winter holiday season.”

Similarly, Charlie’s Produce, in Seattle, WA, which supplies several independent retailers in the Pacific Northwest as well as larger chains such as Fred Meyer and Sprouts, sold almost all its carrots for St. Patrick’s Day.

“Between the higher demand and excessive rain in some of the key growing areas in California, we were ready to reorder as soon as the holiday finished. Nobody thinks of carrots as that important, until you can’t get them,” says Jason Kazmirski, retail specialist for Charlie’s Produce.

Many carrots sold in the U.S. are produced domestically, with California growing over 85% of U.S.-harvested carrots. This production is spread throughout the year from four main production areas: southern San Joaquin Valley and Cuyama Valley (Kern County), the southern desert (Imperial County), the high desert (Los Angeles County), and the central coast (Monterey County), according to the University of California Vegetable Research & Information Center, in Davis, CA.

In general, the first half of the year sees the highest volume from California, with the lowest in the latter part of the year.

“In late February, we were harvesting in the Southern California desert and plan to transition back to the central valley in May,” says David Bright, vice president of marketing for Grimmway Farms, in Bakersfield, CA, adding the outlook for carrot supply through the spring and summer is positive.

Bright says Grimmway continues to expand its growing areas into other regions, including the Pacific Northwest and Southeastern United States. “An added benefit to these regional farming operations is a reduction in transportation costs to customers operating near these areas.”

In February, Israel-based BDA/Dorot Farm, a third-generation grower’s company with offices in Melville, NY, announced it has partnered with California growers to introduce baby carrots to its portfolio.

“Our baby carrot program in California will be a 12-month one for our U.S. retail and foodservice customers,” says Ami Ben-Dror, founder and chief executive. The company also specializes in high-quality jumbo carrots for foodservice and fresh-cut companies, and cello-bagged carrots in 1-, 2-, 3- and 5-pounds delivered to supermarkets.

Beyond California, the two other key carrot-producing states are Michigan, where harvest starts in late July, and Texas. The Morris, MN-headquartered Fresha LLC also grows carrots in Georgia and Minnesota. The Georgia season spans from January to June, while Minnesota carrots are available from August to December.

Matthew Wulf, Fresha’s vice president of sales and marketing, anticipates good availability this year, with consistent supply projected. “The current crop in Georgia is slightly behind in size due to the cooler weather in the Southeast this winter, but the product quality has been excellent. We’ve had a mild winter in the Upper Midwest, which has us positioned for early planting in Minnesota.”

“Our growing regions have not been affected by water availability like some other growing regions,” he adds.

Domestic carrot production dominates the U.S. market. However, Mexico accounts for 75% of the total volume of imported carrots, followed by Canada at 20%, and Israel at 1.7%, according to USDA ERS data as of May 2022.

SOURCE AN ASSORTMENT

Ensuring a robust assortment of both conventional and organic carrot products, including baby, premium, cello, and whole (loose/bunch) items, is essential for driving year-round sales, according to Karen White, vice president of marketing for Bolthouse Fresh Foods, headquartered in Bakersfield, CA.

Carrot category SKUs have grown over the last two decades, offering incremental sales opportunities. The category overall represented 1.9% of total produce sales and 3.9% of vegetable dollars for the 52 weeks ending Feb. 24, 2024, according to Nielsen Total U.S. data. Baby carrots figured at 43% of dollars, whole carrots at 41.9%, and value-added at 15.1%.

“Baby carrots are a top item for us because of their grab-and-go nature,” says Charlie’s Produce’s Kazmirski, adding bulk whole carrots also sell well.

The company often sources the jumbo size, too. “Even if a customer doesn’t buy them, the sheer size of these carrots will catch their attention,” he says. Top-on carrots also sell well, because their “bright green leaves signal freshness.”

Two-pound whole cello-bagged carrots are king for value in today’s economy, according to Robért Fresh Market’s Esteve. “New varieties like rainbow peeled, microwave sweet baby carrots, sticks and chips, and snack packs for kids’ lunches are all starting to surpass the baby peeled in sales.”

While conventionally grown baby carrots in 1-pound packaging continue to hold the top spot in the product lineup at Bolthouse Fresh Foods, White says the company adapts to shifting consumer preferences. Other top-selling SKUs include 2- and 5-pound packs, carrot chips in 1-pound packs, matchstick carrots in 10-ounce, and carrot sticks in 12-ounce packs.

“Consumers are increasingly drawn to these value-added options due to their convenience, versatility, and ready-to-eat nature,” says White.

Kern Ridge Growers, in Arvin, CA, are looking at adding value-added carrot chips to their lineup, according to Rob Giragosian, in purchasing and sales.

Organically grown carrots represented 27.3% of total carrot dollars, according to 52-week Nielsen Total U.S. data ending Feb. 24, 2024. Of organics, whole cellos were top sellers, at 55% of dollars, with baby carrots second at 31.4% and value-added at 13.6%.

“Organic whole carrots are a steady mover,” says Esteve.

When it comes to consumer demographics, Melissa Oliver, vice president of retail sales for Bolthouse Fresh Foods, notes some interesting trends.

“While both organic and conventional carrot shoppers share similarities in demographics, such as household size and racial demographics, there are notable differences. Organic carrot shoppers tend to skew slightly younger, with a higher proportion of millennials and Gen X consumers. Furthermore, households with children show a higher preference for organic carrots.”

Colorful carrots are catching consumers’ attention.

“We get a baby rainbow whole carrot that we peel and package for easy meal prep,” says Robért Fresh Market’s Esteve.

Little Bear Produce, in Edinburg, TX, offers maroon carrots from the beginning of December to the end of March or the beginning of April “until the weather gets too hot,” says company representative Jeff Brechler. “Maroon carrots, which have a sweeter taste and crunchier texture than orange carrots, are a niche/boutique item most popular in natural food stores and high-end retailers. They are also popular as a local product with Texas retailers.”

The company sells its maroon carrots bunched in 25- and 40-pound boxes.

For retail, Santa Maria, CA-based Babé Farms focuses 100% on whole baby bunched carrots in six varieties including French (orange), yellow, purple, pink, white and round (thumbelina).

“One of our most popular items at retail are our Baby Mixed Carrots, which include a variety of colors (3+) to allow retailers to create a rainbow in their produce display,” says Matt Hiltner, marketing manager.

“We anticipate good supplies of all varieties of our colorful carrots heading into spring,” he adds. “While we dealt with a few minor challenges presented by rainy weather earlier this year, the impact was minimal, and we expect to be on track for spring, which is one of our busiest times of the year.”

Grimmway’s sales of rainbow carrots grew last year, adds Bright, “particularly for baby and fresh cello rainbow carrots at retail, as well as several value-added packs at both retail and foodservice, including carrots chips and shreds.”

CULTIVATING SALES

Esteve at Robert Fresh Market merchandises all packaged carrot SKUs in one set. “There’s five or six options, and I try to keep everything in one spot to save the customer time. Time is valuable; you don’t need to be running all around the department looking for what you want.”

While the display layout may vary depending on the retailer and its customer base, Bolthouse’s White agrees creating a dedicated carrot destination set can yield significant benefits.

“We have observed a potential 3% to 5% year-over-year lift in sales when carrot products were grouped in a dedicated display area. Consolidating all carrot products, including whole and value-added options, into one cohesive display can effectively capture consumer attention and drive purchase intent.”

As for promotion, “there’s enough variety in the category to put an SKU on sale every week,” says Charlie’s Produce’s Kazmirski. “We also recently put together a root vegetable ad that included carrots for one of our chains.”

A combination of in-store promotions, digital marketing, and educational initiatives is the best way to promote carrots, says Fresha’s Wulf.

“We provide retailers with promotional materials such as recipe cards, point-of-sale signage, and social media content to help drive sales. Retailers can expect increased sales because of these promotional efforts, especially when coupled with strategic merchandising and customer engagement tactics.”

Seasonal refrigerated displays prominently cross-merchandised with carrots and items from other departments by the entrance of the store or front of the produce section provide shoppers with the ingredients for easy meals or entertaining solutions, says Grimmway’s Bright. “Every season provides a unique opportunity to spotlight and promote carrots.”