Fresh Ideas For Driving Produce Consumption

Compared to other grocery departments, the produce department has been somewhat shielded from inflation over the last five years. While many categories have seen prices skyrocket and fall, produce inflation has remained relatively moderate.

This stability has translated to produce being the only fresh department to gain dollar share compared to two years ago (+0.7 points), but produce sales and volume haven’t surged as much as expected. Lower prices have not translated into more pounds sold, raising questions about why produce is not attracting the consumer attention that leads to substantial sales growth.

There are some encouraging trends within produce, particularly for certain fruits. Berries have seen a notable increase in consumption over the last four years, with annual eating per capita rising from 25 to 31. Bananas have reached a five-year high in per capita consumption despite fewer total pounds sold at retail, and citrus fruits are seeing a resurgence, pointing to a renewed interest in fresh, vitamin-packed options and convenient, healthy snacks.

The story is less positive on the vegetable front. Getting consumers to eat more vegetables has been challenging for years, and this trend continues. Across the board, vegetables are consumed less frequently than in the prior year.

One key challenge facing the produce industry is where consumers buy their fruits and vegetables. Traditional grocery stores are losing market share to club and mass/supercenters and other non-traditional channels, like farmers markets and online platforms. In many categories, the pounds of produce sold at mass and club surpass the amount lost at traditional grocery stores.

This shift in consumer shopping habits poses an issue for grocers who rely on foot traffic to boost overall sales.

Internal competition within the produce department raises another issue. The industry often competes within itself, pitting fruits against one another, rather than encouraging overall produce consumption.

This “bananas versus oranges” mentality can be counterproductive, shifting the focus away from growing the total basket size and retailer market share, and limiting growth to seasonal fluctuations. For example, during the mandarin orange season, these fruits may see a boost in sales, but this doesn’t necessarily translate into sustainable, total department growth.

Instead of competing internally, the produce industry should focus on promoting the consumption of a wider variety of fruits and vegetables to ensure consistent consumer engagement and loyalty.

The most significant opportunity for growth in produce lies in marketing. The category suffers from fragmented management by commodity versus investing in overall department strength. As a result, major categories are often under-marketed, especially relative to the ever-increasing competition from other aisles, where brands and consumer-centric marketing drive demand, as well as long-term shopper loyalty. Varieties and attributes are equivalent to “brands” in produce — we should leverage these to drive interest and, ultimately, sales.

The most significant opportunity for growth in produce lies in marketing.

Without cohesive marketing strategies, the produce industry lacks valuable opportunities to engage consumers, especially younger generations who are more influenced by lifestyle messaging and product variety. Currently, shoppers under 35 have less, and a declining, share of their total food and beverage spend in fresh produce than their predecessors at the same age.

Relying solely on price cuts is not enough to drive demand; the industry must focus on making fruits and vegetables more appealing, not just affordable. Our competition is for share of stomach, not the shelf.

Grapes offer a fantastic, timely example of the power of viral marketing and consumers’ natural interest in fresh produce. Despite high inflation and limited trade promotion, grapes have seen 17% dollar growth in 2024, driven by viral TikTok trends where users share creative ways to enjoy them, like Jell-O-dipped frozen grapes or tanghulu.

Cucumbers have also experienced a surge in popularity due to social media, leading to double-digit pound growth.

The buzz around grapes and cucumbers online translated into an impressive $55 million in additional sales for grapes and $19 million for cucumbers compared to August 2023. This trend, led primarily by Gen Z and Millennials, highlights how social media can create new consumption habits and significantly boost produce sales.

Younger consumers are more likely to discover new foods through social media and digital platforms than traditional advertising channels. By educating these consumers about unique produce varieties, such as seasonal flavors or ways to make them taste great, the industry can create a sense of loyalty and excitement around fruits and vegetables.

The rise of unique produce varieties shows there is room for growth through branding and differentiation. Younger consumers are willing to pay a premium for fruits and vegetables that offer something different — whether it’s a new flavor, a better texture, or even a story behind the product. The key is to engage these consumers online. By 2030, 70% of all consumer spending will be influenced digitally, regardless of where the purchase happens.

While inflation has been less of a burden on produce than other categories, the industry faces significant challenges in driving consumer interest and boosting consumption. From channel switching to internal competition to a lack of marketing investment, what worked before will not work now nor in the future.

There is significant potential for growth, especially by leveraging targeted marketing and social media trends to engage younger consumers. By focusing on education, variety and branding, the produce industry can turn these challenges into opportunities and drive sustainable, long-term growth.

Jonna Parker is vice president of the Fresh Foods Client Insights Group at Circana.