BY JIM PREVOR, ORIGINALLY PRINTED IN MARCH 2013
Analyzing consumer behavior via sales trends is wrought with complexity. For example, back in 1989, when 60 Minutes ran its famous report on Alar, apple sales plunged. It would be easy to draw a causal link that the TV show raised fears about apples, causing sales to decline.
A thorough study of the situation, however, revealed this was not the whole truth. After the publicity surrounding Alar, many retailers decided to put other items on special. This meant there was less space for apples, the prices were not as promotional and not much marketing was done to push apples. Apple sales certainly did decline, but was this decline due to consumer concern over Alar, or due to retailers reducing the frequency of apple promotions? It is not easy to ferret out these differences.
So, it is difficult to assess the dynamics at work when we look at issues such as health. There is no question there are many public health advisories and much marketing around this issue. It certainly seems logical that consumers, looking to enhance their health, will increase their purchases of fresh produce. Yet, it is not clear this is happening. Transitory sales figures may go up and down, but there is little evidence per capita consumption is actually increasing.
Typically, it is impossible to conduct controlled experiments as to what influences sales. So, if carrot and fresh-cut salad sales boom in January, is that due to New Year’s resolutions or Super Bowl parties? It is difficult to say.
Increased consumption must come about by changes in eating patterns, notably the replacement of protein-centric plates with produce-centric dishes.
Some categories certainly are growing in sales. Almost by definition, new innovations in fresh-cut vegetables and fruit will drive these categories. The hope, of course, is that such innovations will boost consumption overall, but it is not clear the extent to which this is happening.
Maybe if one spends all day eating junk food in the car, one yearns for healthy fresh food at dinner. Maybe if one snacks all day on cut vegetables, one yearns for a steak at night. Our knowledge on all these things is just not great.
Sometimes production itself is the driver of consumption — a sort of “supply-side” economics for the produce industry. If the volume of Rainier cherries sold grows faster than Bing cherries, that tells us suppliers are producing more Rainiers. If the growers are correct in their estimation that consumers will pay a premium for this variety, the decision to grow more of it will be profitable. If not, prices will decline, but volume will still increase, as production typically gets sold.
Sometimes, what we call premium products in the trade are, in fact, basic products for certain dishes. So, if specialty mushrooms increase in sales, it is not always true that consumers are showing a willingness to trade up to a more expensive product. Maybe those who use shiitake mushrooms are not simply replacing them for button mushrooms as a side dish for steak; maybe they are using them in an Asian dish that requires the item.
It is also difficult to assess consumer intent if the data we are drawing from is solely from retail. Maybe the growth in specialty mushrooms is a result of consumers economizing by trying to cook dishes they previously purchased in restaurants.
Tastes change, cooking becomes more adventurous, and travel and media introduce people to new items and ways to use them. So, it is not surprising to see items such as cilantro, edamame and jicama increasing in sales and, presumably, consumption. The challenge for the trade is to turn this into additional total consumption. Does an edamame appetizer add a produce dish to the menu or replace a side dish?
We also need to consider that rapid growth often comes on a very small base. It is terrific that habanero peppers can increase sales by 104 percent, but it is worth noting that the entire chile pepper category — of which habanero is a tiny part — constitutes less than one-third of the pepper category.
Without a doubt, global sourcing increases sales of certain products, as it puts popular items, such as grapes and blueberries, on the shelves virtually all year long. The unknown question, though, is to what extent consumers who buy grapes because they are available year-round, buy fewer, say, apples because their favorite item is always available.
In the end, increased consumption must come about by changes in eating patterns, notably the replacement of protein-centric plates with produce-centric dishes in which protein serves as a flavoring. In other words, people need to switch from a steak to a stir-fry flavored with beef. Without this kind of switch, consumers may drive sales of one item or another, but are not likely to change overall consumption patterns.
Produce industry icon Jim Prevor, who founded Produce Business magazine in 1985, died Nov. 7, 2022. To honor his legacy as a maverick thought-leader, this space spotlights the best of Prevor’s ‘Fruits of Thought’ column, which garnered more than 200 awards in business journalism.
