In recent years, retailers have used fresh departments to differentiate their stores and boost perceptions of freshness, indulgence and quality with consumers, and the produce department can be a key element in this type of strategy. In a retail environment where consumers are increasingly looking for healthier, fresher meal and snack options, the inherently healthy produce department is well positioned for future success and growth.

The State Of The Department

Fresh produce accounts for 32% of total fresh sales, the second-largest fresh department behind fresh meat. In the U.S., produce is a $39.2 billion department, with a compound annual dollar growth rate of 3.7% from 2011 to 2015. It’s no surprise that produce is a widely purchased department with 99.7% of U.S. households purchasing annually, but the department is also tied to higher overall basket rings than baskets that don’t include produce, $62.40 for baskets that include produce versus $33.55 for those that do not. And though nearly everyone buys produce, what they’re buying and the values driving their purchases are evolving. We’ll review two of the key trends — consumer demand for health, wellness and convenience as well as “trendy” products — affecting the department today.

The Health Halo

The produce department is benefiting from a nation that is aspiring to better health, or more specifically, to losing weight. Fifty percent of Americans are trying to lose weight, and one of the top methods is incorporating more fresh foods into their diets. Produce obviously fits the bill for the significant portion of consumers seeking foods that are less processed (45%), with less fat (59%), and less sugar (57%). Twenty-first century health and wellness devotees also want to know where their food comes from and what it’s doing for them. In this sense, produce has a deep well of opportunity to draw from.

Take for example, the “local” movement — demand is linked not only to perceptions of superior freshness and quality, but also ideas that go beyond individual health — locally sourced food is good for the local economy, more sustainable, etc. A recent survey from the Harris Poll revealed that 67% of respondents consider it important to buy locally sourced produce. Retailers can and are taking advantage of this trend by carrying “local” fare, which presents fewer logistical challenges than in a fresh department like meat or seafood.

And we can’t discuss health and wellness claims without touching on organic, which accounted for 8% of total produce sales in 2015 (up from 5% in 2010). Organic produce has connotations of healthier, more sustainable product, and these factors are driving the sales of organic produce at more than four times the rate of conventional produce. In 2015, organic fruits and vegetables increased dollar sales 16% and 14%, respectively; while dollar sales for conventional fruit and vegetables increased 3%, respectively.

A final, critical component to capitalizing on the health and wellness trend in produce is consumer education. Retailers and suppliers can do the work for consumers by citing specific health benefits of produce products via in-store merchandising and advertising, while retailers and suppliers alike can tackle branding in traditionally unbranded categories and use packaging to tout health benefits.

The Convenience Factor

However, success in the produce department requires more than relying on the health benefits of produce, clearly communicated or otherwise. In fact, traditional staple categories (such as whole apples and bananas) had flat or declining sales in 2015; while products offering additional benefit for consumers (think convenience, bold flavor, snack-ability) or those gaining in popularity thanks to restaurant and social media trends are driving growth.

In 2015, consumers spent less annually on whole staples like whole apples, bananas and carrots (down 4%, 1% and 3% in dollar sales, respectively). They spent more on products that offer more convenient meal prep, like packaged salad and pre-cut vegetables (which increased dollar sales 9% and 8% respectively), along with more convenient snacking like berries (up 6% in dollar sales in 2015) and citrus (which increased dollar sales 8% — driven by the growth of mandarins, the “single serve” citrus option).

Shareable online recipe ideas and inspiration from restaurants are also pushing the boundaries of usage occasions for certain produce products. For example, cauliflower is becoming popular not only as a side, but as a base for pizza crust (cauliflower sales increased 9% in 2015, and increased volume sales slightly despite a 7% increase in average retail price).

Dates are becoming a popular snack and alternative to processed sugar, and historical trends reflect growing consumer interest, with a compound annual dollar growth rate of 15% from 2011 to 2015.

Popular flavor trends across the store are also trickling down to the fresh source and increasing sales for whole/cut commodities (such as coconuts), which increased dollar sales 12% and 15% during the latest 52 weeks. Whether you’re a retailer or supplier, successfully navigating these trends for a winning produce strategy begins and ends with the consumer.