Steady, Reliable Sales Keep Mushrooms At Forefront

Shrink is challenging, but nutrients and versatility drive category momentum.

It’s not hard to successfully merchandise mushrooms in the produce department, since most people love their taste, versatility and health benefits. Still, maximizing sales does require a bit of knowledge, some savvy merchandising, value-added options and a willingness to educate consumers.

“In our markets, we are seeing consumers willing to spend more money on premium mushroom products,” says Kevin Delaney, vice president sales and marketing for To-Jo Mushrooms based in Avondale, PA. “Baby Bellas continue to gain share over whites. Specialty items have been growing steadily, and organics have been off to a strong start this year.”

Delaney says having the right product mix for a particular market is key.

“If you have limited shelf space, you need to focus on the core mushroom items and bring in a couple of unique items seasonally to mix it up. If you have 6 or 8 feet to work with, you can have a strong offering of specialty and organic items.”

Greg Sagan, executive vice president of sales and marketing for Giorgio Fresh Co. based in Temple, PA, says he has seen sales increase over the past decade because of “staying on trend with consumers’ lifestyles and staying tuned into what they are looking for in nutrition. The fact that we continue to stay on top of product development trends also has helped that growth. Consumers are looking for items that are versatile and lend themselves to recipes.”

Whites and browns continue to dominate the category, but as Sagan points out, “We are seeing double-digit growth in exotics and specialty mushrooms.” Value-added offerings are also selling well.

MEETING THE DEMAND

Mushroom sales continue to grow at the same rate that they have for the past five years, approximately 3%, says Kevin Donovan, national sales manager for Phillips Mushroom Farms in Kennett Square, PA. The white mushroom is the biggest mover, he says, followed by the brown category. “The sales of the Shiitake mushroom continue to increase each year.”

Over the course of the past two years, Donovan recollects, “the added value of slicing the Shiitake mushroom has greatly added to the Shiitake’s category growth.”

According to Donovan and his colleagues, retailers who sell mushrooms need to incorporate them into their promotional systems to minimize shrink. “It does not matter if it is a loyalty card, promotional ads or recipes and sampling.” The retailer also has to provide enough shelf space to attract consumers and meet the demand for product that is generated through promotions.

 Donovan claims that the nutritional benefits of mushrooms have not been sufficiently incorporated into the retail merchandising on a large scale. “Most of that info is coming from social media. I do believe that nutritional marketing will be used in the future as the retail marketing/merchandising systems improve.”

The nutritional benefits of mushrooms are many and have only begun to be touted, notes Donovan, adding, “The medicinal benefits of mushrooms have only begun to be explored.” The National Mushroom Council has been responsible for a tremendous amount of research, and has dispensed a lot of information.

Donovan calls educational materials “very important, but the problem is finding the right vehicle or vehicles to get the information to the consumer.” His personal preference, he says, is with “recipes, recipes, recipes,” combined with cooking demonstrations.

SELLING POINTS

Mike O’Brien, vice president of sales and marketing for Monterey Mushrooms in Watsonville, CA, cites Mushroom Council data showing the mushroom category at retail is up 3.4% in sales year over year “because mushrooms are sexy from a culinary standpoint. They are delicious and are featured prominently on the Food Network, social media and in restaurants. More and more recipes include mushrooms.”

Health is another obvious selling point, he says. “Do you want a plant-based diet? Mushrooms lead the way.”

Although white mushrooms are still the driver of the category, the brown mushrooms are growing every year. The predominant growth is in the Baby Bella category. Says O’Brien, “Mushroom Council data shows Baby Bella/Crimini mushrooms are cannibalizing the Portabella category and the white mushroom category.”

While they are not a new variety, O’Brien says that he and his colleagues have seen “tremendous” growth in Shiitake mushrooms. “Shiitakes have a meaty texture and a more intense flavor. Cooking brings out their earthy, smoky flavor. Shiitakes are delicious when sautéed or added to stir-fries, soups or pasta dishes.”

The volume is still in fresh mushrooms, O’Brien points out. “However, there is demand for value-added mushrooms, most specifically stuffed mushrooms.” However, he notes that shrink at retail is very high.

Mushrooms constitute one of the most perishable categories in the produce department. To minimize shrink and maximize sales, according to O’Brien, it is important to know your consumers and offer the variety that matches the store demographics. “Once that is determined, it’s blocking and tackling.” He recommends the following:

• Maintain the cold chain from farm to retail shelf.
• Proper ordering to turn product. “Use your history and current trends.”
• Stay in stock. “Out of stocks lead to loss sales, disappointed customers, and really play havoc with your scan data.”

Educational material can play a significant role in fueling increased purchases, O’Brien has found. “How can retailers get shoppers thinking about mushrooms in casseroles, omelets, soups and salads, kabobs and stuffed mushrooms? Retailers can take advantage of the mushroom growth by offering solutions with more recipes and product information.” In addition, the training of produce store team members is critical, “because they are the people who have the most contact with the consumer.”

One of the larger marketing initiatives for Monterey Mushrooms has been promoting the health benefits within the category, highlighting one in particular: its products’ abundance of Vitamin D. “They are the only produce item with natural Vitamin D, important not only for bones, but essential for a healthy immune systems,” says O’Brien. “Vitamin D is just as important for bone health as calcium. If you’re running low, the calcium you get from food won’t get absorbed properly, leading to thin and brittle bones. The main source of vitamin D is exposure to sunlight. When we’re exposed to the sun’s UV rays, our bodies produce vitamin D; mushrooms do the same.”

Space at retail is always a major consideration, no matter the product line, and mushrooms are no exception. “We are fortunate to work with a really innovative group of retail partners,” says To-Jo’s Delaney. “Each of our customers approach merchandising in a way that best works for their store. Regardless of the market or size of the store, we have seen good results when retailers utilize secondary displays during promotions.”

The number of linear feet required for the mushroom set is determined by sales and the holding power of the set. “Sophisticated retailers have cluster sets based on the demographics of the neighborhood,” O’Brien says. Sales can be maximized and shrink can be minimized using true category management for this “image-enhancing, profit-driven, yet very perishable category.” 

What can retailers do to lessen shrink? Aside from maintaining the cold chain and rotating product, says Delaney, “a great way to reduce shrink is through product mix and custom pack sizes. For example, we offer smaller master count packs to make sure stores can have an optimal level of inventory.”

Educating consumers as well as retail partners on menu trends has been, according to Delaney, a “key initiative for us. We launched our Kitchen Live series, which features quick videos that ultimately highlight the versatility of mushrooms.”