Treating Onions as a Commodity is Selling Them Short

Onions may be a staple, but they never go out of style.

Originally printed in the September 2022 issue of Produce Business.

Onions need love, too, and they need it in the form of visibility, because they are more than an everyday commodity.

Onions are not just an ingredient in soups and salads, although they are critical in that regard. They just don’t accompany roasts or act as an ingredient in stuffing, although they still do. As consumers learn more cooking styles to make eating livelier and healthier, onions become a bigger consideration.

Treating onions as a commodity is selling them short. Consumers need to be reminded of how versatile and delicious onions are. And with the addition of sweet onion from more sources, retailers have more promotional fodder. However, that should only be a component in a promotional plan that covers the full year, if produce departments are going to generate maximum onion sales.

At Seasons, Flushing, NY, Zeke Kreitner, chief produce officer, says retailers should treat onions and potatoes just like they would other fruits and vegetables, especially focusing on color. In the chain’s five neighborhood supermarkets and two Express convenience stores, he uses color contrast and striping to spotlight onions along with potatoes. Rather than emphasizing seasonal items and promotions, Kreitner wants to draw shoppers into the section every time they visit, based on the aesthetic of the section and the quality it promises.

“We keep it mostly consistent,” Kreitner says.

Mike Servello of Bargain Grocery, Utica, NY, takes a different approach. He says his customers, many lower income and immigrants, like to buy onions in bulk, so he offers 10- and 50-pound bags.

However, Bargain Grocery spotlights premium onions when available, and gets a strong response as shoppers take advantage of their particular qualities.

Troy Bland, chief executive, Bland Farms, Glennville, GA, says retailers have an opportunity to boost the position on onions in the produce department and make them more attractive to consumers who are attentive to food trends, whether regarding flavor, health or origin.

“The produce department is the key department for retailers,” Bland says. “It is the most exciting department with all its color and fresh aroma. It is supposed to convey freshness and goodness. More and more retailers are now sharing farm stories about who actually grows their onions, peaches or potatoes. They are using signage in-store with pictures of the farmers and stories online to bring their shoppers closer to the farm where their food came from.”

As part of the response to such trends, onions should get a significant profile and conspicuous display, he says.

AMERICANS LOVE ONIONS

The United States ships, on average, 400 loads of onions a day, says Olivia Kelso, food safety, marketing and sales, JJB Family Farms, Escondido, CA. “The volume consumed usually peaks during tough economic times when people stay home and cook. The consumption of onions follows human behavior — if they are eating at restaurants, that is where the onions are going and vice versa. Onion demand, whether at a retailer or foodservice, is a key indicator of how business is tracking.”

“Onions are a staple item. They never go out of style,” says Marc Turner, general manager at Bushwick Potato Commission, Farmingdale, NY. “If anything, the demand has increased in recent years.”

“Onions continue to be a strong commodity in demand,” agrees René Hardwick, director of public and industry relations, National Onion Association (NOA), Eaton, CO. “With the pandemic still hovering, we’ve worked hard to inform consumers that onions help build immunity when you eat them.”

Of course, onion demand has been ramping up with the reopening of many restaurants. NOA surveys show that, before the pandemic, 94% of the nation’s menus contained onions, Hardwick says, and because of that, 50% of the onion market went to foodservice. “With restaurants opening back up and crowds coming back out, we anticipate demand to continue to rise.”

Hardwick says little has changed in terms of major onion growing areas and there is a lag in consumption data, as the U.S. Department of Agriculture has been a bit slower to calculate per capita consumption of onions, and their numbers are typically two years old.

Still, she says, Americans eat a lot of onions. “We can say rather confidently that Americans, on average, consume about 20 pounds of onions per year.”

Turner says that big bags of onions are starting to flow back into restaurants as foodservice operators recover. “Restaurants are getting back on their feet,” he says. “The loosening of rules is going to help onions and all produce in restaurants.”

CREATE PROFITABLE RETAIL BUILD

Retailers can take advantage of onion’s flexibility when building merchandising programs. Kelso says, because it is so compatible with so many foods, the onion “pretty much merchandises with everything but ice cream.”

Doug Bulgrin, onion salesman/onion shed manager, Gumz Farms, Endeavor, WI, maintains, however, that merchandising should have its roots in the basics.

“Onions should be paired with potatoes on the store level, which is a benefit Gumz Farms excels at, packaging its own onions and potatoes,” he says.

Bulgrin adds demand for onions is up. “We are seeing a larger focus on locally grown. Local is becoming more and more important. Consumers love to get to know their farmers.”

Cross promotions also remain important, says John Shuman, president and chief executive of Shuman Farms, Reidsville, GA. “We encourage retailers to build cross-merchandising displays in the produce department as well as the meat department.”

All in all, Kelso says, merchandising onions requires attention and dedication to generate maximal results.

“Onions are not the sexy item in the store, but they are the staple,” she says.

Hardwick recommends retailers promote the many ways to eat onions, and a health message. “They are a superfood that helps promote health. With more people using social media today, blog posts and online recipes showing consumers how they can easily put the immunity-building power of onions in their meals can only help.”

Groceries are savvy when it comes to promoting products, she adds. “We’ve seen coupons, digital coupons, great displays. Certainly, we’d love to see onion recipes as a part of their regular promotions through social media, and digital newsletters, etc.”

LET’S TALK PRICE

Solid, well-maintained displays suggest to consumers the onions they see are high quality. Only at that point is price an issue, Kelso says. “Like everything in the store, quality sells.”

Given that onions encompass an assortment of both commodity and seasonal/specialty items, price promotions can draw shopper attention to onions.

“Everyone likes a deal,” Bland says. “Giving shoppers price promotions is important, but also giving them packaging options from individual onions in bulk displays to 3- or 5-pound bag options.”

Kelso says the importance of price promotions in the marketing mix depends on how the store is positioned and how it approaches pricing.

“If your normal price is $1.49 a pound, promotions are healthy. If you are at 69 cents a pound, promotions are not needed,” she says.

Gumz Farms’ Bulgrin says price promotion is less important than generally pushing onions for holiday cooking and seasonal opportunities. “A sale on grills at a store might have a positive impact on onion sales, as families planning meals on their new grill need onions as toppings, etc.,” he says.

On a consistent basis, Bulgrin suggests retailers use in-store recipe ideas to engage consumers, or circulars in larger cities where competition is higher.

Traditional methods of marketing onions remain important, including circulars however they are presented to consumers, whether as paper publications or online. Still, it’s important to consider newer means of reaching consumers that certainly can help move products.

Bland says it’s important to meet shoppers where they are in the real and virtual world. “Everyone is online and has a supercomputer — mobile phone — on them all the time, so you have to be on Instagram, Facebook, etc.,” he says.

“You also need to email new ideas and promotions that are relevant to them, and you have to use traditional circulars, too, if that is also where your shoppers go. We use social media and video to bring shoppers closer to the farm where their onions are grown, with field updates throughout the season. We also like to provide online and in-store seasonal recipe ideas, tips and tricks for consumers to try and share.”

EVALUATE PACKAGING OPTIONS

Now might be a good time to re-evaluate packaging and its role in onion sales. Shuman says packaging in its several dimensions can set up onions for sales based on consumer needs.

“We offer a wide variety of packaging options for retailers, such as large display bins, consumer bags, display-ready containers and cartons designed to create meal solution opportunities in the produce department, driving incremental sales,” he says.

Bland Farms saw an increase in demand for its consumer pack offerings during the pandemic, Bland says. “The increase was in all consumer bags sizing that we offer, which ranges from 2-pound bags up to 6-pound bags. We saw an increase of purchases of consumer bags from our retail customers as well as our club store accounts.”

He says the trend has leveled off recently, but demand for consumer bags still remains strong. “It’s difficult for us to measure curbside pickup and delivery program demands with our retail customers, but I believe that is one of the reasons we see consumer bag demand remain at these levels.”

Packaging and branding both can be a solid basis of promotion, online and off. The NOA’s Hardwick says a lot of its growers have packaging for their brands, and grocery stores’ placement of onions in their produce aisles have been helpful to showcase their products.

Turner says branding can remind consumers about the specific qualities of onions and suggest use occasions, such as grilling.

“Sweet onions have been positioning themselves well, with Vidalia being the big name,” Turner adds. “If you can brand as part of a produce commodity, you can get recognition. But you also can piggyback off big names like Vidalia with sweet onions grown and shipped from other parts of the country. Vidalias, for example, are only available for a certain time period, so other areas benefit from the Vidalia brand as it supports all sweet onions.”

GRAB SWEET OPPORTUNITIES

As a specialty item, sweet onions provide an opportunity to get consumers buying more and even trading up purchases. Of course, the seasonal element is increasingly about marketing, as sweets are now a full-year commodity. Some produce departments do little to make them stand out, but others engage in more aggressive merchandising and marketing especially in the traditional season from spring into summer.

Sweet onions are favored by many consumers for grilling, kabobs and summer salads, however, they can contribute to meals throughout the year. Retailers should follow all sweet onion marketing with in-store commitments.

“Our experience and data suggest that retailers should build large, eye-catching displays of sweet onions especially during Vidalia season to bring the most traffic possible through the produce section,” says Bland. “Sweet onions are such a vital part of the produce department because of their versatility and usage in all sorts of recipes. Sweet onions are in such demand that retailers must offer them year-round.”

As a Vidalia specialist, Bland Farms believes the well-known sweet onion variety has strong promotional potential. “Vidalia sweet onions are the category leader, and we expect continued strong demand within the category and to be a driver in overall produce sales,” Bland says.

Consumption remains the strongest in the Southeast, although it is growing throughout the nation, he adds. “Vidalias have grown in their demand throughout the years and have a broad reach across all demographics. The name Vidalia is anticipated, craved and recognized by consumers.”

JJB Family Farms’ Kelso recommends retailers place sweet onions up front in the produce department, but for “everything else, have the consumer walk through the department to get their onions.”

“They are going to buy them no matter what. Everyone eats onions. Put them where people are used to them and don’t move them. People are creatures of habit. That’s a good thing.”

• • •

Peruvian Sweet Onions Keep Category Rolling Year-Round

The Peruvian contribution arrives just in time for devotees of sweet onions, and retailers can benefit from additional promotion to strengthen sales year-round.

More consumers than ever are aware of the virtues of sweet onions and their flavor profile. However, sweet onions from Peru provide an opportunity to get a better value sale all year-round. With sweet onion promotions and branding emerging from the grower side, including those who are part of the Peruvian deal, produce departments could benefit from conspicuous merchandising and marketing.

Although they may be treated as a continuity product and not given as hearty a merchandising push as their American cousins, Peruvian sweet onions make their way to North America as the seasons end for the popular Vidalia and Walla Walla Washington onions. Peru provides an ideal climate, soil and growing conditions to ensure retailers in the United States can keep premium sweet onions in their stores from September to March.

Moreover, they are a step-up product that arrives when eating patterns shift back indoors, and consumers still crave that sweet tang. Given that salads are always in demand and more people are grilling all year, Peruvian sweet onions bolster sales whatever the season.

Veteran Vidalia grower Shuman Farms, Reidsville, GA, began producing sweet onions in Peru more than two decades ago to meet consumer demand for premium sweet onions outside the growing season in the U.S.

And another veteran Vidalia grower, Troy Bland, chief executive, Bland Farms, Glennville, GA, began importing Peruvian onions gradually and now does a major business. He’s a believer in the ability to drive onion sales through attractive merchandising and adapting promotion to consumer trends.

“We have been importing onions from Peru for more than 25 years and started importing just a few containers in the beginning to supply a few accounts,” Bland says. “Both the volume and demand grew exponentially each season over the next few decades, primarily because of consumer demand for sweet onions and because Peru onions are much better than other choices in the marketplace.”

MAKING A NAME

Shuman Farms not only grows and imports Peruvian onions, but also promotes them as premium by selling them under its RealSweet brand.

The company was an early pioneer in the Peruvian sweet onion industry, and continues to build its business in onions from Peru. “Shuman Farms is heavily invested in the region, with a full-time staff and infrastructure to support its program,” says John Shuman, president and chief executive of Shuman Farms.

Shuman recently updated its facility and packing house in Peru with new grading lines and sorting equipment that will improve their quality of product and allow for a more efficient final repack in Georgia, he adds.

Quality is a major issue, given the esteem onion lovers tend to have for domestically grown sweet onions, and it’s a point of emphasis for Shuman.

“We believe our RealSweet Peruvian sweet onions are the premium sweet onion that allows retailers to provide the same quality of sweet onion to our customers year-round, helping them build sales and consistency in the category,” he says.

The company offers a variety of packaging options for retailers, such as large display bins, consumer bags, display-ready containers and cartons designed to create meal solution opportunities in the produce department and drive incremental sales, Shuman adds.

For Bland, the continuity provided by onions from Peru is critical.

“They are a very important part of our year-round supply offering of sweet onions,” he says. “Peru’s weather and soil is similar to southeast Georgia where Vidalias are grown, so we use the same seed variety we use in Vidalias to grow our Premium Sweets in Peru. Springtime is fall here, so we can satisfy customers’ demand for sweet onions all year long.”

According to consumer consumption and purchase research conducted by Shuman Farms, the sweet onion consumer is 55 or older, living in a two-person household, with an annual income between $50,000 and $75,000.

The average consumer eats 1.6 pounds of sweet onions per year, Shuman says, and the vegetable is a basket builder.

“When sweet onions are in consumers’ market baskets, they are more likely to purchase fresh beef, tomatoes, potatoes, squash, mushrooms and peppers,” Shuman explains. “We encourage retailers to build cross-merchandising displays in the produce department as well as the meat department to take advantage of these consumer buying habits and drive incremental sales. The top three dishes that sweet onions are found in are salads, ethnic dishes and beef dishes.”

Bland says promotion of Peruvian sweet onions is an opportunity to bring more business to the produce section by getting consumers to spend more money in the department as they go about seasonal activities.

“We are always working to provide new consumer promotions each season to grow the category and brand awareness,” he says. “These turnkey promotions also allow retailers to customize them to reflect their merchandising style.”

This year, Bland Farms is planning a fall promotion called Gameday Sweetness, which features tailgating-themed display bins, posters, new recipe ideas, retail display contest and social media giveaways. The tools can help retailers build game day displays, and “bring even more traffic through the produce department.”

Among Shuman’s onion promotions, one has a special focus.

“For more than 25 years, the Pink Ribbon and the month of October has been associated with breast cancer awareness with the goal of raising funds for research and a cure,” Shuman says. “We know that many people’s lives are impacted by breast cancer, and it is our privilege to be able to do our part, raise awareness and provide a donation to further research that will hopefully lead to a cure.”

In October, Shuman will turn its Real-Sweet sweet onion bags pink and offer display bins for an incremental sales opportunity in produce departments. It has also created in-store signage that explains the cancer-fighting antioxidants found in sweet onions, for stores to use on their displays.