Is a bulk-nuts program right for your produce department?
The health benefits of nuts have been well established with studies that suggest adding nuts to a person’s diet, regardless of the type, can contribute to heart health, help lower cholesterol and deliver a lot of nutrition in a pretty small and natural package.
While recent consumer trends have seen a preference for nuts that have been infused with intense bold flavors, such as Sriracha and jalepeño or roasted with honey, nuts by themselves have a variety of great flavor profiles. From salty or sweet, to creamy or fatty, nuts have a lot to offer as a standalone ready-to-eat snack or as a great addition to any snack mix.
The versatility of nuts is also well understood by consumers who use them chopped, crushed, halved and slivered for cooking, baking or finishing touches. With a little promotion, attention to bins and creative POS materials, retailers can implement a successful bulk-nut program that will have an appeal to consumer trends toward healthy eating and wholesome products.
Is Bulk Better
Whether buying in bulk is better than purchasing packaged nuts is really up to the individual consumer, and this preference can change by store location.
Consumers buy bulk for a number of reasons. Concern for the environment might be a factor guiding the purchase of one customer as the reduction in packaging materials creates less waste. For thrifty shoppers, a lack of a name-brand labels can mean a lower price. For adventurous home cooks looking to try nuts in a new recipe, they may prefer to purchase just a handful of nuts instead of committing to a larger package they have no need for.
While consumer-buying habits may differ, bulk purchasing can offer consumers control. More control in the amount they purchase and spend. Buying bulk also allows consumers to pick and choose product themselves.
“Customers like bulk, because they aren’t limited to a certain quantity,” says Moe Issa, owner of Brooklyn Fare, a Brooklyn, NY-based neighborhood grocer with eclectic options and a variety of prepared foods with one other location in Manhattan. “They can choose how much they want of what they want. Bulk gives more flexibility to the consumer.” This doesn’t necessarily mean higher sales when shoppers choose bulk, however. “They buy what they want,” says Issa. “Sometimes it [the purchase] is more than a packaged nut item, sometimes it’s less.”
Providing Space for Bulk
Some retailers may face restrictions that limit the amount of space they can dedicate to bulk items. Others, like Brooklyn Fare, are able to devote a good deal of real estate to the bulk nuts category. How much? “A lot!” says Issa. “About 20 feet of space in our Brooklyn location is dedicated for bulk-nut dispensers and house-made nut butters of all sorts.”
In addition to offering a choice for consumers, Amy Murphy-St Laurent, director of marketing for Sid Wainer & Son, headquartered in New Bedford, MA, sees bulk nuts as providing retailers with advantages packaged nuts do not. “Buying and selling nuts in bulk is more cost effective,” she says.
Bulk displays need extra attention, however, and Murphy-St Laurent reminds retailers, “displays need to be rotated and cleaned frequently to ensure a great display.”
Stephanie Blackwell, owner of Aurora Products based in Orange, CT, does not necessarily see any consumer preference for bulk over packaged nuts at her company, but she does see advantages for retailers.
“Bulk nuts offer the customer a self-service approach; whereas the consumer may feel that the product has been handled less and is straight from the farm.”
The larger movement toward consumers looking for more locally sourced produce gives bulk nuts added appeal as an honest, unprocessed product that comes as exactly as advertised.
Nutty Health Halo
While most consumers may be aware of the health benefits of including nuts in their diet, POS reminders can only help stress this message at the retail level. For Issa of Brooklyn Fare, “We have small descriptive signs right up front describing each item. In terms of the health benefits of eating nuts, consumers are very well educated on the facts; most of the time, they know what they’re looking for and the health benefits associated with an item.”
Murphy-St Laurent stresses this fact as well, saying, “Most customers are aware of health benefits, but great signage, recipe and usage ideas are all ways to communicate to customers.”
For Blackwell at Aurora, she thinks while consumers may not know the specific health benefits of different varieties, they are generally aware of the health halo of nuts in general.
“Maybe they don’t know that almonds are rich in vitamin E and high in fiber; or Brazil nuts are rich in selenium that helps men’s prostates, but they do know that nuts are good.”
Issa sees proof of this in the numbers. “It is apparent by the sheer volume of nuts being sold. Consumers are very well educated on the health benefits of eating nuts, and they buy a lot of them.”
Merchandising has an important role to play in bulking up bulk-nut sales. For Issa at Brooklyn Fare, the store’s house-made nut butters provides in-store cross-merchandising opportunities.
“If a customer is looking for peanut butter and whole walnuts, they can choose between name-brand peanut butter or house-made Brooklyn Fare-branded peanut butter, and select bulk or packaged walnuts, all from the same area of the store,” says Issa. “It’s logical and more convenient.”
Blackwell has some recommendations to produce executives who choose to implement a bulk-nut program in their stores. “Make sure you get sealed containers to hold the product,” she advises. “Also, when a bin is empty, or close to empty, clean out the bin rather than just refill it. Last, but not least, rotate the product.”
David Lipson, president of Valued Naturals based in Dover, NJ, also advises retailers to stay on top of displays with dedicated staff who can, as he says, “Constantly fill the bins, clean them, take out the lollipop sticks that get thrown in there from kids — that’s a full-time job.”
The Shrink Factor
Keeping bins well stocked and tidy are important to generating sales, but in addition to the benefits, selling bulk does present some challenges to retailers. Retailers can combat problems of shrink and contamination with a little due diligence.
“There are bulk bins that protect the product from contamination by keeping the product in tight containers,” says Blackwell. “Infestation and contamination can cause a lot of shrink. How much higher shrink is there in the bulk category? I don’t know the number or percentage; however, I imagine significantly more. That’s why bulk is not really inexpensive. There is a lot of shrink due to product falling on the floor, people changing their mind and leaving their baggie on the shelf, infestation that spreads across all bins, et cetera.”
The Right Price
While problems with shrink and staff requirements to keep bins clean, rotated and stocked is something retailers need to consider, Lipson at Valued Naturals also cautions executives to make a careful assessment of their bulk programs to ensure they are getting the product at a fair price from wholesalers.
“I think [retailers] should have [bulk nuts] well priced and compared against applicable lines from companies who provide a very similar program, such as pre-packaged. If they still find that bulk works well for them, then that’s excellent. If they don’t, then they should make a decision and they can regain a lot of linear feet.” Making an assumption about price can lead retailers down the wrong path, so it’s definitely worth the time to pay close attention to the numbers.
As Lipson says, “Our retail program, which is very well priced, is geared toward the consumer. People often like to think the bulk will be cheaper, but it’s far in excess of what it should be, and that’s what typically slows down the product.”
He says if the price isn’t right, the convenience and control consumers are able to gain from bulk purchases will not make the program a success for retailers.
While selling bulk nuts may not be right for every produce department — either due to space constraints or the particular buying habits of the store’s demographics, a well planned, well priced program can yield benefits for both retailers and customers. Like any other product, utilizing proper POS materials and maintaining clean, stocked displays are key to selling bulk nuts. Educating customers about the health benefits of bulk nuts and emphasizing their versatility, utility and convenience will also help drive the program’s success.