Getting the most out of grape merchandising
The fresh table grape category tallied nearly $2.7 billion in retail sales in the United States in the 52 weeks ending May 28, 2016, an increase of 6.7 percent, or $169.6 million, compared to the previous year’s numbers.
Recent research by Chicago-based Nielsen Perishables Group further shows the volume of fresh table grapes increased at retail by 6.2 percent to more than 1.21 billion pounds overall. This represents not just growth in the overall grape category, but in all sub-categories, and in both volume and value. The data also shows branded grapes increased sales more than 14 percent and now account for 20 percent of all dollars spent on grapes.
“When the economy is strong, consumers are more inclined to buy grapes on a weekly basis, especially if they are at some type of value pricing for incentive to buy,” says Keith Andrew, sales manager for Delano, CA-based Columbine Vineyards. “When the economy is weak, most consumers look for value deals, and then may be enticed to buy grapes on that trip to the store. Either way, merchandising is a catalyst.”
Color My World
Karen Brux, managing director of North America for the Chilean Fresh Fruit Association (CFFA), San Carlos, CA, says red grapes account for approximately half of America’s total spend on grapes and half the total grape volume.
Nielsen numbers show this sub-category increased 5.2 percent to $1.38 billion last year. Meanwhile, approximately $1.12 billion was spent on white grapes at retail — an increase of 8.8 percent more than the previous year. Similarly, the volume of white grapes sold was up 8.7 percent, to 489.2 million pounds.
“White (green) grapes made the biggest contribution to growth in the grape category in the last year in absolute terms,” says Brux. “Though accounting for a smaller share of the overall grape category — 40.2 percent of the total volume and 41.2 percent of total value — white grapes generated 53 percent of the increase in spend (compared to 40 percent for red grapes), equivalent to more than $90.1 million.”
Nielsen further shows that for the black (blue) grapes category, there was a 4 percent rise in value to $185.8 billion and a 3 percent increase in volume to 82.26 million pounds.
Natalie Erlendson, program marketing manager for Sun World International LLC, based in Bakersfield, CA, says recently conducted consumer research by the company showed consumers primarily know grapes by color, though they do have an interest in varieties with unique flavors as a special treat. “In their everyday shopping, consistent quality is the most important factor in purchase decision,” she says. “We believe desired consistent quality is achieved through superior proprietary varieties and a dedication to growing for flavor. This is why our own product portfolio is focused on proprietary varieties — and we are driving awareness of Sun World as the brand that can be trusted for a consistently great taste experience across all three colors of grapes.”
The Retail Perspective
Victor Savanello, senior director of produce and floral, for Allegiance Retail Services LLC, based in Iselin, NJ, says at his retail stores, he doesn’t see a lot of difference from one variety of either red or green grapes as it moves through the California season, but it does sell slightly more red.
“My customers definitely look forward to our later season — Sunlight International, Pretty Lady and Hobgoblin seasons,” he says. “The grapes Nick Dulcich at Sunlight sends us are as premium a program you can have; great berry size, great flavor, fantastic packaging and marketing to support them. They are a home run for us.”
Carrying multiple varieties successfully requires strong consumer education at the shelf, as well as the capability to offer specialty varieties at different price points, which can be challenging in a PLU environment.
“To meet the needs of consumer shopper segments we’ve identified, an ideal category mix would include an everyday value grape selection, a premium selection, organic and specialty varieties pulsed in and out of the category throughout the year to generate excitement and capture incremental dollar sales,” says Erlendson. “While consumption data doesn’t demonstrate color or varietal difference regionally in the United States, you do see differences in preferences internationally.”
Last year, new grape varieties such as Cotton Candy and Moon Drop grapes delivered category growth, representing 1 percent of total grape sales overall. Those numbers are expected to increase this year.
“What’s occurring right now in the global grape industry is unprecedented,” says Jim Pandol, owner of Selma, CA-based Jim Pandol & Co., a year-round supplier marketing grapes for major retailers and club stores throughout the United States. “There’s a revolution and evolution of new varieties being introduced to the grape industry, and there is still a lot to be determined.”
Pandol has seen more than 30 new varieties introduced in the last three to five years and says there are additional varieties being planted that have yet to be introduced. “Each of these provide something unique, or that’s the intent. It could be the timing of the crop, the size of the grapes, the flavor profile, the fruit’s ability to store for an extended period, or a combination of all of them,” says Pandol. “There’s a lot of feedback and consumer research we have not yet received to help us figure out which of these will succeed.”
“While consumption data doesn’t demonstrate color or varietal difference regionally in the United States, you do see differences in preferences internationally.”
— Natalie Erlendson, Sun World International
United Fresh’s 2016 Fresh Facts on Retail report revealed that in a category dominated by familiar varieties such as Thompson Seedless and Crimson Grapes, newer entrants such as Cotton Candy, Moon Drop and Muscat are creating excitement in the industry.
“They are unique in shape, color, size, and most importantly, taste,” says CFFA’s Brux. “These new varieties put some spark into grape merchandising, with retailers often building a huge display of the better-known varieties with a niche variety as the centerpiece. Every retailer wants to offer something new and compelling to shoppers, and these new varieties offer them that opportunity. It takes years to introduce a new variety in the marketplace, so when you see something land in your local produce department, you can bet it’s good.”
Allegiance Retail’s Savanello has noticed a rise in customers asking for these varieties and he expects Allegiance to up its order on these in the summer.
“Flavor is the most important component of marketing grapes, and we are focusing on varieties that deliver both flavor and eating experience to the consumer,” says Megan Schulz, marketing and communications manager for Giumarra, Los Angeles. “Our newest early red seedless variety, Passion Fire, has exceptional eating quality with high sugar. It has very large, crisp berries and excellent cherry color.”
Another grape that’s expected to do well for the company is Summer Royal, an early season black seedless grape that has a unique sweet flavor with a hint of Concord. With juicy flesh and tender skin, the variety is available throughout May and the beginning of June.
Columbine Vineyards has seen strong demand for varieties such as Holiday, Flame, Crimson and Milano, in addition to some of the newer grapes on the market. “The bulk of the consumers have personal preferences for one color more than the others, but think of them as either white, red or black,” says Andrew. “But in the past three to five years, consumers are beginning to demand grapes by variety specific.”
While most agree it’s ideal to have a premium demanded grape variety in all three colors throughout the season, it is difficult to accomplish for any one shipper — though it’s coming closer to reality each year.
Jeff Cardinale, vice president of communications for the California Table Grape Commission, Fresno, CA, says the upcoming summer season is prime time for California grapes, and retailers across the country are moving more because of simple merchandising best practices.
“To obtain optimum sales results, retailers should target an average of at least 25 square feet of space devoted to grapes from May through August,” he says. “Space allocation of more than 25 feet can generate up to 63 percent more dollars per store, per year than sets under 18 feet.”
The California Table Grape Commission recommends bagged grapes be gently stacked no more than three layers high. “Two-pound clamshells can be stacked up to four layers high, and 4-pound clamshells in original shipper boxes can be stacked up to six layers high,” says Cardinale. “These stack height recommendations will assist in decreasing shatter and breakdown of the grapes.”
Summer holidays, including Memorial Day, Fourth of July and Labor Day, as well as graduation, picnics and BBQ themes, are the perfect time for retailers to get creative with their displays for California grapes to draw consumer attention and increase sales.
“Build creative displays that grab the attention of consumers; this includes overhead signage, balloons, etc.,” says Cardinale. The Commission offers price cards and danglers to retailers to decorate displays.
The Commission also recommends removing any poor-quality, tired and non-appealing grapes from the display; utilizing proper country of origin signage, as well as variety and price information; expanding display space for grapes with large, abundant displays that are frequently refreshed and generate increased sales; and creating multiple or secondary displays to drive additional sales and highlight unique varieties or showcase premium grapes, value grapes or organic grapes, etc.
“In addition to the stand-alone snacking angle, grapes can be cross-merchandised with a variety of pairings,” says Cardinale. “For example, grapes with bread and peanut butter for a quick sandwich, bagged salads and salad ingredients to add a juicy burst of flavor, cheese and wine for an instant party or with small individual containers and bags to make them even more portable.”
“Research shows promoting grapes from California three to five times per month can increase sales by 30 to 57 percent.”
— Cindy Plummer, California Table Grape Commission
Lauren McNinch, sales support lead for Columbine Vineyards, says each display size depends on the individual retailer and the produce department layout. “We are always willing to work with retailers to optimize their grape display in the produce department through additional displays and point-of-purchase materials,” she says. “Grapes, for the most part, are merchandised together, but we have worked with retailers to cross-merchandise our Columbine Vineyards grapes with other products in the produce department to allow consumers to be creative and make fun, fresh and delicious recipes using our CoVi grapes.”
As an impulse buy, appealing displays can influence grape purchases. Sun World’s Erlendson says this means carrying good quality, avoiding stacking any higher than two bags, and rotating and culling displays is important. However, she notes retailers can also catch shoppers’ attention with creative displays and signage, which consumers report being influenced by.
When it comes to maximizing grape sales, promotion is key.
“How often you promote and where the ad is placed has a big impact on California grape sales,” says Cindy Plummer, the California Table Grape Commission’s vice president of domestic marketing. “Research shows promoting grapes from California three to five times per month can increase sales by 30 to 57 percent. And when it comes to ad placement, front page ads create the greatest impact on the category, followed by front page ads coupled with in-store price reductions.”
Industry data also shows promotions of two or three varieties produces more volume impact in the category. “It is a standard best practice to offer all three colors of California grapes — red, green, black — and offer organic grapes to appeal to most of your customers,” says Plummer.
The optimal number of varieties a store will carry and market depends on its customer base and what sells and what doesn’t.
“We carry a red, green and black seedless, and a Red Globe seeded variety every day, then complement them with specialty items like the Cotton Candy, an Italia when available and an Eastern Concord when in season,” says Allegiance Retail’s Savanello. “I don’t see any merchandising advantages from one season to another; the only difference is the price point you can reach with the summer grapes, and how much of a larger display you would build to support the demand they then command.”
Savanello says grape display size will vary greatly depending on retail, not as much by season. “While you will likely reach more competitive retails during your summer California grape season, it’s all about the retail for us,” he says. “We will create secondary displays, often using high-graphic dump bins supplied by our suppliers, during the summer season. We will also always create a secondary merchandising location — up in front of the department — during promotional weeks. But we will always maintain our primary location in the department as well.”
There are more than 85 varieties of California table grapes, giving buyers plenty of options in color and in seeded and seedless. Each variety has its own characteristics of taste, color, texture, size, etc., and providing all three grape colors gives shoppers more purchasing options.
“California grapes are a good pick for today’s diverse shopper. All income levels, ethnicities and ages report buying grapes during the California grape season on a regular basis, regardless of economic climate,” says Plummer.
Pandol & Co.’s Pandol says he services retailers who say the best strategy is to merchandise by color, while others are on the other end of the spectrum, and are carrying 15 to 18 varieties and identify them at the store level when merchandising them. “The challenge is to identify the best opportunity for their customers,” he says. “A lot of it is personal taste.”
Packaging The Grapes
In addition to the different varieties and tastes, grapes also come in a few different package types. Approximately 83 percent of California grapes sold in the United States are sold in bags. Of these, 93 percent of them are in pouch bags and the rest in zip-type bags, slider bags and non-sealable bags, while 15 percent are in clamshells.
“Bags and clamshells both have a place in the produce department,” says Plummer. “While there are some pouch bags sold as fixed weight, most bagged grapes are sold as random weight; clamshells are all sold as fixed weight. There will always be a need for fixed weight packaging, especially as produce items continue to be sold in stores without produce scales and in non-traditional food retailers.”
Columbine Vineyards’ Andrew says customers have different ideas of what packaging works best for their region/consumer and company focus as to price point or quality level. “Clamshells help protect the grapes better and sit neatly on the counter or refrigerator shelf, but they usually create sticker shock compared to random weight bagged grapes,” he says.
Although Savanello is not a fan of clamshell packaging for grapes, he does understand the opportunity that exists in certain varieties, especially organic. However, he likes the gusseted bags better. “Packaging has played a huge part in driving grape sales in my stores,” says Savanello. “Our program with Sunlight and the Pretty Lady gusseted bags has taken our grape sales to the next level. The gusseted bags allow for a fantastic merchandising presentation, both by allowing the bags to stand up and display the product more prominently, and then simply by the incredible graphics on the bags themselves.”