Originally printed in the March 2018 issue of Produce Business.
Fast product turns propel category to top sales spot.
There was a time, not long ago, when eating salads in cold weather was unusual and buying lettuces in whole heads the only option. Now, packaged salads rank as the top-selling vegetable category at retail and organic packaged salads the No. 1 organic produce commodity sold year-round, according to FreshFacts on Retail, Whole and Fresh Cut Produce Trends: 2016 Year In Review, published by the Washington, DC-headquartered United Fresh Produce Association.
In 2017, organic packaged salads alone totaled a healthy $1.24 billion in sales, according to IRI data for the 52 weeks ending December 3, 2017, as supplied by Windermere, FL-headquartered Fresh Express. Blends, meaning products that contain a mix of lettuces or greens, make up 93 percent of organic packaged salad sales.
“We carry an average of 10 SKUs of organic salads, including blends, in two brands and they turn fast,” says Richard Stiles, director of produce and floral for Redner’s Markets, a Reading, PA-chain with 44 markets and 13 quick shoppes in Pennsylvania, Maryland and Delaware.
However, despite its popularity, organic’s share of total packaged salad sales has remained stable at just more than 23 percent over the past few years. What’s more, organic salad sales were actually flat in 2017, according to the December 2017-ending IRI data.
The trailing off of organic salad blend sales over the past four years is attributed to a few reasons, explains Michael Golderman, marketing brand leader for Fresh Express. “First, I think the early adapters are already in, and it’s tougher to get more people in the category. Secondly, during this same time frame the local movement has built up steam, and this may represent people who would have chosen organic. Third, there is a movement toward greenhouse-grown products, which are often viewed positively. Fourth, there’s been no significant innovation.
“Indeed, there’s a need for new and exciting products to attract new users to the category or to have current customers purchase more.”
Demand has led to innovation in the organic salad blends category. This includes choice of greens, versatility of use and convenience.
“Spring mix is no longer the No. 1 SKU for us, as it was in years past,” says Scot Olson, vice president of produce and floral for Grocery Outlet, Inc., a privately owned discount supermarket chain based in Emeryville, CA, with more than 280 locations in five western states and Pennsylvania. “Our best-selling organic salad item is now baby spinach, followed by arugula. Spring mix is a distant third.”
Nationally, baby spinach ranks first and represents 35 percent of organic packaged salad sales, followed by spring mix at 25 percent and 50/50 mix (baby spinach and spring mix) at 15 percent, according to the December IRI data.
Shoppers now seek even darker greens, says Bil Goldfield, director of corporate communications for the Dole Food Company in Westlake Village, CA. “Our organic salad mixes fulfill consumers’ desire for health and wellness by providing darker, more nutrient dense greens like kale, along with favorite varieties of baby lettuces, spinach and arugula.”
Megan Ichimoto, marketing supervisor for San Miguel Produce in Oxnard, CA, agrees. “Salad greens no longer just mean lettuce, spring mix, or arugula. Heartier and more flavorful greens like kale, rainbow chard and beet greens are making their way into consumers salads.”
The company recently revamped its entire organic line of dark, leafy greens, including moving to a smaller pack size that helps lessen waste as American households size shrinks.
Beyond lettuces, products such as the Organic Super Blend introduced by the Salinas, CA-headquartered Mann Packing Co., last year incorporate a variety of vegetables and offer versatility, another demand shoppers are seeking.
“This product is loaded with crunchy veggies including kale, colored carrots, green cabbage and broccoli, offering an appealing mix of flavors and textures,” says Jacob Shafer, senior marketing and communications specialist. “It can be served on its own or incorporated into dishes like salads, smoothies and other parts of the meal.”
Basic blends represent the largest (86 percent) of three categories in Grocery Outlet stores’ organic salad line. Eight varieties of 5-ounce clamshell blends are the major component at 65 percent of the chain’s organic salad sales, says Olson. Three varieties of 1-pound clamshell-packed blends, which are duplicates of some of the 5-ouncers only at a better value, are the second top seller and account for 20 percent of the retailer’s organic salad sales. The other two categories are kits and grab-and-go or single serve.
“Kits are 8 percent of organic salad category sales. These are new to the category; we’ve only had these for the past six months. Currently, we have four SKUs of kits, and not all stores carry these. Grab-and-go purchases represent 7 percent of category sales. I think kits and grab-and-go will be the fastest growing segment for us as we continue through this year. Our stores and customers still are discovering these newer-to-the-market items,” says Olson.
Nationally, organic salad kits make up only 1.4 percent of the packaged salad category. This is a small, but rapidly growing segment of organics with a 76-percent growth rate versus a year ago, according to December IRI data. Often, salad blends are the foundation of the new organic kits. This is where product innovation is occurring most recently and fits consumers’ need for convenience.
For example, based on the success of its first two organic salad kits, Caesar and Apple Dijon, Dole introduced earlier this year two additional, uniquely paired flavor combinations: Sweet Citrus and Savory Balsamic.
“These kits deliver a fresh, flavorful organic salad, including nutritious baby lettuces, signature dressings and restaurant-inspired toppings in a convenient package that tastes great and is easy to prepare,” says Goldfield.
Chopped salads have been on-trend since 2013 when New York Times food writer William Grimes declared ‘Chopped Salad Has Become the Lunch of Choice in the Northeast.’ Product innovation in the subcategory of organic chopped salad kits is booming. Examples include Salinas, CA-based Taylor Farms’ 2016-introduced Toasted Sesame, Sriracha Ranch and Asian Ginger, each of which includes a blend of lettuces and veggies such as Romaine, green cabbage, radicchio, carrots, celery and green onions.
Last year, Fresh Express launched its newest trio: Sunflower Ranch, Balsamic Vinaigrette, and Asian Sesame. Each of these contains a blend of green cabbage, Romaine and radicchio; the Balsamic Vinaigrette also has kale. The newest of these types of products are two-line extensions by San Juan Bautista, CA-based Earthbound Farm: Sweet Kale and Caesar.
In the future, “It’s possible we may see more salad blends that incorporate vegetables, either shredded or crumbled as these vegetables offer a unique texture and crunch that boosts the consumer’s overall salad experience,” says Nathalie Fontanilla, vice president of research, development and innovation for Earthbound Farm. “Also, meal kits are a real opportunity. Salads can be the base of a great meal providing real, fresh ingredients that can be assembled into a satisfying meal very quickly.”
The packaged salad category is a crowded one. To make sure customers find newer products, such as the latest styles of organic blends and kits, it’s important to know who the customer is, make new products visible, encourage trial and promote often.
“To appeal to Millennial shoppers, retailers should place emphasis on the quality and freshness of their organic produce, and place organic prominently within the produce section.”
– Bill Goldfield, Dole Food Company
Know Your Customer: “Millennials are the fastest-growing demographic for produce sales, and that’s especially true for organic produce. Knowing the shopping habits of these consumers, particularly the way they navigate the supermarket and their product preferences, will be key to maximizing sales of organic salad blends and other produce in the future. To appeal to Millennial shoppers, retailers should place emphasis on the quality and freshness of their organic produce, and place organic prominently within the produce section. Ultimately, organic buyers link their fruit and vegetable consumption with an overall increased sense of health, wellness and convenience, so the produce department display needs to reflect this thinking,” says Dole’s Goldfield.
Reaching Millennials on platforms they frequent is important in delivering messages to them, says San Miguel’s Ichimoto. “From social media to blogs, consumers are continuing to search for new products and ideas to improve their healthy lifestyle.”
Make New Products Visible: The salad/greens set can really be a sea of sameness, with clear plastic packaging filled with greens, says Jessica Harris, Earthbound Farm’s trade marketing manager. “Everything looks so similar; therefore, the key is finding a way to highlight or elevate it in the set.”
Organics get their own 4-foot refrigerated set at many Grocery Outlet stores, according to Olson. “Salads take up most of this space. We utilize space grids to display 5-ounce clamshells of blends, kits, and grab-and-go varieties, then we also display 1-pound clamshell blends in the well of the case. In addition, we also like to promote in the front of the store with our refrigerated ‘Spot Boxes.’ We typically reserve this for ad activity or in store promotions when we are really trying to push organic sales.”
Cross merchandising is good way to make new products stand out.
“If the store has refrigerated end caps, this provides the best opportunity for cross merchandising,” says Earthbound Farm’s Harris. “Here you can add toppings, dressings and even proteins to give shoppers a one-stop shop for a great salad. Another great cross-promotion opportunity is the vegetable butcher approach that is being implemented in some stores. This is a person who knows and understands the category and is basically meal prepping a main or side with vegetables. If we can use this person to talk about what organic greens work with their veggies or how to build a better salad, it’s a win-win for everyone.”
“If the store has refrigerated end caps, this provides the best opportunity for cross merchandising,” says Earthbound Farm’s Harris. “Here you can add toppings, dressings and even proteins to give shoppers a one-stop shop for a great salad.”
– Jessica Harris, Earthbound Farms
Encourage Trial. Providing new, innovative organic salad blends can keep existing consumers enthused about buying these products. In addition, blends are a way for consumers to try new or unfamiliar greens. Education on these veggies is key for getting new demographics to enter the category, according to Ichimoto. “Consumers can be hesitant to try new items for fear of wasting money on an item they end up not liking and throwing away. In-store sampling puts the product directly in front of consumers and helps them make an informed buying decision. Simple cooking tips and recipes can demonstrate to consumers that these greens can easily be incorporated into daily diets.”
Earthbound’s Fontanilla says, “The opportunity lies in increasing the buy rate by inspiring shoppers to use the products in different ways: recipes, smoothies, juicing, etc. Since these products are so perishable, they can spark a number of store trips each week.”
Promote. Organic blends are promoted at least once a month on a year-round basis at Redner’s Markets, says Stiles. “What helps sales of these products is they can usually be retailed for less than $5. When on ad, we’ll drop the retail to 2 for $5 or $2.98 each. At this price, there is a fair amount of trial from those who usually buy conventional. This brings new shoppers to the category.”
Most consumers are willing to trade up to organic if the price gap is small enough. As a result, salads have the highest organic penetration of any produce category, according to Earthbound Farm’s Harris. “The most success we have is when we provide inspiration and targeted offers. Shoppers are always looking for new ways to use the greens they have. We have found success with loyalty promotions, (e.g. buy 5, get the 6th one free) and tracking that through a retailer’s loyalty card. From there, we can target market the shopper and serve up more relevant coupon offers. When launching products, we always use an on-pack coupon to bring attention to the item in the set. It also helps reward shoppers for driving something new.”