A topic that seems to dominate conversations in merchandising meetings is one that debates the merits of the expansion of convenience-oriented, value-added processed produce items. Though an old debate, it has been renewed as new products are introduced by processors around the country.
Management tends to be on the side of “the more the better” when it comes to the utilization, promotion and displaying of these products. Produce has taken a somewhat different position. A smart produce retailer has to weigh the benefits in terms of consumer convenience versus the overall appeal of the department. Management doesn’t seem to grasp the distinction and once again proves that it just doesn’t get it.
The best utilization of value-added convenient produce items has been a concern of produce operators for quite some time. While there are many excellent attributes to these new products — ease of preparation and use, time-saving aspects for the customer and new items for customers to try — there are some aspects that are troubling. By their nature, these convenient items display easily on upright multi-shelf cases, increasing efficiency and use of space. However, “eye appeal” is one most often seen in the non-fresh areas of the store. While it still contains produce, it does not add to the perception for overall attractive ambience of traditional fresh produce. There is a delicate balance that needs to be struck between the benefits of this value-added product and the overall appeal to the consumer in the produce department.
The ease of display and efficient use of space represented by these convenience items also presents a challenge. By their nature, they require less space than fresh items. This puts increasing pressure on planning the space allocated to produce departments. In fact, some retailers who are rapidly expanding their convenience/value-added sections are decreasing the size of the overall produce presentation. A secondary part of this equation is the attractive aspect of the ability to price these products at a level that returns excellent margins.
“The innovative retailer will consider how to maintain the universal appeal of fresh, bulk produce while taking advantage of consumers’ desire for convenience items that save them time in terms of preparation and consumption.”
The consumer has no idea what the price should be, or even a range of pricing. This is certainly part of the relationship between the industry trends of increasing dollars, sales and declining volume sales. The ability to sell 8 ounces of value-added produce for $2.99 at a healthy margin is attractive to produce operators, given the pressure to deliver gross profit and satisfy management’s “grocery mentality.” For the forward-thinking retailer, this is a situation that requires attention to strike the proper balance to get the best of both worlds.
This age-old debate has been involved in the ebb and flow between packaged and bulk produce for sometime and is now becoming increasingly important for produce operations. The innovative retailer will consider how to maintain the universal appeal of fresh, bulk produce while taking advantage of consumers’ desire for convenience items that save them time in terms of preparation and consumption. It’s not an easy decision and will have long-term effects on the success and growth of the produce operation, as well as the size of the department and the consumer’s perception of the store. We must remember that the driving principle for differentiation of the store’s produce department was the abundance of fresh produce available in one location. In today’s technological world and the hectic pace of life, we must continue to utilize our best asset in terms of consumer appeal.
Across all generations, there is the universal appeal of a fresh produce display. We must be able to utilize these fresh commodities alongside convenient, value-added products to offer consumers what they need, while still maintaining the “fresh” perception of the produce department and the entire store. The retailers who strike this balance will reap the benefits.
Don Harris is a 41-year veteran of the produce industry, with most of that time spent in retail. He worked in every aspect of the industry, from “field-to-fork” in both the conventional and organic arenas. Harris is presently consulting and is director of produce for the Chicago-based food charity organization, Feeding America. Comments can be directed to [email protected].