Convenience and opportunities to try new items boosts fresh-cut sales.
Originally printed in the June 2023 issue of Produce Business.
Fresh-cut fruits and vegetables can mean a lot to a produce department if they represent top quality and reside in prominent displays, but they also can act as a bridge between new and unusual produce and curious, but wary, consumers.
At Seasons, Flushing, NY, an operation with five neighborhood supermarkets and two Express convenience stores, the store-produced range of fresh-cuts is a differentiating factor in the produce department.
“My fresh-cuts department is doing better than ever,” says Zeke Kreitner, chief produce officer.
There has been a big push in the industry, with high labor prices, to outsource some fresh-cuts to the wholesalers, but Keitner keeps everything in-house, so he has complete control of his fresh-cut fruit and particular standards for quality and freshness he maintains.
Marc Goldman, produce director at Bronx, NY-based Morton Williams, says fresh-cuts are critical to the produce departments he supervises in that most of his customers are busy people who have limited kitchen space, so fresh-cuts make sense.
“If I bring in 10 cases of pineapple, eight or nine of those cases are going to be cut,” he says.
Without fresh-cuts, pineapple sales wouldn’t be what they are at Morton Williams, nor would mango sales. Although they may be a little easier to prep, “a lot of people don’t like to cut them,” so sales are strongly supported by cut fruit.
The margin is nicer, too, and produce management at retail have expanded the opportunity. Produce departments once shied away from certain commodities, Goldman says, but they have pivoted on the fresh-cut opportunity.
“They didn’t want to bring stuff in and take a loss,” he says. “Now, they make more money cutting it up. You can increase the variety of product in your department, too, and the margin.”
The opportunity to use fresh-cuts to expand and introduce new products is significant. When Goldman started bringing in dragon fruit, which some consumers may see as hard to prep, he not only rolled out whole fruit, but also had cut product available. Among other things, he offered the lesser-known commodities in fruit cups so people could get acquainted with the new element mixed with other fruit that they already liked.
Morton Williams does all its fresh-cut fruit in house, although the overall section is rounded out by vendor-product extending to packaged salads. So, having convenience items together is still an important part of serving his time-starved customers, whether they are buying on impulse or putting tougher a preplanned quick meal.
SAVES SHOPPERS TIME
Indeed, fresh-cuts, once a luxury and impulse purchase, have become a meal replacement and a component consumers expect to find in stores.
“Fresh-cut vegetables should absolutely be considered a staple in every produce department,” says Crystal Chavez, marketing coordinator, Gold Coast Packing, Santa Maria, CA. “We are living in a fast-paced world. Consumers want everything quick and convenient. Having fresh produce that is washed, diced, cut and ready to be used simplifies meal times and helps consumers make wise choices when it comes to snacking and adding more fresh veggies to their diets. Consumers are willing to pay the higher price over bulk commodity products for pre-cut produce to save time and labor.”
“Anything that helps with convenience and cuts labor and saves time does well,” Chavez adds. “But items that are extremely tedious to prep tend to be the items that consumers will spend more on.”
Gold Coast’s 12-ounce pack size of value-added vegetables “are seeing growth and demand, as they are ready to be used straight out of the bag,” Chavez says. Current offerings include broccoli florets; cauliflower florets; a blend of both cauliflower and broccoli; a Garden Blend with broccoli florets, cauliflower florets and baby carrots; Brussels sprouts; and broccoli slaw.
As Del Monte Fresh sees it, cut fruit and vegetables are must-have products in grocery stores, and impulse purchasing remains a major element in sales, says Kirk Teske, vice president, product management and sales, Del Monte Fresh-Cut N.A., Coral Gables, FL. In that case, the better the presentation, the more in-store decisions will drive sales, so being visible in well-lit, cold cases is critical.
The market evolution over the past few years has seen more consumers gravitate to the use of fresh-cuts.
“Following the height of COVID-19, there has been a positive sentiment from consumers toward fresh-cut produce,” Teske says. “With consumers physically back in stores, sales have been solid. Specifically, we’ve seen increased demand and produce volume for Del Monte pineapples, mangos and watermelons.”
“Our whole and fresh-cut pineapple sales continue to be strong, as both products have applications consumers appreciate,” Teske says. “Like our pineapples, our whole and fresh-cut melons also perform well. Overall, quality and cold chain contribute to our increased fresh-cut sales.”
Fresh-cuts may be a must-have in produce departments, but presentations shouldn’t be left to get stale.
“Fresh-cut produce is an essential add to almost any store format,” says Kate Brooks, senior vice president of sales at Calavo, Santa Paula, CA. “The time-strapped consumer has come to rely on these products for access to fresh produce with ease of consumption.”
“While the usual suspects continue to carry our growth — melons, pineapple, mixed fruit — we’ve seen a couple of trends that follow the general trends within the food landscape,” Brooks says. “The increase in consumer curiosity and palate sophistication has led to a large uptick in mango consumption.
Additionally, we see that the consumer is looking for approachable exotic twists in this category, like the addition of coconut to some blends or a tajin spice packet paired with certain items.”
Although impulse sales remain critical, a distinction should be made between pure impulse and planned convenience purchases.
“Pineapple is a great example of a convenience buy,” Brooks says. “While the pandemic gave just about everyone the opportunity to learn anything in the kitchen they like, consumers learned that certain prep wasn’t necessary and that the additional cost of convenience was worth it.”
Mangos are another commodity that consumers consistently buy in the fresh-cut category, she adds. And Calavo’s category leader, watermelon, “is a commodity that is often just too large to buy whole versus fresh-cut. Many consumers, unless they are entertaining, won’t consume an entire melon, so our option allows them to enjoy it without the waste.”
TIME SAVINGS, LESS WASTE
Less waste means less guilt about food unconsumed and even leverages against the additional cost of fresh-cuts. But time savings still probably weighs more on consumers than other fresh-cut considerations.
“No one has more time than they used to,” Brooks says. “Consumers are busier than ever, and pre-cut veggies allow them to put fresh, nutritious meals on the table within the limited time. Fresh-cut vegetables, which are often meal components, are likely to represent planned convenience.”
“More and more customers have fresh-cut items, especially on the veg side, as part of their shopping list,” says Joe Granata, director of produce sales, FreshPro Food Distributors, West Caldwell, NJ. “It’s not as much an impulse item anymore.”
The combination of convenience and purchasing the amount of product that’s needed for a particular dish is especially attractive to many consumers.
“From what we’ve seen, diced onions and peppers are very popular amongst consumers,” Del Monte’s Teske says. “Nowadays, consumers are only buying produce in quantities they need. The meal solutions category continues to grow in popularity, even outside of the fruit space.”
BE BOLD IN MERCHANDISING
Fresh-cuts can benefit from aggressive merchandising as healthy in an easy way.
“I believe that fresh-cuts should be in the produce department, but also integrated throughout the grocery store,” Gold Coast Packing’s Chavez says. “Placed near the meat counter is a great location. This makes tying in produce with your entire meal even easier. If we placed a small refrigerated unit at the front of the store near the registers, those impulse buys would be much healthier. As grab-and-go in fresh-cut veg continues to grow, I hope that we will see these added to registers, meat departments and deli sections of the grocery store.”
Brooks also is an advocate of multiple displays through stores.
“The more places fresh-cut produce can be merchandised in the store, the better,” she says. “However, given it is a convenience purchase, it needs to be convenient to purchase. The easier it is for a consumer to run in and grab it, the greater the sales.”
In getting fresh-cuts out in the store, a proper position and effective fixture that maintains proper temperature and showcases the product are important, Teske says.
“When merchandising fresh-cut produce, we recommend placing well-lit, cold storage cases in high-traffic areas of our retailers,” he says. “Overall, we find consumers value quality over price point.”
Within the produce department, says Granata, it’s important that fresh-cuts displays are substantial and conspicuous.
“We find fresh-cuts displayed as its own entity within the department has the most impact on sales,” he says. “Late afternoon and weekends seems to be prime sales time for fresh-cuts, especially veggies,” he says. “Fruit, more so grab-and-go, is more of a morning and lunchtime prime sales time. Bulk fresh-cut fruit is big on weekends.”
Timing is important, says Brooks.
“Retailers absolutely need to be fully stocked in the morning to capture the consumers who are doing their big weekly shop early and those who are running in on the way to work,” she says.