Priced to Move

Priced to Move

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As U.S. grocers gear up for an ongoing slugfest rife with lingering deflation, cautious shoppers, precipitous promotional activity and cutthroat competition, several recent culinary trend forecasts offer retail produce- pushers plenty of prime possibilities to blunt the onslaught by serving as a key resource to help New Year’s resolutionseeking shoppers honour their nutritionally focused goals.

Among the most inspiring year-end wrapups that bode favourably for fresh produce sales are the results of a 2010 menu survey outlook by the Washington-based (NRA), which found sustainability, local sourcing and nutrition factoring heavily in the responses of nearly 2,000 (ACF) chef-members, who were asked to rate some 200 foods, beverages, culinary themes and preparation methods on a scale of "hot trend," "yesterday’s news" or "perennial favorites." Of the top 150 trends, nearly half of those ranking in the top 20 have direct relevance for food retailers, including locally grown produce, locally sourced meats and seafood, sustainability, mini desserts, and locally produced wine and beer. Nutritious kids’ meals, half-portions/smaller portions, farm-branded ingredients, gluten-free/food-allergy-conscious meals, and sustainable seafood rounded out the top 10 favorite trends of the Chefs. 
 
Fruit-and-veggie-rich menu trends, "superfruits," organic produce, nutrition, simplicity/ back-to-basics and regional ethnic cuisine also rated high among the other top 20 culinary trends, while environmentally friendly equipment and restaurants with gardens were also deemed among the hottest concepts top chefs will be seeking out this year.
 
Keeping Consumers ‘on the Wagon’
 
The overarching penchants for local sourcing, sustainability and nutrition "reflect wider societal trends and consumers’ growing awareness of, andinterest in, these issues," notes Dawn Sweeney, NRA’s president and CEO. And at the start of a hopeful new year, it stands to reason that the public’s fondness for the aforementioned issues is bound to intensify, notes Robert Van Liew, produce director for retailer-owned cooperative Associated Wholesalers, Inc. (AWI). "Consumer interest in eating healthier foods has grown each year, and is obviously especially strong after the holidays, when many people go off the wagon" and stray from their nutritional Commitments.
 
For that reason, the Robesonia, Pa.-based co-op – which serves in excess of 225 supermarket and convenience store member/customers from its distribution centres in Robesonia and York, Pa., and Carteret, N.J. – has repositioned two of its stores with guaranteed-low everyday produce prices by lowering produce prices by one-third across the board, explains Van Liew.
 
The gift of lower fresh fruit and vegetable prices – and the promise of a healthy New Year, to boot – is thus far in place at two AWI stores, a corporate full-line Nell’s Shurfine supermarket in Sinking Spring, Pa., and a limited-assortment SaveSmart Discount Foods in York, Pa. The Sinking Spring store offers 600 to 800 produce items, including organic, at any given time, while SaveSmart carries 80 conventional produce items, says Van Liew, who estimates that the stores’ produce prices are 30 percent to 40 percent lower than those of competitors in the marketplace, including for organics.
 
Produce Destinations
 
In effect since last November, the stores’ guaranteed low-price position has delivered discernible dividends, according to Van Liew. "Sales are up significantly at both stores," he says, noting that the strategy has the makings for potential expansion at AWI’s affiliate store family. "It’s a tough economy for retailers and consumers alike," observes Van Liew. "We are aiming to make these stores destinations by promoting affordable, healthy eating, and we’re doing that by offering the lowest-priced fruits and vegetables in town. It’s good for the health of our business and, more important, the health of our valued customers."  
 
Cognizant that the economic downturn has prevented many consumers from splurging on fresh produce purchases for fear that they’ll wind up tossing unused, pastits- prime fresh produce, Van Liew implemented the equal-opportunity lower-price strategy "across the board – as opposed to just half a dozen key items – to allow all products and categories to experience incremental growth."
 
Describing the initiative as a work in progress that’s in place for the foreseeable future, Van Liew envisions continued forward momentum for the two-store experiment, particularly in the realm of price considerations that potentially dampen prospects for purchasing nutritious, delicious fresh produce in grocery stores. "We’re really trying to remove any potential barriers for consumers to choose items that are deemed most effective for healthy eating, while also doing our part in the community to increase consumption of fresh fruits and vegetables. By passing along those savings to the consumer," he continues, "there’s no downside to purchasing plenty of fresh fruits and vegetables."
 
While readily admitting there’s an inherent trade-off with traditional produce operating profits that’s by and large been made up in volume, Van Liew says the experience has been highly enlightening. "Overall, the program has been very effective, and has also generated extra traffic throughout the whole store." 
 
A Shift to Smaller Packages
 
Alongside the healthy-eating inclination that annually informs consumer behaviour at the start of a new year, Van Liew expects that the parallel ongoing trend toward traditional comfort foods will continue to intensify as well, particularly during the full-on winter months, when the produce department’s welcoming reds, whites, oranges, yellows and greens remain the picture-perfect setting to court comfort-food-seeking Consumers.  
 
Buoyed by lifestyle changes and a growing awareness of cooking at home, often-unsung stalwart produce category leaders like mushrooms, potatoes, garlic, onions, broccoli, celery, carrots, leafy greens and, of course, citrus have all generated robust sales during the past year with no signs of a slowdown, notes Van Liew.
 
Ditto for fresh herbs, which Van Liew says "have really taken off" as a result of a switch to a single-use herb pack, which, he observes, represents "an excellent value proposition for consumers." While AWI has long carried value-added fresh herbs, "Consumers are really frowning on wasting food these days, and are often forced to discard fresh herbs they need for a single recipe that turn bad before they can use them."
 
Priced at the penultimate 99 cent-$1.49 price point, the singleuse fresh herb pack has been highly successful, according to Van Liew, as have single-use peeled garlic and fresh ginger, and a 4-ounce slicedmushroom package, "which we also merchandise with our single-use fresh herbs. The smaller packages of mushrooms have gone over really well and have turned into one of our best-selling mushroom SKUs. We are also seeing great success with a half-pint grape tomato item, which is doing real well for us."  
 
Along these lines, AWI’s supermarkets are also enjoying brisk sales of 3-pound bags of red potatoes for 99 cents to $1.49, which are promoted for roasting during the winter and grilling during the summer. "The smaller unit is ideal for the shopper who doesn’t want or need a 5- or 10-pound bag of potatoes that, again, go bad before consumers can use them."
 
The downside, of course, is that the smaller produce pack sizes are affecting dollar sales margins. "But from the standpoint of helping consumers buy and enjoy fresh produce, we’re willing to take the sacrifice to make that happen."