Doubling Down on Fresh to Maximize Profits

“The reality today is that traditional supermarket grocers are losing share in fresh foods at an alarming rate," said Jonna Parker, principal of fresh center of excellence at research firm Circana, and moderator of the panel discussion “Getting Fresh With Your Customer to Drive More In-Store Traffic,” at The NGA Show, Tuesday.

She said that consumers are instead flocking to mass retailers, independent grocers, and specialty stores for their produce and fresh foods.

National CPGs “can be bought pretty similarly at a mass retailer, traditional grocer, independents, and specialty stores, but the produce is very different all of these stores,” she said.

Parker was joined by Brian Framson, president of juice equipment company Citrus America; Dorn Wenninger, SVP of produce at UNFI; Matt Williams, chief sales officer of vertical farming company Bowery; and Dave Holloway, director of produce and floral at Busch's Fresh Food Market.

Panelists said that independent retailers have an opportunity to tune up their fresh departments and drive more value for their communities while maximizing profits. Parker said that retailers can do so by excelling in quality, relevance, experience, and convenience.

“Produce really sets the tone, not only for the produce experience but also for the [general] shopping experience every single time. Guests should be able to walk to any produce display, close their eyes, and grab a piece of produce and have it be something they could take home to their family,” said Holloway, emphasizing the need for high-quality fresh offerings.

“True freshness isn’t just how it is at the store, but how it is when the shopper gets home and cooks with it two days later,” he added.

Data from Circana shows that fresh vegetables' volume decline has improved since 2022, although it’s still sitting at a 0.6 percent deficit. On the fresh fruit side, on the other hand, it has grown 0.5 percent from 2022. 

But this doesn’t tell the whole story since within each category there are major performance differences. Wenninger noted that although cut vegetable sales are down from last year, premium vegetables, like asparagus, are up. Moreover, while packaged salad sales were down by 0.8 percent in the 52 weeks ending March 8, indoor farming produce purchases were up by 50 percent over the same period.

Framson advised not to overlook the power of produce to serve as an independent retailer’s differentiation point, offering high-quality, sustainable options that consumers can feel good about purchasing.

“In the end c-store is c-store, it can be found online or at other stores. For me, the perimeter is everything and can be a differentiator” for an independent retailer, said Framson. “Sixty percent of perimeter growth is driven by produce.”

The panelists remarked that consumers continue to be more health-conscious and concerned with sustainability and traceability. Fresh produce can help support these efforts because the two themes overlap perfectly, said Framson.

“Get fresh for your customers and they will love you for it,” he said.