April 2023 - Insights to Action

Produce performance steadied in Q1 vs 2022 trends

  • Through the first twelve weeks of the year, the gap between produce dollars sales and volume growth narrowed
  • The last four weeks of Q1 saw volume down only (0.3%) vs. prior year
  • Inflation is easing and volume trends continue to improve in produce, but center store is still seeing lingering effects

Bar chart of YTD produce sales for 2023. 

Regional Performance YTD (12 weeks)1

  • The Southeast continued to lead the regional rankings, growing both dollar sales and volume.
  • California and the Northeast remained at the bottom of the rankings. It’s important to note that these two regions have also been the most negatively impacted by population shifts over the past 4 years.

Table showing produce percent change broken down by region. 

Top 10 Fruit and Vegetables $ (millions)1

  • Berries are poised for a solid summer selling season, but grapes are the top performing fruit thus far with +2.7% in dollars & +6.7% in volume.
  • Onions and Avocadoes (#11) were the top volume performing commodities with growth of 5.0% and 7.5% respectively.

Bar chart of produce performance. 

The Future of Foodservice (Restaurants)

Our new partner, Mintel, recently published a comprehensive report diving into the Future of Foodservice.

Group of chefs holding plates with their thumbs up. 

Key Takeaways and Recommended Strategies4

Attract diners with versatile menu options

Nearly half of US consumers reported they are interested in restaurants serving healthy foods. Operators are being challenged to help reinforce new habits around health and wellness while providing consumers with menu items and dishes that offer a balance between health, comfort, and permissible indulgence.

Consumers seek value in more ways than one

Consumers cite the presence of promotional offers as the leading reason to choose a restaurant. Operators can work toward providing value through enticing deals, but also look to offer experiences that consumers can justify encouraging away-from-home spending.

Keep up with the advancements in restaurant tech

Increased interest in restaurant technology in the forms of ordering, payment, and automation will help build long-term loyalty with customers. Ensuring these operations provide a seamless customer experience will keep them returning for more. 

The Category Outlook

  • Currently, consumers are still eating more at home, but restaurant traffic growth is promising
  • Restaurants continue lean into ways to create synergies/cost savings that will allow them to provide more value

Flow chart showing now (2022) - Inflationary pressures continue to impact spending behavior. Next (2023-2024) - Consumers want convenience and value. Future (2025-2027) - Segment's lines continue to blur. 

A Price to Pay1

  • Inflation has softened as expected with total produce trending at 3.1% thru 12 weeks. Fruits came in below PY at (0.2%), while vegetables came in higher at 6.5%.
  • The last 4 weeks of Q1 showed the lowest inflation rates in nearly two years with Produce at +0.6%
  • As margins are being compressed, Grocery retailers are promoting more frequently to drive volume
    • The last 4 weeks of Q1 showed an increase of 5Pts of volume sold on promotion
  • Base price leaders still have an advantage by gaining foot traffic during this time, but strategic promotional plans could help level the playing field

Table showing price per volume and percent change. 

What is Convenience? A Numerator study6

Convenience is NOT a universal metric, as it means different things to different shoppers.

  • Through the Pandemic, convenience was top of mind of many consumers. With inflation, price has taken priority.
  • However, 82% of shoppers still say convenience is extremely or very important.
  • When ranked alongside other shopping considerations, convenience comes in at #3, behind price and quality; this holds true across all generational segments.
  • Shoppers continue to find in-store shopping more convenient for certain items – especially in food.
  • Three-fourths of consumers said they think it’s more convenient to buy perishable or frozen grocery items in store.

Bar chart of category convenience in-store vs online. 

Cinco de Mayo

  • Cinco de Mayo has proven itself as an important sales occasion in Produce. Nationally, Fresh produce dollars grew an average of nearly 8% over the past three years during the Cinco de Mayo timeframe.5
  • Cinco de Mayo offers many cross-promotional opportunities; therefore, it is important to focus on the key ingredients that shoppers need for party snacks such as guacamole and salsa.
  • Many commodities are promoted heavily during this time frame, but some, like Peppers. Tomatoes, and onions, sell well with increased demand.
  • Tropical Fruit and berries are also highly promoted, as variety of these offerings would complement the celebration.

Table showing commodities to watch and their percent change in the last 3 years. 

A Day of Remembrance, Celebration, and the Start of Grilling Season

Memorial Day has become a kickoff to the summer selling season

Table showing top selling produce during Memorial Day Weekend. 

  1. IRI Integrated Fresh, Total US, MULO, Calendar Year 2023 Ending 3.26.23
  2. IRI Integrated Fresh, Total US, MULO, (Historical).
  3. IRI top Trends in Fresh, RE-FRESH for 2023 and Beyond 2.2023
  4. The Future of Foodservice 2023, Mintel Reports US, 2022
  5. IRI Integrated Fresh, Total US, MULO, 2 Weeks to include pre-holiday)- Cinco De Mayo & Memorial Day
  6. Mythbusters: What is Convenience? Numerator, March 2023