December, 2022 – Insights to Action

Shopper behavior continues to change as inflation pressures linger

  • Through forty-eight weeks of the year, inflationary pressures continue to have an adverse effect on produce demand.
  • Produce dollars have grown 4.8% to $70B, while volume is down (3.8%). In Q4, the volume losses have softened somewhat (2.0%) versus the prior year.1
 

The two largest regions in produce dollar sales are on opposite sides of the performance rankings. The Southeast continues to lead the way at +7.2% versus 2021, while the Northeast continues to lag U.S. trends with only 2.6% growth.1

Map of regional performance YTD thru 48 weeks. 
  • Berries continue to lead ranking with a notable dollar growth rate of 5.5% and volume growth of 4.0%. At-home meal mainstays, such as potatoes and onions, are seeing significant growth.1
  • Inflation impact can be seen in premium item salad kits, showing minimal dollar growth with significant volume losses of (7.0%).
Bar graph of top ten fruit and vegetables in dollars. 

Emerging Channel Spotlight – Controlled Environment Agriculture

Insight provided by Molly Tabron, Director of Supply, Robinson Fresh

  • Controlled Environment Agriculture (CEA) is an innovative, technology-based farming method that is an alternative to traditional field-grown agriculture. While the methods vary, CEA allows for much greater control of the resources and climate surrounding a crop, creating optimal growing conditions and a more consistent yield.
  • Over the last five years, the annual investment in CEA has grown 250%.
  • Leafy greens, microgreens, herbs, tomatoes, peppers, and cucumbers are the primary crops grown via CEA today; but nearly 1/3 of growers are considering new crops in the next 12 months, with berries and mushrooms topping the list.

    • Hand holding a plant.

    The Benefits and Methods of Cultivation6

    Top cultivation methods. 

    The Future of CEA Production

    There is a future in both traditional and indoor farming. With the amount of funding that’s been invested in the CEA space, there is likely to be consolidations, as some production methods prove more feasible than others. While various crops can be produced indoor, not everything will be as efficient. The industry must still produce products of consumer preference, in quantities and in concert with the portfolio of products that make sense for retailers, restaurants, and wholesalers alike. This space will see continued rapid expansion in technology, robotics, and research and development.

    Robinson Fresh Can Help

    What does the CEA industry need from buyers?

    • Requirement of sustainability metric tracking, so production methods can be easily compared
    • Market the values of CEA to consumers, so shoppers understand why they would choose the product
    • Longer-term commitments on product off-take

    What do buyers need from the CEA industry?

    • More transparency to sustainability metrics
    • Improved economics, bringing the cost of production more in line with field grown
    • Greater diversity of products grown, aligning with consumer demand and supply chain optimization
    Headshot of woman. 

    A Price to Pay

    • Through forty-eight weeks, produce price per pound has increased by 9.0%, with trends improving from last four weeks due to laps. Fruit price eased to a +3.0% increase during the last four weeks, while vegetables came in at 5.4%.
    • Consumers continue to change shopping habits due to inflation, gravitating to base price leader channels and looking for more promotional activity.
    Price per volume, percentage change vs 2021, and percentage change vs 2020. 

    Perimeter Inflation Rates Moderate… partly due to laps from 2H of 2021

    Center store sales and perimeter of sales. 

    Dial-A-Truck Refrigerated Load to Truck Ratio

    • Currently, the ratio metrics are still significantly lower than where the market began the year and continue to be below last year’s ratios, dropping well below 2020 levels since August.
    • Current fuel rates are $4.97 per gallon in November; which is only slightly higher than October, but still 41% higher than November 2021.3

    Calc - Divide the number of load posts by the number of truck posts on DAT load boards, and that’s the load-to-truck ratio. When there are a lot of load posts, or there are very few truck posts—or both—the load-to-truck ratio goes up. If there aren’t many loads, or there are a lot of trucks available, the ratio goes down.

    Reefer load to truck ratio. 

    Consumers are interested in learning more about eating healthy

    Healthy for You Survey5

    Robinson Fresh 2022

    A Renewed Focus on Health

    Since the global pandemic, shoppers have become even more focused on ways to eat healthier. They are looking to their retailers to partner in this journey. Consumers are actively seeking information on health and nutrition. This study shows there is room for grocers to improve in-store and online communication.

    These finding were discovered as Robinson Fresh conducted a consumer survey in May 2022. Here are just a few of the findings that highlight the key areas where retailers may be able to improve the shopper experience in their stores.

    Grocery store employee showing woman a vegetable.

    Percentages of opportunities for retailers to engaged shoppers more often with a wellness focus.

    1. IRI Integrated Fresh, Total US, MULO, Building Calendar Year 2022 Ending 12.4.22
    2. IRI Integrated Fresh, Total US, MULO, (Historical).
    3. DAT Trucking Industry Trends: Reefer, Data Trendlines 2022.
    4. IRI November Inflation Tracker thru November
    5. Healthy for You Survey- Robinson Fresh, May 2022
    6. 2021 Global CEA Census Report.pdf (farmroad.io)
    7. The Influx of CEA Investment: Where Has the Money Gone? — AGRITECTURE