Produce performance continued to stabilize early in 2023
- Through the first eight weeks of the year, the gap between produce dollar sales and volume growth narrowed.
- Inflation eased and volume trends continued to improve, which was a welcome change compared to the last 18 months.
- Center store inflationary pressure impacted total edible.
Regional Performance YTD (8 weeks)1
- YTD, Southeast continued to lead the regional rankings, growing both dollar sales and volume.
- California and the Northeast remained at the bottom of the rankings, though it’s important to note that these two regions were also the most negatively impacted by population shift over the past 4 years.
Top 10 fruit and vegetables in USD (millions)
- Berries recovered nicely from a slow start, but grapes provided the most balanced growth with +5.4% in dollars and +6.6% in volume.
- Lettuce and onions were the only other commodities in the top 10 that also grew volume.
A price to pay1
- Inflation softened as expected with total produce coming in at 4.3% through 8 weeks. Fruits came in at a low 0.6%, while vegetables came in higher at 8.0%. The last 4 weeks showed the lowest inflation rates in almost two years.
- As inflation eases, volume will be a focus. Base price leaders have an advantage, so hi-lo retailers must engage shoppers more via promotional activity and loyalty programs to prevent leakage into other channels.
As inflation eases on perimeter, center store continues to put pressure on consumers3
Perimeter sees price inflation fall as it laps pricing taken in 2021, while center of store and non-edible has not yet seen inflation begin to come down.
Volume recovery and retailer loyalty could hinge on effective promotional strategies
- An uptick in promotions in 2023 is expected
- With recent demand influenced by consumer at home eating, volume will still be below pre-pandemic rates.
What you need to know about peak melon season: a produce supply chain perspective*
EAST
- Florida has seen optimal growing conditions this season.
- Melon production out of South Florida is expected to start earlier than the previous years –look for seedless watermelons starting in mid-March and higher volume in April –presenting plenty of promotion opportunities.
- Central and North Florida have received the same optimal weather and are expected to start early, potentially setting the stage for a successful Memorial Day.
- 2022 saw a significant gap between the southern growing regions and the northern growing regions due to historic weather events –closing this gap in 2023 could bring more supply in August.
- Mini watermelons are making a resurgence in demand, but supplies are expected to remain tight in 2023.
WEST
- Acreage on seedless watermelons in Northern Mexico for the April/May harvest window is significantly down year over year. Demand is expected to be strong during these months with limited supply.
- Cooler growing conditions in Northern Mexico this season are delaying harvest by 2-3 weeks. Look to plan accordingly. Late March/early April will be the tightest time frame for both seedless and mini watermelons.
- In 2023, Arizona will see a decrease in seedless and mini watermelon acres due to water restrictions. As this region usually supplies the July 4thholiday, anticipate this time will see good demand with less supply.
- Expect to see volume on Cantaloupes and Honeydews in early June out of Arizona, and in early July out of California. Both regions are reportedly flat-to-down on acres in 2023 due to water concerns, growing costs, and higher labor costs.
*Insights provided by Robinson Fresh supply team
Did you know?
Robinson Fresh is one of the few melon suppliers in the U.S. that has programs both east and west. Our goal is to ensure our customer base has reliable coverage in this growing category.
Robinson has an extensive, connected melon grower network.
- 53 unique growing programs in place for 2023
- Grow in 18 domestic states and 4 different regions in Mexico (Colima, Nayarit, Hermosillo, Yucatan)
- Approximately 10,750 acres marketing on behalf of our growers
- 550M lbs. of melons
- Approximately $24M in pre/post-harvest crop investment for 2023
- Contact your local sales rep for more information
*Note – Information and thoughts are based off today, which is subject to change due to weather and other uncontrolled situations – make sure you stay in contact with our melon team for the most up-to-date information.
In the news: The focus on health in grocery
- Fresh produce has always been known for its health benefits
- Post-pandemic, more consumers than ever have started to focus on healthy eating habits, often using digital research and shopping platforms
- Eating at home is often the healthier choice and grocery traffic is up
- FMI states, “The grocery store has evolved as a true destination for nutrition, health and well-being.”5
- Retailers have noticed these trends and have invested tech, programming, and messaging to meet consumer needs
Sources
- IRI Integrated Fresh, Total US, MULO, Calendar Year 2023 Ending 2.26.23
- IRI Integrated Fresh, Total US, MULO, (Historical).
- IRI top Trends in Fresh, RE-FRESH for 2023 and Beyond 2.2023
- IRI IN-STORE DISPLAY MERCHANDISING TRENDS IN THE GROCERY CHANNEL, 2.2023
- Progressive Grocer - Sprouts Famers Market CEO Details Top Grocery Trends 2023
- Albertson's Companies - Newsroom - Albertson's Companies Launches Sincerely Health and Wellness Platforms
- FMI - Blog - Top 5 Reasons the Grocery Store is a Destination for Health and Well-Being