Fresh foods continue to drive in-store sales, report notes
- Fresh foods are driving 49% of dollar growth across fast-moving consumer goods categories at retail, according to a report from Nielsen. In all, fresh and perishable foods account for $177 billion in sales.
- Although e-commerce sales continue to grow, Nielsen says companies looking for immediate growth opportunities shouldn’t ignore the perimeter of their stores, noting fresh and perishable foods generated sales nearly 14 times as high as all online food and beverage sales this year. The report suggests supermarkets looking to grow their fresh sales should look beyond a category-specific approach and take a more holistic view that leverages opportunities across the produce, bakery, deli and meat departments.
- Although Americans cite eating more fruits and vegetables as the top factor for healthy eating, they're not flocking to on-the-go fresh produce offerings as much as they are to other snack options, Nielsen further reports. Sales of on-the-go fresh produce, or pre-cut produce that has been portioned intentionally for snacking purpose, declined by nearly 2% in dollars and 6% in unit volume over the last year.
As Nielsen has noted in past reports, retailers can’t afford to ignore consumer demands for fresh foods, including sales of meal kits or ready-prepared meals. Surveys show shoppers head to grocery stores up to three times a week, driving the success in fresh food items and making the deficiencies of center store aisles all the more glaring.
But that doesn’t mean consumers aren’t interested in dry goods or frozen foods. As Nielsen suggests, grocers would do well to look at the stores as a whole, and could, for example place soda or bottled water displays near the deli section, suggest freshly-prepared salads from the deli to pair with seafood or place spreads made in-store near fresh bakery selections.
Since convenience is almost as important as freshness for today’s consumer, supermarkets can consider ways to make buying fresh foods easy. Wegmans, for example, is launching a new 146,500-square-foot store, located in the upscale Natick Mall in Massachusetts, in a two-story space with three restaurants and a second floor dedicated to fresh selections, with bulk items on the lower level. This allows hurried shoppers to quickly locate and purchase fresh foods if they prefer.
But the Nielsen reports notes that not every new idea in fresh foods is bound to take off. Fresh fruits and vegetables, cut and packaged in snack-sizes, are dropping in popularity, suggesting that perhaps consumers either don’t like the extra packaging or don’t see the value of paying more for bite-sized fresh food portions. Grocers must pay attention to these trends and adjust as necessary.
"Fresh" remains an advantage for physical stores, but that could change as online grocers develop new ways to help buyers “see and feel” perishables before purchasing online. Earlier this year, Walmart filed a patent on a system that would allow customers see the produce and other fresh items they're ordering in 3D. According to CB Insights, the images would create what the patent calls a "Fresh Online Experience." Customers then would be able to accept or reject items. Other grocers and providers, such as Instacart and Shipt, have also improved their logistics and handling and are taking care to train employees on how to best select and handle produce. Managers at FreshDirect, the pure-play grocer that delivers in several Northeastern states and the Washington, D.C., area, rate their produce every morning on a scale of one to five stars, giving shoppers a supposedly no-frills look at the freshness of their strawberries, cherries and heads of broccoli.
Online, offline and across categories, perishables will continue to drive sales, and retailers need to be ready to capitalize on all fronts.