Dive Brief:
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Produce sales declined 1.6% during the first quarter of 2017, compared to the first three months of last year, according to a report from the United Fresh Produce Association.
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While eight of the 10 vegetable categories struggled despite lower prices, sales of packaged salads surged by 5.6% to $4,424 per store each week. Among the declines, tomato sales slipped 9.1%, peppers were down 7.6% and onions declined 6.9%.
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Organic produce sales remained strong during the first quarter with sales rising 6.9% to $1.19 billion.
Dive Insight:
It may seem surprising with consumers demanding more on fresh foods at the expense of processed items that produce sales would be down, but there is evidence that the public is still having trouble eating their fruits and vegetables. While 22% of in-home dinners included a salad in 1984, that number has dropped to 16% today, according to The Journal. It also noted fewer than one in four meals included vegetables. It's not surprising that a 2016 study from the U.S. Agriculture Department conducted concluded Americans still are not consuming as many fruits and vegetables as they should.
On the other hand, a decline in produce sales could also be due to the increasing prevalence and popularity of meal kits that posted $80.6 million in sales in 2016 from Blue Apron, HelloFresh and larger grocers such as Kroger and Publix. The convenience of a freshly prepared meal-in-a-box falls more in line with consumer trends, and may prove easier for busy shoppers than buying and assembling their own vegetables or fruit from the store.
Despite major vegetable category struggles in sales, packaged salads were strong. The pre-washed, pre-chopped lettuce, vegetables and other salad fixings all in one place provide customers with savings in time and energy that correlate with their willingness to pay for packaged salads rather than buying the individual ingredients and assembling the desired dish themselves.
With consumers desiring healthy and more natural products as they move away from processed foods, it is not surprising that organic produce sales remain strong. Among the top 10 organic commodities, packaged salads and berries ranked first and second — again emphasizing the importance of convenience to consumers.
Despite a decrease in produce sales early in 2017, it will be interesting to see if growth resumes by the end of the year due to rising consumer demand for healthy foods and expansion of produce sections at Walmart, Kroger and many other retailers.