- As consumers demand sometimes competing benefits like freshness and convenience, the market for value-added produce has grown significantly, according to Nielsen data.
- From 2011 to 2015, value-added vegetables recorded a 15% CAGR, and value-added fruit saw a 12% CAGR.
- Manufacturers also face competition in this segment from retailers. Grocery stores are increasingly employing vegetable butchers, who can chop consumers' vegetables for them while they shop the rest of the store.
As with many fast-growing food segments, value-added fruits and vegetables deliver convenience while enabling consumers to eat more fresh foods, which they deem part of a healthy diet. Value-added produce, such as pre-chopped vegetables or ready-to-cook side dishes, can make meal preparation more convenient. It can also serve as a healthy snack for on-the-go consumers.
While the category is fast-growing, it is still relatively small. Consumers primarily buy only some certain value-added produce items, such as chopped kale, peeled carrots and ready-to-cook squash, according to a recent produce report from the Food Marketing Institute. FMI also found that dollar sales were increasing faster than volume in this segment.
Value-added produce could be cost-prohibitive for certain consumers. Here, manufacturers can step in with marketing campaigns to remind consumers of the value they're paying for and why that value — the convenience and savings of time and effort — matches the price.
When it comes to retailers, manufacturers may have still one more hurdle to overcome. While manufacturers' packaged sliced carrots are fresh and sold in the produce section of the store, they may still carry a perception of being processed. A recent study found that consumers perceive more processed foods to be less healthy.
That's especially when value-added produce from manufacturers are compared to a retailer that offers a vegetable butcher who chops the fresh vegetables on-site while the consumer is still in the store. The freshly-cut produce option may lend an increased perception of freshness to the retailer's offering over a manufacturer's bagged sliced carrots.