The State of Fresh-Cut
The fresh-cut industry is continuing to grow, driven by a need for convenience.
Foodservice establishments are looking for creative, fresh dishes that can be prepared by a staff with little training. Fresh-cut fruits and vegetables offer a safer — and possibly fresher — alternative to buying whole produce and cutting it in-house. The labor and time savings can offset the cost of buying ready-to-use products in many cases.
On the retail front, consumers also are looking for convenience. The growth of the retail fresh-cut segment has outpaced the growth rate of fresh fruits and vegetables as a whole. American consumers are looking for more healthful products, and theyre turning to fresh-cuts to meet that need in the narrow time constraints they have.
But while the sales figures point to a positive trend, there are other issues lurking beneath the surface. The rising cost of oil makes transport of products more expensive, which may not be recouped in the retail price. On top of that, the trend for local produce could negatively impact the large national processors, or benefit the regional processors.
Food safety will continue to impact the industry. While safe products is every companys goal, the added costs from lab fees to monitoring software and personnel and regulatory interest will make the cost of doing business prohibitive for smaller processors. Food safety is, of course, non-negotiable, but since its expected retail and foodservice customers arent willing to pay more for those added costs to the processor.
There is not doubt that the fresh-cut industry is here to stay. The innovative products and the search for niche markets that launched the industry continue every year, and the retail sales figures show consumers are trying new fresh-cut items. The mature market of bagged salads and cut melons wont go away anytime soon, but the real opportunities are in products like fresh-cut citrus. See page 8 for a story on the growth of the retail side of the fresh-cut business, with research compiled by the Perishables Group on behalf of the Produce Marketing Association.
Quality is key to continuing the growth trend of fresh-cuts. If consumers arent happy with a fresh-cut product, they may give it a second chance, but no more than that. The story on page 12 on Sandstone Marketing shows how processors can benefit from buying the best quality raw product even if it costs more, its worth it to keep customers.
Im optimistic about this industry, and I look forward to what 2008 will bring. As an industry, well need to stay on top of legislative issues and food safety efforts. These two issues go hand-in-hand right now, as any illnesses related to fresh-cut products will most certainly result in more regulatory efforts. Done correctly, that may not be bad, but done in knee-jerk reaction to a recall will certainly result in restrictive rules that burden processors without making consumers any safer.