Food for Thought: Experts offer snapshots on fresh-cut industry

January 6, 2014

The start of a new year is always a good time to take stock – to reflect on where we’ve come from and look ahead to where we’re going. In this first issue of 2014, Fresh Cut magazine asked experts who know the fresh-cut segment for their take on the state of the industry. Part one of the interviews will run this issue, with part two appearing in the February issue.

The consensus seems to be that the industry has made great strides, is doing a lot of things right and can look forward to a future filled with possibilities for new products and niches.

Bob Swartwout

Senior vice-president of sales, Direct Advantage LLC, United Fresh Produce Association Fresh-Cut Processor Board

What do retail customers say is the main reason they buy fresh-cut products, and why?

Mostly convenience. Time-stressed consumers will always go value-added when they can justify the upcharge. Bulk produce is foreign to many and others are leery of yield and quality on bulk items, not to mention wanting to avoid the prep time.

What is the major reason retail customers do not buy fresh-cut products, and why?

Two reasons, really: Price vs. bulk and past experiences. Many consumers are willing to go fresh-cut, up to the point of not seeing the value. Past experience of poor fresh-cut quality can lead to reluctance to buy, particularly if there were multiple bad experiences in the past. The higher the cost per pound, the more this seems to manifest itself, hence the significant barriers to cut melons and other high-price fruit versus less reluctance on lower-cost vegetable and salad items. Consumers are pretty good at making cost/benefit analysis on the fly while standing at the produce racks.

What are the most successful blends and flavors? Which blends are customers demanding that are not yet on the market?

Success of various fresh-cut items varies dramatically by region. Different consumer ethnicities, demographics and income ranges tend to favor very different types of fresh-cut offerings. Regional influences vary greatly and also lend to the great diversity of offerings from one region to another. Asian, Southwestern/Mexican and Southern offerings seem to do well across the country, while other regional variations tend to stay in their respective home turf.

What are fresh-cut processors doing well? What can they do better?

Fresh-cut processors are, and always will be, adapting to consumer preferences as they shift over time, whether at retail or within foodservice. Some standout examples are the shift from yellow to red onions; plain iceberg salad blends to the variety of exotic blends we now see; the proliferation of microwaveable cut and bagged veggies; party trays of cut fruits and veggies; organics, etc.

How would you assess the value that fresh-cut products deliver?

Fresh-cut produce provides a good value to most consumers, and competition has kept prices affordable. There will always be consumers and foodservice outlets that prefer to “cut it themselves,” but even those end users will opt for fresh-cut when time is an issue. People will pay for convenience; they just won’t “over-pay” for convenience.

What do you predict will be future products and niches?

I think we will see a continuation of the trend toward “meal solutions” and salad or recipe kits that include pre-portioned fresh-cut produce and other non-produce items in meal kits and other recipe-based options. We will see this both at the consumer level at retail, and with restaurant foodservice. The drive for greater convenience and predictability of produce will be the main driver at retail; the same will apply at foodservice, with the added benefit of reduced floor space dedicated to prep activity that can be transferred to “butts in seats” in the dining rooms and greater front counter productivity.

Any other thoughts?

The fresh-cut industry has changed, markedly over the past 30 years and will no doubt continue to change and grow with the demands of the marketplace. A macro trend we are likely to see is a return to more local and regional processing, as the limits of source-based processing have been stretched and as customers demand more specialization, customization and “just-in-time” services. We have already seen some of this, and as the marketplace evolves, one wonders what kinds of changes we will see and adapt to our businesses. Food safety and the new Food Safety Modernization Act will also affect the industry in still uncertain ways, from the field to the process rooms.

Karen Caplan

President and CEO, Frieda’s Specialty Produce in
Los Alamitos, Calif.

What do retail customers say is the main reason they buy fresh-cut products, and why?

Consumers, who are time-pressed, continue to show an interest for convenience foods – so retailers have responded by offering many varieties of cut fruits and veggies, along with ready-to-prepare items (such as stuffed mushrooms, oriental stir-fry vegetable mixes and vegetable kabobs for grilling)

What is the major reason retail customers do not buy fresh-cut products, and why?

The biggest challenge with pre-cuts is limited shelf life. This is why many retailers partner with local processors, who can provide daily delivery and the longest possible shelf life.

What are the most successful blends and flavors? Which blends are customers demanding that are not yet on the market?

Any type of “superfood” seems to be a natural success. Of course, that means anything with kale is an instant hit! My personal favorite is the newest Sweet Kale Vegetable Salad Kit from Eat Smart (Apio).

What are fresh-cut processors doing well? What can they do better?

Processors are responding to consumer trends more quickly and coming up with new products that are responding to consumer demand. Also, processors seem to have eliminated that “chlorine” or processed flavor, which is a turn-off to shoppers.

How would you assess the value that fresh-cut products deliver?

For the time- pressed shopper, fresh cut products are definitely a value.

What do you predict will be future products and niches?

Mixes that have a healthier total nutritional makeup (less oil, fewer additives, less salt, protein alternatives) will become more popular. Mixes that allow the shopper to make/add the ingredients they want, when they want them, will be more popular.

Any other thoughts?

Food safety will always be “the elephant in the room” when it comes to the fresh-cut industry. So the continual focus on this is important. As an industry, we are only as strong as our weakest link. I believe there will be more standardization when it comes to third party certifiers, so there are few chances for error.

Gina Nucci

Director of healthy culinary innovation,
Mann Packing, Salinas, Calif.

What do retail customers say is the main reason they buy fresh-cut products, and why?

Convenience, convenience, convenience. In this day and age everyone seems time-starved, and fresh-cut, value-added products and packages offer help and give busy moms and dads fresh options to “grab and go” and bring home to feed their families. Whether it’s for dinner that night, or as part of a consumer’s weekly shopping, ease of use is another reason why people love fresh-cut products. Prepared and ready-to-use products from value-add packages can be added to a dish to complement and/or complete it, or can be a stand-alone meal or side dish.

In the foodservice channel, fresh-cut products not only help reduce labor costs, but also provide value by stabilizing pricing and providing consistent sizing and supply.

What is the major reason retail customers do not buy fresh-cut products, and why?

The price points can be higher on fresh-cut products than on unprepped raw produce because, of course, there was work involved in producing them. Also, some consumers may not want to deviate from their recipes/ingredients and so it’s easier for them to buy raw products to create their own dishes from scratch.

What are the most successful blends and flavors? Which blends are customers demanding that are not yet on the market?

Our most successful blend is our Vegetable Medley, which includes three fresh-cut and ready-to-use items in one bag—broccoli, cauliflower and baby carrots. Our butternut squash cubes, though not a “blend” per se, are very popular and growing dramatically. The difficulty of cutting/prepping hard squash adds to the favorable value-added appeal to consumers.

What are fresh-cut processors doing well? What can they do better?

Continually innovating new items and keeping up with new food trends is key to launching a successful fresh-cut product. There’s always room for improvement and undoubtedly, the ability to bring items to market faster to keep up with consumers’ ever-changing food preferences and meal solution needs would be integral to the success of a new product.

We can always market “fresh” a little better. We want to get the frozen customer switched over to the fresh category.

How are you presenting/displaying/merchandising fresh-cut in retail produce departments and foodservice counters

Our retail partners have different ways in which they merchandise Mann’s fresh-cut products. These products should never be out of the cold chain and consumers can find them in refrigeration or coolers in the produce department. Mann’s products are all fresh — never frozen.  Mann also produces and provides point-of-sale materials for retailers and typically does different promotions throughout the year on different products/packages including on-pack messaging, recipes and coupons.

How would you assess the value that fresh-cut products deliver?

If “value” is the price someone is willing to pay for a product or service, then any price differential for people who see value in a fresh-cut product would be a moot point. Time-starved, multi-tasking consumers see fresh-cut products as a great value; people who have more time on their hands may not justify the price point and may opt to buy raw commodity products. The demographic is somewhat different even though there is some crossover.

What do you predict will be future products and niches?

Kits are very popular and (complete) meal solutions seem to be the direction consumers are going. But the products need to be not only fresh, but flavorful and tasty and something the preparer — whether a busy parent or an at-home-wannabe-chef — need to feel comfortable serving. We don’t market to get the first sale, we market to get repeat sales from happy return customers.

—Interviews conducted and compiled by Kathy Gibbons, contributing writer



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