Study Looks at Projected Fresh-cut Produce Growth, Packaging and Other Trends

Experiencing double-digit growth for most of its 15-plus year existence, the fresh-cut produce industry is poised for even more phenomenal growth over the next decade and a half. Currently a $12.5 billion category, it continues to be the fastest growing segment in the produce sector.

A new study, commissioned by the International Fresh-cut Produce Association (IFPA) and available to its membership, was released during the association’s ExecTrends conference, held Sept. 27-28 in Alexandria, Va.

Entitled, “Fresh-cut Produce Fuels an America On-the-Go,” the study paints an optimistic future for smart and aggressive fresh-cut produce entrepreneurs, those involved in pre-cut salad, vegetable and fruit products, but particularly fresh-cut fruit.

“Cut packaged salads remain the big engine pulling the fresh-cuts train with over $3 billion in annual retail sales followed by cut vegetables at $1.7 billion,” the copyrighted “white paper” proclaims. “But coming on fast is cut fruit, currently a $300 million category at retail but on a trajectory to surpass $1 billion in the next three to four years.”

Second to Bottled Water
Consumers have made packaged salads the second-fastest selling item in U.S. grocery stores, trailing only bottled water. The movement to fresh-cuts is helping retailers boost their margins by reducing both labor and sanitation costs. At the same time, fresh-cut products are helping processors exit off of the commodity highway and “into the higher price-point, value-added product lane,” the report points out.

Quoting Marvin List, director of fresh-cut operations for Del Monte Fresh Produce, the report notes that fresh-cut fruit products are “the candy of the produce world. People don’t need to be talked into eating fruit; it’s just naturally good eating,” he says, adding that “the fact that our industry is making it easier for them just helps that much more.”

The “white paper” reviews efforts underway to correct the nation’s growing problem with obesity and points out that quick-serve outlets, school cafeterias, airlines and foodservice establishments are adding healthy, produce-centric offerings, including many now incorporating protein sources.

While the market drivers may be in neat alignment, “that does not mean fulfilling consumer needs will be easy,” the report warns. “Delivering high-quality, fresh-cut fruits and vegetables to consumers is not the same as a can of beans. Processors are working with a living, breathing, organism whose spoilage-spiral begins upon harvest. From that moment, a race ensues to deliver a fresh-cut produce item at or near its optimum quality.”

The 56-page report, mailed to the membership, advises fresh-cut processors to: (1) “Focus on the consumer, the right consumer;” (2) “Tell them about fresh-cut;” (3) “Give them new things to try;” (4) “Deal with success as fresh-cuts move center-plate and center-stage; (5) “Shorten the supply chain to keep the ‘fresh’ in fresh-cut;” (6) “Create offerings for different retailing and foodservice channels;” and (7) “Think out-of-the-box about packaging.”

Fresh-cut processors are increasingly tracking consumer behavior and lifestyles, the study informs. “The new consumer focus is picking up steam and will soon be reflected in new products and packaging that deliver what consumers want, not just what can be conveniently made for them.”

As the industry faces the future, fresh-cut producers are advised to provide more recipes and time-saving tips to help today’s on-the-go consumers with meals that can be prepared in 20 to 30 minutes or less.

New and Interesting Products
Those who can provide new and interesting varieties of salad greens, vegetables and fruits are expected to prosper, the report predicts. New varieties of fruits and vegetables are adding excitement and are being sourced in the markets of Latin America, Asia and Africa. Identifying and tying up needed supplies, however, is expected to require effort and commitment.

As the merger of salad and protein continues, “it may also produce more corporate mergers as companies seek to acquire protein producers,” the industry is warned. Continued fresh-cut produce growth will bring with it increased interest from industry giants.
While there has been considerable effort in the past to boost product shelf life, the focus is shifting. Today, the interest is in shortening the supply chain to maintain product freshness.

“If we’re going to get to where consumers want us to be, especially with cut fruit, we’re going to have to shorten, not lengthen, the span from harvest to consumption,” warns Tom Lovelace of Fresh Express, quoted in the study.

“Fresh-cut producers are creating products and packaging that will increasingly position fresh-cuts into a larger array of retail channels-club stores, mass merchandise chains, vending machines and an even broader array of foodservice outlets, especially schools and office,” the “white paper” asserts. “Discovering what products sell best in which channels and aligning the right kind of packaging with those products will challenge the industry.”

As various companies examine how they will package fresh-cut products in the years ahead, the IFPA study challenges them “to more aggressively find ways to use their packaging to project a message about the company, its product freshness and quality, how to use the product, etc.”

Packaging Changes
The packaging focus over the past 15 years has been on shelf-life extension, product quality, and safety-all important-but, as they look to the future, fresh-cut producers are exploring additional packaging formats, including single-serve, snacking portions and multi-component salad bowls, the study adds. “Packaging is more than just a box or a bag; it’s a full partner with the product, and there are few product/package combinations out there where that is truer than in fresh-cut produce.”

For more information on the full report, “Fresh-cut Produce Fuels an America On-the-go,” contact IFPA at: 1600 Duke Street, Suite 440, Alexandria, VA 22314-3400; phone: (703) 299-6282; e-mail: [email protected]; Web: www.fresh-cuts.org.

© 2004 Columbia Publishing




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