November 18, 2021

Produce sales remain above pre-pandemic levels

Twenty months into the pandemic, fresh produce retailing remains in flux. Continually changing consumer consumption and buying patterns, high inflation and severe supply chain disruption and constraints have yet to create a new and lasting balance of supply and demand.

IRI, 210 Analytics and the Produce Marketing Association (PMA) have teamed up since March 2020 to document the ever-changing marketplace and its impact on fresh produce sales.

Meals continued to be home-centric in October.

“According to the October IRI primary shopper survey, the share of meals prepared at home is back to late spring, early summer levels,” said Jonna Parker, Team Lead Fresh with IRI. “There are many drivers for the reversal, from the uptick in COVID case counts to rapidly rising inflation. While retail inflation is the highest in many decades, the cost for eating out rose even faster. Restaurant inflation typically results in more at-home meal preparation and it is likely we will see an enhanced reaction as many people were reminded of the potential savings and other benefits of home cooking over the past 20 months.”

Other changes also point to a reversal in the normalization of shopping and consumption patterns. During the height of the pandemic, as many as 20% of trips were online. This dropped to a low of 11% in July. In October, the online share of trips increased to 15%. Yet online shopping remains a complementary trip for most consumers.

“Only 4% of survey respondents believe they will buy all their groceries online in the next month,” said Parker. “This compares to 21% who will only buy some or a little online. This underscores the importance of a strong omnichannel strategy to optimize the share of total dollars, particularly in fresh.”

Year-to-Date Sales

The first 10 months of the year brought $577 billion in food and beverage sales — now up 1.0% over 2020 and 15.5% over the 2019 pre-pandemic normal. However, inflation played a significant role with year-on-year units still down 3.6%. Perishables, including produce, seafood, meat, bakery and deli, had the highest year-over-year growth during the first 10 months of 2021, at +1.5%. Frozen foods had the highest increase versus the pre-pandemic normal of 2019, at +22.9%.

Year-to-date

2021 through 10/31/2021

    % sales change versus year ago
Dollar size Dollar sales

vs. 2020

Dollar sales
vs. 2019
Unit

Sales vs. 2020

Total food and beverages $577B +1.0% +15.5% -3.6%
Total perishables $260B +1.5% +14.5% -2.4%
Total frozen $56B +0.3% +22.9% -3.1%

Source: IRI, Integrated Fresh, Total US, MULO, % change vs. year ago.

Food inflation

The consumer price index increased 6.2% in October, the largest year-over-year increase in 30 years, according to the Labor Department. Food prices jumped 0.9% for the month and 5.4% for the year. IRI-measured price per volume also shows that prices continued to rise over and above their elevated 2020 levels for food and beverages. 

Price index vs. YA 8/1 8/8 8/15 8/22 8/29 9/5 9/12 9/19 9/26 10/3 10/10 10/17 10/24 10/31
Total food and beverages 104 105 105 106 106 106 106 106 106 105 106 107 107 105

Source: IRI, Integrated Fresh Total US, MULO, inflation index vs. YAGO

While fresh sales are strong, it does appear that the produce department is not capturing all of the demand that returned to retail in recent months. “The share of fresh fruit and vegetable dollars across the store reached a high in May 2021 and has dropped slightly ever since,” said Watson. “At the onset of the pandemic, the fresh share dropped as low as 76.9% in the first quarter of 2020. October was the first month this year that fresh produce dropped below the 80% mark. While inflationary pressures are different across fresh, frozen and canned, demand for items with longer shelf life seems to have returned.”

In frozen, fruit represented 20% of October sales. Frozen fruit sales increased 1.0% year-on-year whereas frozen vegetables declined 6.7%. In canned, fruit also outperformed vegetables. Fruit sales increased 7.2% in October 2021 versus year ago compared with -0.5% for shelf-stable vegetables. All areas are still benefiting from robust demand versus the 2019 pre-pandemic normal.

October 2021 Dollar
sales
Dollar sales gains vs. 2020 Dollar sales
gains vs. 2019
Fresh produce department $6.549B +3.8% +15.9%
Shelf stable fruits $395M +7.2% +17.9%
Shelf stable vegetables $645M -0.5% +10.0%
Frozen fruits and vegetables $645M -3.2% +14.9%

Source: IRI Integrated Fresh, Total US, MULO, % dollar growth vs. 1 and 2 years ago

October 2021 Versus comparable period in 2020
Top 10 produce items in absolute dollar growth Absolute dollar gain Dollar % growth Total dollar sales
Berries +$94M +15.9% $687M
Melons +$37M +20.5% $219M
Grapes +$32M +8.3% $411M
Apples +$28M +6.8% $443M
Salad kits +$20M +6.9% $313M
Mixed fruit +$16M +22.4% $86M
Avocados +$13M +6.1% $224M
Pumpkins +$12M +7.8% $171M
Bananas +$10M +3.6% $300M
Nectarines +$10M +234% $14M

Source: IRI Integrated Fresh, Total U.S., MULO

Perishables performance

A look across fresh foods departments for the five October weeks shows perimeter strength. All departments, with the exception of seafood, gained year-over-year, with the highest increases going to deli and meat. Seafood is significantly smaller than the other fresh departments and deli sales overtook bakery sales this month, with October sales of $4.0 billion.

October 2021 $
sales
Dollar sales gains
vs. 2020
Dollar sales gains
vs. 2019
Total perishables $260B +1.5% +14.5%
Meat $7.9B +7.2% +22.3%
Refrigerated (including dairy) $7.0B +1.6% +12.5%
Produce $6.5B +3.8% +15.9%
Deli (meat, cheese and deli prepared) $4.0B +11.3% +15.1%
Bakery $3.5B +6.4% +12.7%
Seafood $584M -0.5% +29.5%

Source: IRI Integrated Fresh, Total U.S., MULO, % change vs. YA, fixed and random weight items combined into department views


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