June 18, 2017

Value-added sales surpass $4 billion, continue to expand

The FreshFacts on Retail 2016 report from the United Fresh Produce Association and Nielsen Perishables Group shows fresh produce dollars and volume grew in 2016. Of that, value- added fruit and vegetable sales (not including packaged salads) surpassed $4 billion – that is despite reaching less than 50 percent of American households.

“Fresh-cut keeps expanding,” said Pat Mele III, executive vice president and CFO at FreshPro Food Distributors in West Caldwell, New Jersey. “You’re seeing it everywhere – convenience stores, gas stations, even your pharmacies, because everybody wants convenience and grab-and-go.

“And the millennials – that’s a big chunk of the population driving convenience. A lot of them want something quick.”

While still in their early stages, fresh-cut and value-added products are also reaching consumers through online shopping and meal kit services, the FreshFacts report notes.

Fresh-cut and value-added yield a broad range of products. They include salads and salad kits, cut fruit from snack sizes to party trays and convenience ingredients like chopped onions and mirepoix mix. Don’t forget kits – take a stir-fry line from Taylor Farms that includes chopped vegetables and a sauce, or a Soup Starter Kit from Melissa’s that combines fresh potatoes, carrots, zucchini, a celery stalk and onion in a tote cleaned and ready to be cut and cooked with broth that eliminates the need to buy a whole bunch of celery or bag of onions for one recipe – another driving force behind some of these products, said Kathy Means of the Produce Marketing Association.

“It’s not just being responsive to consumer needs, but being proactive, identifying the problems they have and solving those problems,” she said.

Meanwhile, retail fresh-cut has moved beyond the grocery store produce aisle to convenience stores, which continue to embrace what processors can offer.

The National Association of Convenience Stores reported that in 2016, 63 percent of their retailers reported that sales of better-for-you items including fruits and vegetables were up, and that trend is likely to continue. The United Fresh Produce Association’s Winter 2017 Fresh Insights for Foodservice report shows that 29 percent of c-stores plan to add a fresh fruit cup to the menu, as well as fresh-cut raw vegetables; 26 percent expect to add green salads; 25 percent plan to add side green salads; and 23 percent have their eyes on salad bars.

In total, sales of value-added fruits (those sold in a tray with plastic overwrap, fresh-cut and jars and cups) in 2016 were up 8.3 percent over the previous year, according to FreshFacts. These fruit products represented 4.8 percent of total produce sales in 2016, with per-store sales up in every category except jars and cups.

Value-added vegetables – side dishes, meal prep, trays and snacks, but not including bagged salads – trailed fruit at 3.7 percent of total produce, but still represented an 8.7 percent boost over 2015. An 11 percent increase in the average number of value-added items available drove sales, the report indicates. Data also showed that commodities with flat or declining sales – carrots, mushrooms – did experience growth in their value-added versions.

The organic category is also gaining ground within fresh- cut/value added. FreshFacts shows that organic packaged salad represents 23 percent of all packaged salad dolltars, with sales up per store by 6.1 percent. Sales of value-added veggies were also up per store by more than 25 percent.

See more on the state of the industry in the May/June issue of Produce Processing.

— Kathy Gibbons, contributing writer


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