Research Perspective and Comments & Analysis
Strong December Produce Sales Expected
By Kelli Eckel, Senior Marketing Manager, Nielsen Perishables Group
Despite fluctuating economic conditions over the past several years and recent drought challenges, sales of fresh foods have fared relatively well in 2012. Given the momentum that produce sales gained in the past year, the likelihood of a successful year-end wrap up is good. To help quantify the momentum as we enter the final month of 2012, we examined sales during December of last year, as well as the key summer season this year.
If December, 2011, sales are any indication, year-end sales for 2012 will trend upward. During December of last year, 31 of the 44 produce categories increased volume sales compared to the prior year. Categories such as berries and value-added fruit had strong growth during this period, with volume increases of nearly 30 percent and 10 percent, respectively, as did the smaller stone fruits category, driven primarily by plums.
Categories with historically high December sales include citrus, apples and bananas, as well as categories commonly used for holiday meals such as potatoes, packaged salad, tomatoes and onions. These core commodities show signs of maintaining, if not growing, sales based on high performance during the key summer season this year.
The citrus category had a 12 percent volume increase and modest dollar growth during the 2012 summer, thanks to an 8 percent dip in average retail price. With even stronger winter sales due to peak seasonality, citrus was a top category with high volume and dollar sales during December, 2011, despite a 13 percent average retail price increase from the previous year. Even if average retail prices for citrus rise during this holiday season, it’s unlikely to deter consumers from purchasing.
Value-added vegetables, a growing category that satisfies popular convenience and health demands, surpassed traditional categories such as potatoes, packaged salad and tomatoes in terms of dollar and volume growth during December, 2011. The increasing array of choices within value-added vegetables also contributed to category success. During December, 2011, the average number of unique items sold on store shelves for value added-vegetables grew a significant 12 percent from the previous year. The category’s popularity did not falter during summer 2012. Value-added vegetables had the period’s greatest growth among vegetables due to their perceived value with consumers (prices and promotions did not fluctuate significantly during either time period) and a 7.6 percent increase in average weekly unique items per store, suggesting continued category growth and product proliferation this December.
Traditionally, popular holiday categories could also achieve strong performance this season. Fueled by their popularity as a snack and ingredient during holiday gatherings, as well as increased item count, nuts and seeds had strong performance during December, 2011, with a significant increase in dollar sales due to a 14 percent hike in average retail price. Despite the price increase, nuts and seeds increased volume 8 percent, proving their unwavering popularity with consumers. The summer also provided shoppers with greater variety within the category, as average unique item count increased 7 percent compared to the previous year. During summer, 2011, nuts and seeds continued their upward momentum. Unique item count increased 17 percent, and the category achieved high volume and dollar growth without notable price change, suggesting increased consumer demand will remain in December, regardless of price changes.
For more seasonally driven products like avocados, strong summer sales don’t necessarily assure high sales during December. However, maintaining consumer interest during December is possible. Avocados experienced modest dollar growth and nearly 8 percent volume growth during December, 2011. Their growing appeal continued during the summer months when a near 30 percent price drop drove avocado volume up a remarkable 46 percent. Produce beverages (which include coffee, ciders, teas and fruit juices) experienced a similar trend. Although dollar and volume sales were lower in December, 2011, than in summer, the category still experienced growth compared to the previous year.
Several factors currently at play could impact the momentum gained during the past year. Residual drought conditions and continued economic uncertainty could cause consumers to revert to more spend-conscious mindsets. However, a new Nielsen Holiday Shopping Sales survey cites factors including higher consumer confidence levels, increased impulse buying and consumer intent to spend more this season that could curtail possible challenges arising from economic or drought conditions.
Given the sustained success of fresh produce over the past year and particularly strong summer sales, conditions are favorable for a strong closing month of the year within the produce department.