Research Perspective and Comments & Analysis
Bundle Of Consumer Benefits Drives Sales Growth For Packaged Salads
By David Sprinkle, Research Director And Publisher, Packaged Facts
Packaged Facts estimates that U.S. sales of branded packaged salad greens/kits and fresh-cut vegetables or fruit through all retail channels reached $5.6 billion in 2013. All retail channels were determined by IRI multi-outlet (MULO) data as a background source, and we factored in additional outlets including Costco, Sam’s and BJ’s, as well as convenience stores, major chains, independents, natural food stores, specialty, “ethnic” and neighborhood grocery stores.
The usage rate for packaged salads is at 70 percent, according to Simmons National Consumer Survey data from Experian Marketing Services, or 83 million households. Packaged Facts conservatively forecasts a compound annual growth rate (CAGR) of 4.6 percent through 2018 for this market.
Today’s consumers are increasingly striving to maintain or adopt healthful eating habits, and eating more fruits, vegetables, and salads is a favored means toward that end. In addition, consumers are acting on a growing preference for fresh foods over processed, as well as for foods with fewer and simpler, natural ingredients. Packaged Facts’ consumer survey data from January/February 2014 shows freshness as the single most desirable attribute for a food product, being selected by half (49 percent) of U.S. adults as an attribute they “especially seek out” when food shopping.
Correspondingly, three-fifths (59 percent) of consumers somewhat or strongly agree that they are buying more fresh produce than they did in the past, with conversely only 11 percent of consumers somewhat or strongly disagreeing that they are doing so.
Convenience, of course, is another key selling point for packaged salads and value-added fresh produce. Consumers can incorporate these healthy green vegetables into their diets without the washing, peeling, trimming, chopping, and other steps typically required when preparing fresh produce. Waste and spoilage can be minimized in that the produce is easier to use and thus more likely to be consumed. Value-added products packaged with condiments or toppings that complement the salad mix remove any guesswork when using the product — an extra bonus for consumers who aren’t savvy about meal preparation or planning.
In addition, packaged salad marketers are responding to the current consumer emphasis on protein, including new vegetarian and high-quality sources of protein, a demand fueled in part by the desire to promote satiety, and thus weight control or weight loss. High protein is another important product attribute consumers seek when buying food, according to Packaged Facts survey data. Packaged salad marketers responded by adding ingredients such as poultry, cheeses, beans, edamame, seeds, and quinoa. Packaged salads featuring quality proteins double their punch as healthy and weight-conscious meal options.
Salads with upscale, gourmet positioning are a simultaneous trend, as consumers of packaged salads are significantly more likely than average to be foodies. Thus, a number of recent product introductions contain foodie favorites and trendy ingredients such as bok choy, chicory, frisee, kale, lolla rosa, máche, mizuna, tango, tatsoi, and wasabi arugula. Packaged salad kits also increasingly come in varieties inspired by ethnic cuisines, notably Southwestern and Asian. Innovative salad kits and meals-in-a-bowl give adventurous consumers a user-friendly and healthful format for international food and flavor adventure. Local and seasonal ingredients provide additional scope for new product innovation that will be in tune with the changing landscape of consumer food shopping priorities.
The Meaning Of Fresh
Sometimes the interesting data is on the flip side. Here, for example, we find that with all the hullaballoo about veganism — and ambassadors such as vegan-darling, President Clinton — only 3 percent of consumers claim they seek out vegan foods. Artisanal is oh so hot and trendy, but only 3 percent of consumers report they seek out artisanal foods.
The big winner shows up as “Fresh” — with 49 percent saying they seek fresh product when food shopping. The problem, though, is that the word has lots of meanings, and it is not at all clear what consumers are saying. In the produce trade, we like to believe it means consumers are seeking fresh product as opposed to canned or frozen, but that is kind of odd; after all, virtually every supermarket has a substantial fresh produce department. There is no problem in finding fresh produce.
Perhaps there are unspoken qualifiers, such as a desire for fresh produce priced competitively with canned or frozen? More likely, since the question is not what do you seek when you buy produce but what do you seek when you buy food, it expresses a generalized desire for product that is not old or soon-to-be unfit for consumption. The consumer wants fresh bread, not stale bread, fresh milk, not sour, fresh meat, not discolored or with an odor, and the consumer wants produce that appears to be alive and crisp, and, well, fresh. Not produce that looks like it is on its last legs or is attracting fruit flies.
David Sprinkle, research director and publisher for Packaged Facts, seems to lean toward the idea that in seeking fresh foods when shopping, consumers are seeking “real” foods, not processed. So “fresh” means “unprocessed” or “natural,” but even here there is a lack of clarity as to what consumers think of as “unprocessed.” Are frozen strawberries deemed processed? And why is it that fresh-cut produce sales will continue to grow if consumers want “unprocessed” foods? Do they not see fresh-cut as processed?
Is the growth in fresh-cut not so much an outgrowth of consumer attitudes toward fresh convenience, but rather the growth a result of the font of innovation in the fresh-cut produce sector? While whole items change slowly as varieties evolve, fresh-cut can quickly innovate to meet consumer needs.
Yet there is some cause for concern here. Protein is more expensive than most produce. If the growth in produce comes from adding protein to items, this could cause retail produce-department sales to grow, while actual volume of fruits and vegetables sold declines.
When we read that consumers express they are “buying more fresh produce these days,” one wonders what the point of comparison is and how hazy are the memories. After all, there is little evidence that consumption is up. So how could this be true?
Perhaps it is just people responding in the way they think will win them approval, or perhaps they find themselves buying produce in more places. After all, they can get produce today from drug stores to dollar stores to CSAs. But the total volume hasn’t actually budged. Maybe it is a demographic fact that is always true — older people become more health conscious and buy more fresh produce. If so, then individuals will always truthfully report that they buy more produce than they used to, but as a whole, society’s consumption will not change absent population growth.
Perhaps it remains to be determined if salads with trendy ingredients — such as bok choy, chicory, frisée, kale, lolla rosa, máche, mizuna, tango, tatsoi, and wasabi arugula — are a trend or a signal of a bifurcation in the market in which a foodie sub-culture goes off in a direction increasingly unattached to the swings of the mainstream market.
The real struggle is understanding what it means when a consumer says that he/she is “seeking” a particular food characteristic. In the case of organics, as an example, 16 percent of consumers claim to be seeking this, but organics are not hard to find. And with less than 1 percent of U.S. farm and ranch land certified organic, it doesn’t mean that 16 percent of consumers are solely eating certified organic food.
Since it is pretty easy (albeit pricey) to eat organic, with lots of options to buy organic food, the consumers who express these thoughts must mean something different, perhaps just that they are receptive to the idea of buying organic, and if it is available at a competitive price, they will buy it.
Walt Whitman told us, “Do I contradict myself? Very well, then I contradict myself. I am large, I contain multitudes,” so it seems with consumers: they seek fresh, but convenience is key; they want fruits and vegetables, but protein is a priority. The answer is that the industry must segment. What consumers — en masse — claim they want is never as important as what consumers want on specific shopping occasions. As the data collection improves, the opportunity for retailers and suppliers to focus improves as well. The opportunity is not to be broad, but to be specific; embrace research, but shrewdly. pb