July, 2006

Research Perspective and Comments & Analysis

Doing What Tastes Right

Preparing for PMA’s 25th anniversary Foodservice Conference in Monterey, I was struck by the impact this sector has had on our business these past couple of decades. From fresh-cut to custom packaging, the produce industry has learned a great deal about the world of food prepared away from home. Retail innovation has often followed.

But the most powerful lesson we can still learn from foodservice is only now starting to gain real currency in the hearts and minds of our industry. It’s a lesson whose drumbeat has been rising louder and louder in the past few years. It’s a lesson that is at once so obvious to realize and yet so difficult to implement. It’s a lesson about taste, about flavors, about delight.

If you come away from events like the PMA Foodservice Conference with just one “aha” moment, let me wish for you that the “aha” helps you shape how you put your money where your customers’ mouths are. To be more precise, where their taste buds are. Because it’s time for the produce industry to realize that its real path to success lies in knowing what foodservice professionals have always known: that taste sells, that taste keeps people coming back, that taste almost always trumps all else.

PMA research into produce preferences shows that shoppers no longer shop for just a product, but for an experience — and they are willing to pay more if that experience meets their expectations. Produce is hardly unique in this: most of us have heard about The Experience Economy. The foodservice sector as a whole has understood this better than retail. While most supermarkets for too long trained their shoppers to see stores as uninspiring places to restock on necessities, the foodservice sector has gobbled up market share by appealing to taste and experience, by being convenient and delightful at the same time.

It’s no small wonder that the biggest trend in food retailing today is the headlong dash into replicating the success of the Ws (Whole Foods, Wegmans and Wild Oats) and other experiential retailers whose customers want food treated as both sustenance and delight. They have de-commoditized food, turned the shopping experience into a pleasure and raised the bar of consumer expectations.

Every PMA research study to analyze consumer expectations, whether of foodservice or retail channels, puts taste consistently as the No. 1 factor. When it comes to the reasons for ordering a fresh produce menu item, 87 percent pick taste followed by 62 percent who pick nutrition.

The biggest challenge for all of us as produce marketers is not how to effect behavioral change through persistent repetition of “eat healthfully” in our marketing messages. It is how to effect change within our industry so we consistently delight consumers’ taste buds while delivering a more healthful experience. That means focusing what we grow on products that taste great. And it also means constructing a value chain that better rewards growers who deliver great tasting, de-commoditized products time and again.

Let me share a recent story from a PMA staff member. She was visiting a relative with two pre-school children. Juicy, fresh pears served sliced on a platter had Daniel and Dana’s complete attention. Their mother explained how the fruit had been delivered through a standing mail-order a day earlier. Yes, the kids preferred the pears to packaged snacks. And yes, the pears were much more expensive than those she’d purchased at her local supermarket and which had failed to impress the kids several times. So Meredith had made a conscious decision to make sure her kids developed good eating habits early — and doing that with great tasting, premium-priced pears meant bypassing the store and relying on mail-order fruit. Taste always comes first for this smart mom and her kids.

For restaurants, offering consistently tasty fresh fruits and vegetables is a smart business decision. Providing highly nutritious offerings helps counter the pressure that foodservice faces to provide solutions to health issues. We recognize that moving fresh produce closer to center plate is also very cost effective. However, this is not what motivates the consumer.

Look at the newest ad campaigns for leading restaurant chains. They trumpet excitement, taste and lifestyle connections through their menu introductions, which, oh, by the way, happen to be more produce-heavy and nutrition smart. One reason for the focus of these ads may be a finding of recent research by the National Restaurant Association: An increasing number of Americans are nutritionally illiterate. NRA asked 10 questions testing the basic nutrition knowledge of Americans: Fewer than one out of 100 answered nine or 10 questions correctly and three out of four answered five or fewer correctly.

We must all eat; but we choose to dine out. And when we do, it is taste that rules. Two of three consumers agree their favorite restaurant foods provide flavor and taste sensations that cannot easily be duplicated in their home kitchen. The way to encourage diners to choose produce is to stop and recognize why people dine out. The reasons that many people dine out are for the opportunity to treat themselves, to celebrate, to enjoy and to indulge.

However, just like Dana and Daniel who look forward to opening up the next box of fresh produce goodies, they will quickly turn away and perhaps never look back if they are disappointed with less than delightful produce. To keep them coming back for more, we must deliver the goods. If we consistently deliver the flavor and indulgence they crave, we know that consumers will do what tastes right. Delighting more palates is the key to moving more pallets.

Still A Side Dish

Three cheers for nutritional literacy, but we better understand the obstacles. We live in a society where a study of university students found that 40 percent of the students could not place the Civil War in the correct half-century.

Perhaps you think anything that old is irrelevant? Well, the same study found that only 37 percent of the students were aware that the Battle of the Bulge took place during World War II. Please note that those who were surveyed in this study are high school graduates who were accepted at a college and are studying there.

High school students? Well, a national test of high school seniors found that over half of those tested could not name our enemy in World War II. Eighteen percent believed that the Germans were our allies in the war!

So if we can’t get the Nazis down as the enemy, it seems unlikely that nutritional literacy is an achievable goal.

It is a piece of cake, though, compared to getting high-volume produce buyers to make taste a priority. How would they do this? They could order better grade standards — say, a Washington Extra Fancy apple as opposed to a U.S. Fancy grade apple — but that won’t do it because taste isn’t part of any grade standard. It is easy to buy prettier produce because most grade standards are built around cosmetic issues, but it is almost impossible to buy more tasty produce in any kind of standardized way.

Independent high-end restaurants can probably buy more flavorful produce because the chef can walk the local farmer’s market or terminal market, taste the fruit and find that extraordinary lot of peaches. Because that small restaurant can change its menu on a whim, a chef can decide not to do an apple pie today but to do a peach melba because the peaches are so wonderful.

But this is meaningless for the members of the volume foodservice industry. First of all, they do not have the flexibility to change menu items very quickly, so even if they could identify particularly flavorful produce, they probably can’t use it. Beyond this, they have no choice but to simply order by grade standards.

I’ve been trying to nudge Wal-Mart for several years into seizing the leadership role on taste. With its volume and dedicated supply network, it is ideally suited to setting a definition of “Tasty” for many items and then including the definition in its specification. There are plenty of issues at retail: If Wal-Mart insists on a certain brix level and a particular fruit isn’t available, what does Wal-Mart do? Not sell it? Sell bad stuff?

Food serves many purposes in life, so we shouldn’t prejudge the consumer. Maybe a consumer who wants big strawberries wants them whether they are tasty or not because she is going to wrap each one in chocolate or soak it in Amaretto or whatnot.

What would work best would be if Wal-Mart did the research to identify those products with identifiable and quantifiable taste measurements, such as brix levels, and then create a logo to announce this product has been Wal-Mart-certified to meet certain taste thresholds. Wal-Mart could sell the same products without the certification, but its absence on products that can be certified would be a sign the flavor is not ideal on these items.

This would help Wal-Mart. Its vision of being “the buying agent for the consumer” isn’t being fulfilled if that means low price regardless of taste.

It would really help the whole industry because it would let everyone else piggyback on a science-based taste standard. This way, foodservice operators who wanted good taste would also have a standard to order it by.

PMA research has indicated 43 percent of consumers consider the presence of fruits and vegetables to be a key factor when choosing a restaurant. This may be damning the industry with faint praise. Remember a landslide politically is when someone gets about 60 percent of the vote. Johnson versus Goldwater, Nixon versus McGovern; these were routs — but the losers still got 40 percent of the vote.

The truth is that restaurant executives tell us over and over again that the consumer is very focused on protein. All those little comment cards come back and very, very, very few are even talking about the fruits and vegetables on the menu.

A few expensive restaurants, especially steak houses, raise the importance of the fruits and vegetables by selling them on an a la carte basis. But at most restaurants, the “sell” is the protein and everything else is to fill up the plate and the belly — a dynamic that usually leads to copious portions of cheap starches such as french fries or mashed potatoes.

Even in the steak houses where people pay for their produce, it is still the protein that gets center stage. Though sometimes a signature produce item keeps people coming back (the long-established Brooklyn steak house, Peter Lugar, for example, is famous for its tomato and onion salad — though more for its dressing than such fantastic tomatoes or onions), it is still the case that overwhelmingly people select a steak house, whether upscale or mid-scale, for the quality of the meat and the value delivered.

At Peter Lugar or Old Homestead in Manhattan, it may be the prime grade beef; at an Outback, it may be the spices used on a choice piece of meat. Still and all, it is not the norm for consumers to change restaurants because of the quality of the produce.

We may think we are big shots but to many consumers we’re just a side dish.