March, 2008

Research Perspective and Comments & Analysis

Confidence Rising, Caution Necessary

Confidence in the safety of fresh produce was at its highest level last November since Produce Marketing Association (PMA) began polling consumers on the subject in September 2006. On a 7-point scale, we earned a mean score of five, the highest we’ve seen since that fall’s foodborne illness outbreaks. Sixty-eight percent of consumers report they are confident in the safety of fresh produce, up from 61 percent just two months ago.

Consumers may be rising above the noise of negative headlines and hearing our assertive messages about the industry’s expanded commitment to produce safety. As consumer confidence is regained in the segment hurt most by these outbreaks — fresh-cuts — trust in our industry’s ability to dependably deliver safe, fresh fruits and vegetables can be restored — and sales with it. Our latest research hints this is taking place, yet we cannot ever get overconfident.

PMA had Opinion Dynamics Corporation conduct a national telephone survey of 1,000 primary-shopper consumers Nov. 26-29, 2007. In addition to checking their confidence in produce safety, we also asked them about packaged fresh-cut produce.

While confidence overall has improved, fresh-cut sales are still feeling the effects. Retail data indicate the fresh-cut category has stabilized and recovered, though not to the level we would like. The consumers we surveyed report a substantial drop in the percentage consuming fresh-cut compared to our 2005 survey. Three years ago, nearly eight in 10 made fresh-cut purchases; today the number is six in 10. Among the 40 percent saying they do not buy fresh-cut produce, 11 percent cite concern with food safety, whereas no consumers gave this reason in 2005. So the sting of the spinach crisis is still being felt by at least some of the consuming public.

This latest research indicates packaged fresh-cut produce remains a significant part of many consumers’ everyday lives, primarily because these foods combine the convenience they demand with the health benefits they need. Almost half (46 percent) of the 60 percent of surveyed consumers who buy packaged fresh-cut produce buy it about once a week; they name quality, convenience and price as the top reasons for their purchases. Another 33 percent buy about once a month.

Basic home-meal use tops the list for 57 percent of those surveyed. This tells us that today’s busy consumers value the everyday convenience of fresh-cut. Another 42 percent of shoppers use fresh-cut fruits and vegetables to ease the strain of holiday cooking and entertaining, suggesting our industry has an opportunity to better position the category as a holiday entertaining solution.

High quality is a must for any fresh-cut consumer. Four of 10 shoppers mention quality as the most important factor for buying packaged fresh-cuts, followed by convenience for 21 percent and price for another 17 percent of respondents.

And what about the four in 10 shoppers who say they aren’t buying fresh-cut produce at all: what keeps them away?

Concern for quality is the primary reason among 18 percent of respondents; cost and preferences for bulk rank second and third respectively, less so than in our 2005 survey. That year, 24 percent reported cost concerns compared to 16 percent of November’s respondents. In '05, 25 percent told us they prefer to prepare cuts from bulk versus 15 percent now reporting bulk preferences. And as mentioned previously, 11 percent name food safety concerns as the reason for not buying packaged fresh-cut — a stark but not surprising contrast to zero responses in 2005.

These data remind us of how critical consumer confidence is to our industry’s health, and how quickly it can change. Trust is built and maintained by many small actions over time, so our vigilance and direct consumer communications surrounding matters of produce safety can never cease. Our commitment to proving competence with enhanced produce handling procedures and to working on continuous improvement and verification will earn back the cautious consumer’s trust.

While 2007 saw a dip in retail sales of packaged salads for the first time in eight years, in today’s produce marketing environment what matters most is not where we are now but how far we have come and where we need to go. So while we have some good news, our industry’s work is by no means done. We must never lose sight of the importance of the many fundamental steps we must take day in and day out to uphold consumer trust in the safety of fresh fruits and vegetables.

Recognizing that food safety is a reality of today’s produce industry, PMA recently hired our first chief scientific officer, Dr. Robert Whitaker. Bob will direct creation of PMA’s new science-based programs and services at a time when food safety, traceability, sustainability and other science-based issues are taking immediacy in our industry. He brings the rare combination of a brilliant scientific mind and feet firmly planted in the field, packinghouse or processing facility — he knows how to transfer sound science into sensible business practices. Bob’s hiring is good news, indeed, for the entire produce supply chain’s future. Please join me in welcoming him.

Don’t Ignore Low-Consumption Users

It is, of course, possible “consumers may be rising above the noise of negative headlines and hearing our assertive messages about the industry’s expanded commitment to produce safety,” yet it seems at least as likely that the simple passage of time without a major new outbreak of spinach-crisis proportions has allowed other concerns to rise to the surface. After all, who has the time or mental energy to devote to worrying about fresh produce when one is so busy checking labels to avoid recalled beef?

One clue in the intriguing PMA data is that food safety may operate not only as an absolute value — I trust it so I’ll buy it/I don’t trust it so I won’t buy it, etc. — but as a kind of attitudinal add-on that, as with the proverbial straw that broke the camel’s back, can lead a decision not to purchase.

When Bryan explains PMA’s findings that only six in 10 consumers today report making fresh-cut purchases — down from eight in 10 — and concern over food safety is reported by 11 percent of those not purchasing fresh-cuts, we are left to ponder the implications of this.

If all the consumers who purchase fresh-cuts bought equal amounts of fresh-cuts, and the number of consumers purchasing fresh-cuts declines from roughly eight of 10 to roughly six of 10, that would translate into a 25 percent decrease in fresh-cut sales as compared to three years ago.

Yet fresh-cut sales are actually up over numbers back in 2005 and, even against more recent heights, not down by anywhere near 25 percent.

If these percentages are borne out in subsequent research, it would imply that the consumers electing not to purchase fresh-cuts due to food-safety concerns are the consumers who purchase the least amount of fresh-cuts. There are many reasons why this may be true. A crucial one is that it is easier to indulge one’s concerns about tiny risks if the product is not very important to you anyway.

Every time there is a food-safety issue on fresh-cuts, someone in the industry pulls out some statistics pointing out that the risks of flying on an airplane, driving a car, getting hit by lightning, etc., are higher than the risk of consuming fresh produce. These pronouncements do little to lessen a crisis, and this PMA research provides a plausible explanation as why this may be so.

People need airplanes and automobiles and to be outdoors, so, psychologically, they discount the risks or at least offset the risks with the benefits. In food, however, there is no need to eat any particular item, so consumers are free to indulge their concerns.

Many families that have fully integrated fresh-cuts into their lifestyles haven’t made a salad from scratch in years. They may buy salad kits for lunch and make stir-fry from stir-fry mix; though they eat broccoli florets in almost every dish, it has been so long since they’ve seen a stalk that they think florets are picked from trees like cherries. For these folks, concern about food safety would represent a substantial inconvenience — actually a life change — as they start chopping as grandma used to do. So, perhaps they go into denial and psychologically resist negative information or, perhaps, appreciating fresh-cuts more, they just weigh the risks and benefits. In any case, they seem to keep on consuming.

The occasional buyer, on the other hand, having not integrated fresh-cuts into the life of the family but only occasionally indulging, is much quicker to dismiss the product. It won’t change this consumer’s life much to give it up, so why run any risk?

So the good news is an implication can be drawn from this research that generalized food-safety concerns, not expressed in the midst of a recall or crisis, are likely to affect the purchasing of the lower volume purchasers who are least committed to a product.

There is another possibility, though. Another explanation for the PMA findings would be that certain types of households with low consumption to begin with pulled back due to specific food-safety concerns. Here we need to do some research that is large enough to be statistically valid with small subsets of the data.

The most logical place to start would be to look at the elderly. Food-borne illness is not an equal opportunity health problem. Everyone can suffer from food-borne illness, but the consequences vary dramatically depending on one’s health. A young adult with a robust immune system is probably not going to suffer more than a very bad stomachache. The very young, the very old, people with AIDS or undergoing chemotherapy, anyone with a compromised immune system, run life threatening risks.

Perhaps consumers are more sophisticated than we give them credit for and this health message has been gaining currency. If so, households of elderly people and more vulnerable households might be holding back on purchasing due to food-safety concerns.

Elderly households have always been lower-consumption households. They are smaller, often just one person. Caloric needs tend to go down as one gets more sedentary. Many older people have lifelong habits preparing salads and vegetables and fruit from scratch so they may never have bought into the fresh-cut boom. Money also tends to be a concern for those on fixed incomes.

Yet, if this is true, it is a serious challenge for the industry. The elderly are the fastest growing portion of the population. It is a real target for increased fresh-cut consumption.

PMA would do the trade a great favor by focusing some of its research on smaller cohorts such as the elderly or single moms. There is little information available and the opportunity may well be in developing products and messages on this more targeted level.