Specialty Today, Mainstream Tomorrow
By Jim Prevor, Editor-in-Chief, Produce Business
Specialty fruit is a category that is destined to always be relatively small. The reason is simple. If a specialty item takes off, gains universal distribution, almost universal household penetration and, most important of all, large sales, then it is no longer classified as a specialty fruit, thus removing its heft from the category.
In fact, even among the items currently classified as “specialty,” we would question if that were the best way of understanding these items. For example mangos, the largest specialty fruit, are probably better thought of as staples for many key segments of the population, from Mexicans to Indians, and specialty items for the rest of us.
Kiwi, which this study classifies as the No. 2-specialty item is also a problematic case. If you go by shipper channels, kiwi started with distribution through specialty houses, such as Frieda’s; but today that is not the dominant distribution pattern. Besides, kiwis have been commonly sold in supermarkets for many years and have had plenty of exposure to baking. Is this really a specialty item or just a slow-selling mainstream item?
Perhaps the most shocking — and for the produce industry, the most hopeful thing about this list — is that pomegranates rank No. 3 — behind mango and kiwi. This is a big change. Had such a list been compiled 20 years ago, pomegranates would be included with “other specialty fruit.” So what changed?
First, you have the Resnick family and their keen marketing insight. As owners of Pom Wonderful, they supported medical research about pomegranates, and the results of that research helped to position pomegranates as a health “Super Food.”
Second, the development of machines to efficiently extract pomegranate arils, combined with modified atmosphere packaging, has made consumption of pomegranate much easier.
Kelli Beckel’s point that in-store education and promotion can help raise familiarity with these products, provide usage ideas, and boost sales is not arguable. Yet it is also possible that many of these products are specialty items because their inherent nature is less desirable on a mass-market scale compared to, say, bananas.
The experience with pomegranates teaches us that change in value perception — as with medical research finding hitherto unknown benefits from eating pomegranates — and changes in the product itself — as with pre-packaged pomegranate arils that save consumers time — are more successful methods of boosting consumption.
Indeed, it is not in these figures, but it is good to keep in mind that the real boom in pomegranate consumption is neither in the whole fruit, nor the arils, but in pomegranate juice — a still more convenient way for consumers to get the benefits of pomegranate.
The focus on the total value of the market basket and the fact that grocery shoppers, who include specialty items, have more valuable baskets is a key insight of this study. It is not a surprise. Years ago, the National Association for the Specialty Food Trade (now renamed the Specialty Food Association) sponsored research showing supermarket grocery baskets were larger for consumers who included specialty items in general, such as high-end cookies, balsamic vinegar and fancy chocolates.
Other research has shown that not only are these baskets larger, they tend to have higher margins as well. Filled with high-margin prepared foods, fresh seafood and, yes, specialty foods of all types fresh and non-fresh.
This insight adds enormously to the complexity of managing a store’s assortment. It may be easy for some category manager to study “his category” and ascertain that sales and profitability can both be increased by simply dropping the lowest selling cookie, cracker or apple variety. The problem, of course, is the store’s interest has little to do with maximizing the profitability of any one category.
If selling organic golden raspberries doesn’t maximize space utilization for the berry category, but the consistent presence of organic golden raspberries attracts a certain consumer who buys the store’s most expensive wines, prepared foods, and upscale olive oils, a category manager just “doing his job” could easily discontinue the item and cost the store its most valuable consumers.
It turns out that assortment selection is more like three-dimensional chess than checkers, and retailers abandon these items at their peril.
Indeed the nature of specialty produce items, in which they start as ethnic specialties and pick up in sales as they gain broader distribution, means the changing ethnic composition of the country bodes well for expanded distribution of specialty produce. As with the growth of guava sales chronicled in the research, as specific ethnic groups spread across the country, their culinary favorites get distributed in more stores.
The broader distribution encourages trial by a broader population base and soon the transition from specialty to mainstream is well underway. That is why, say, avocado, is not on the list of specialty produce anymore — it just sells too darn well!