Increasing Overall Consumption Should Be The Goal

By Jim Prevor, Editor-in-Chief, Produce Business

Analyzing consumer behavior via sales trends is wrought with complexity. For example, back in 1989 when 60 Minutes ran its famous report on Alar, apple sales plunged. It would be easy to draw a causal link: The TV show raised fears about apples and sales thus declined.

A thorough study of the situation, though, revealed that this was not the whole truth. After the publicity surrounding Alar, many retailers decided to put other items, rather than apples, on special. This meant that there was less space given to apples, the prices were not as promotional, and not as much marketing was done to push apples. Apple sales certainly did decline, but was this decline due to consumer concern over Alar, or due to retailers reducing the frequency of apple promotions? It is not easy to ferret out these differences.

So it is difficult to assess the dynamics at work when we look at issues such as health. There is no question that there is a lot of public health advisory and much marketing around this issue. It certainly seems logical that consumers, looking to enhance their health, will increase their purchases of fresh produce. Yet it is not clear that is happening. Transitory sales figures may go up and down, but there is little evidence that per-capita consumption is actually increasing.

Typically, it is impossible to do controlled experiments as to what influences sales. So if carrot sales and fresh-cut salad sales boom in January, is that due to New Year’s resolutions or Super Bowl parties? It is difficult to say.

Some categories certainly are growing in sales. Almost by definition, new innovations in fresh-cut vegetables and fruit will drive these categories. The hope, of course, is that such innovations will boost consumption overall, but it is not clear the extent to which this is happening. Maybe if one spends all day eating junk food in the car, one yearns for healthy fresh food at dinner. Maybe if one snacks all day on cut vegetables, one yearns for a steak at night. Our knowledge on all these things is just not particularly good.

Sometimes production itself is the driver of consumption — a sort of “supply-side” economics for the produce industry. If the volume of Rainier cherries sold is growing faster than that of Bing cherries, that tells us that suppliers are producing more Rainiers. If the growers are correct in their estimation that consumers will pay a premium for this variety, the decision to grow more of it will be profitable. If not, prices will decline but volume will usually still increase as production typically gets sold.

Sometimes, what we call premium products in the trade are, in fact, basic products for certain dishes. So if specialty mushrooms increase in sales, it is not always true that consumers are showing a willingness to trade up to a more expensive product. Maybe those who use Shiitake mushrooms are not simply replacing them with button mushrooms as a side dish for steak; maybe they are using them in an Asian dish that requires the item.

It is also difficult to assess consumer intent if the data we are drawing from is solely from retail. Maybe the growth in specialty mushrooms is a result of consumers economizing by trying to cook dishes they previously purchased in restaurants. Who knows?

Tastes change, cooking becomes more adventurous, and travel and media introduce people to new items and ways to use them. So it is not surprising to see that items such as cilantro, edamame, and jicama are increasing in sales and, presumably, consumption. The challenge for the trade is to turn this into additional total consumption. Does an edamame appetizer add a produce dish to the menu or replace a side dish?

We also need to consider that rapid growth often comes on a very small base. It is terrific that Habanero peppers can increase sales by 104 percent, but it is worth noting that the entire chili pepper category — of which Habanero is a tiny part — constitutes less than a third of the bell pepper category.

Without a doubt, global sourcing increases sales of certain products as it puts popular items such as grapes and blueberries on the shelves virtually all year long. The unknown question, though, is to what extent consumers who buy grapes, because they are now available all year, buy fewer, say, apples because their favorite item is always available.

In the end, increased consumption has to come about by changes in eating patterns, notably the replacement of protein-centric plates with produce-centric dishes in which protein serves as a flavoring. In other words, people need to switch from a steak to a stir-fry flavored with beef. Without this kind of switch, consumers may drive sales of one item or another but aren’t likely to change overall consumption patterns.