“As if multiple years of a global pandemic weren’t enough to throw grocers off track, last year’s extreme weather conditions and burgeoning recession have contributed to particularly taxing times in the grocery sector, especially in fresh foods. But, as our fourth-annual Canadian GrocerProduce Operations Survey reveals, produce sales continue to stabilize and grocers are optimistic about being able to meet the needs of Canadian grocery shoppers – even with ongoing supply chain issues.
In asking grocers across the country about what’s happening in their produce departments, the consensus was clear: even as consumers become more and more cost-conscious, produce is still an essential part of grocery baskets. The question now is how to meet expectations going forward while keeping produce departments profitable.
The majority (80%) of survey respondents said produce sales over the last six months had increased or stayed the same – with even more (87%) expecting this trend to continue for 2023. “We’re actually seeing growth in our produce department in all our locations now,” says Giancarlo Trimarchi, president of Vince’s Market, which has four stores in Ontario. Though high produce prices were very challenging on margins in the past year, he says his team has taken advantage of a reset in price and an increase in supply in early 2023 and passed that onto customers. “When the markets go down, we’re often the first to react to become the most price competitive and it’s working for us,” says Trimarchi. “We are using fresh very much in our promotional materials now to drive customer engagement, while still maintaining a respectable margin.”
Rising food prices have certainly affected shopping habits in produce, said survey respondents, with 47% noting that shoppers are buying more discounted or promotional items, with 35% saying shoppers are switching to less expensive produce options. This aligns with a recent survey from the Ontario Produce Marketing Association (OPMA) released in March 2023 that showed almost 60% of consumers are concerned about price increases for fresh fruits and vegetables, with 45% buying more produce when on sale and 42% shopping at more stores to get the best price. Even with inflationary pressures, respondents in both surveys noted that consumers still prefer to buy local produce. In Canadian Grocer’s survey, 94% of grocers said sales of local produce items had increased or stayed the same compared to the year prior, while more than one third also noted an increase in sales of specialty items and 29% reported increases in organic fruits and vegetables.
Rick Stein, vice-president of fresh foods at The Food Industry Association (FMI), says consumer behaviour is also shifting when it comes to the size of purchases to mitigate food waste. “Spending a couple of years at home watching how much they were throwing away from overbuying has changed the consumer’s psyche … so even though there’s better value in buying more, value is playing less importance than waste.”
Stein says consumers will still pay a premium for pre-cut, prewashed produce, too. “You can buy fruit and vegetables cheaper individually versus pre-cut, but consumers continue to vote for convenience,” he says. In fact, FMI’s Power of Produce 2023 report shows that 68% of shoppers would like their stores to carry a bigger selection of ready-to-eat or cook, precut/washed fruits and vegetables.
At Sunripe Freshmarket in Ontario, “the value-added part of produce is really exploding,” says founder and owner Will Willemsen. “We do our own guacamole, salsas and spiced, mixed vegetables and we’ve really expanded the category to be a huge part of produce,” he says, noting that grocery shoppers prefer foods they can grab and eat or pop in the oven at home. “They don’t want to do the work and they don’t want to waste stuff in the fridge, so they’ll buy a package they can eat in a day or two even though it costs more.” One Canadian Grocer survey respondent also noted that making smaller packages of produce items has been “a great option for seniors in the store.”
*This article is excerpted from Canadiangrocer.com website, published 10th May 2023