Millennials Key to Produce Growth: FMI Research

Demographic’s item, channel preferences influencing overall category

August 1, 2017, 03:09 pm

Produce is growing as a category and spurring more trips to the section primarily because of purchases by Millennial shoppers and purchases of more value-added, organic and branded items, according to Food Marketing Institute’s (FMI) “Power of Produce 2017” research. The category outpaces total store sales, at $63 billion, increased in dollars by 3.3 percent and grew in volume by 2.6 percent over the 52 weeks ending March 19, the research found.

The analysis, conducted by San Antonio-based 210 Analytics, bolstered by information from IRI and Nielsen, and made possible through the support of Hillphoenix and Yerecic Label, identifies strategies for food retailers to consider as they enhance their produce merchandising and marketing programs. One major finding: While price is still an important consideration in produce selection, appearance is the top motivator, with 58 percent of impulse produce purchases resulting from attention-grabbing displays.

“Consumers continue to look at ads and price when deciding where they plan to shop, but ultimately, when they are in the store, the eyes decide; the final purchase and incremental purchases are based on quality product and eye-catching merchandising,” noted Rick Stein, VP for fresh foods at Arlington, Va.-based FMI.

“In addition to customer-perceived quality and freshness, the research emphasizes that the shopping experience matters for the produce shopper,” continued Stein. “Notably, increased sales can occur when knowledgeable associates can assist shoppers: Fifty percent of shoppers tend to repeatedly purchase the same items, but 83 percent welcome advice on unfamiliar items or preparation techniques.”

Although the majority of the report’s findings favored strategies and opportunities for conventional food retailers, this year’s analysis indicated that Millennials are driving growth in alternative channels, including specialty organic stores and farmers’ markets, in the areas of local and organic purchases. The popularity of locally grown is also ongoing, with 54 percent of shoppers desiring a larger local selection, and local is preferred over organic among many consumers in a direct comparison.