Dive Brief:

• Canadian grocer Loblaws announced it is expanding its line of Naturally Imperfect produce to include five SKUs of frozen fruit, according to Progressive Grocer. The offerings include frozen strawberries, blueberries, mixed berries, mixed fruit and mango.
• Introduced two years ago, the Naturally Imperfect line includes produce that’s small or misshapen but otherwise tastes the same as regular fruits and vegetables. Loblaw offers these items for up to 30% less than other produce.
• “Canadians have discovered the value of imperfect fruits and vegetables,” Ian Gordon, senior vice president with Loblaw brands at the Brampton, Ontario-based grocer, told the publication. “Following the success of our no name Naturally Imperfect products in the produce department, it just made sense to expand the line to include frozen items."

Dive Insight:

Loblaws made headlines back in 2015 when it launched its Naturally Imperfect line of produce. Since then, the company has seen customer demand grow, with stores across its chain, including No Frills, Real Canadian Superstore and Your Independent Grocer, frequently selling out.

In an interview with the Toronto Star last year, Dan Branson, Loblaws’ director of produce, said the company spent “five to seven years” working on the line after noticing that lots of perfectly edible fruits and vegetables were going to waste.

“Often they’d go into processing or get left in the field,” he said. “We saw this as an opportunity to promote value and make healthy eating accessible to our customers . . . In some cases people are not buying healthy fruits and vegetables because of cost.”

Many U.S. grocers are seeing the same opportunity. Last year, Walmart began selling a brand of apples called “I’m Perfect” along with misshapen potatoes cleverly titled “Spuglies.” Whole Foods has partnered with startup company Imperfect Produce to supply its stores, while Giant Eagle recently launched a “Produce with Personality” brand. Hy-Vee, which started a line called “Misfits” late last year, announced recently that the program has been a success, and that it has diverted more than one million pounds of produce away from landfills.

Programs like these can go a long way toward preventing waste. The Natural Resources Defense Council estimates 20% to 30% of all produce typically get thrown out.

Loblaws’ expansion into frozen indicates a chance to grow sales beyond the produce department. Grocers, which frequently divert less-than-perfect produce to their kitchens and commissaries, or donate them to food banks, could use these fruits and vegetables in other consumer-facing departments, such as salad bars, deli and prepared foods.

U.S. grocers face difficulties in procuring those misshapen apples, spuds, peppers and carrots. California chain Raley’s ran a 90-day pilot offering what it labeled “Real Good” produce, but didn’t extend the trial due to difficulties maintaining consistent supply. Other grocers that tried to implement imperfect produce programs have said they waited weeks between shipments. As more grocers offer imperfect produce, these challenges are likely to become even more pronounced.

For imperfect produce to take off as a branded product in America, suppliers and retailers will need to come up with better systems to identify and route product. For Loblaws, it gets an assist from the Canadian Food Inspection Agency, which requires suppliers to label produce under different categories and distribute them accordingly. Apples, for instance, get separated into seven different categories. Loblaws says it draws selections from a label called “Canada Commercial,” which includes any apples, according to the Star, that are “smaller, slightly misshapen and discoloured, [and] which may have minor damage from hail or insect punctures.”