Dive Brief:

• According to the latest quarterly FreshFacts on Retail Report, produce sales are growing across the board, with average weekly sales up 2.5% in this year's third quarter versus the same period a year ago. The produce department can play a key role in providing competitive differentiation and attracting shoppers into the store as more packaged goods spending migrates online, according to a United Fresh Produce Association statement.
• Value-added selections, such as pre-cut fruits and vegetables, packaged salads, expanding organic assortments, and innovation around veggie pasta and rice are driving sales growth in the department, the report notes.
• “Health and convenience are both key factors in the rise of new products in the produce department,” Jeff Oberman, United Fresh Vice President of Trade Relations and United Fresh’s Retail-Foodservice Board liaison said in the release. “From kits to veggie noodles, we expect continued growth and expansion of fresh-cut and value added products, both in private label and branded produce.”

Dive Insight:

The study by the United Fresh Produce Association finds that visits to the supermarket for fresh foods are up compared with a year ago, while overall trips to the supermarket are down. Produce, which accounts for a third of all fresh sales, is a key driver of in-store visits and grocery store sales. According to Nielsen data presented in the report, average transaction size increases from $41 to $63 when produce is in the basket.

It’s little wonder, then, that grocery stores are increasingly focusing on perimeter departments, and especially produce. The produce department not only provides a point of differentiation but also serves as an integral component of a retailer’s health and wellness and sustainability efforts. Demand for fresh fruits and vegetables is growing as consumers increasingly integrate produce as part of a daily health regime. Walmart, Kroger and other retailers have expanded their produce sections to meet this increasing consumer demand.

Bagged salads and value-added vegetables have posted particularly strong sales over the past year, following consumer demand for healthier and more convenient food. The amount now spent on veggie noodles and cauliflower rice compared with a year ago is off the charts, according to the report data. Spending on veggie noodles is up a phenomenal 409%, albeit off a small base. Meanwhile, cauliflower rice is up 113% versus the prior year.

Organic produce is also contributing to strong growth in the department, with sales up 7.6% in Q3 2017 versus a year ago. The study suggests continued growth opportunities remain as more organic produce moves into mainstream supermarkets and shoppers demand an assortment of quality products at more affordable prices.

Despite this encouraging report and positive outlook for the fresh produce category, many U.S. consumers admit in federal surveys and elsewhere that their fresh produce consumption isn't what it should be. The latest Dietary Guidelines for Americans advises adults eat the equivalent of 1.5 to 2 cups of fruit and 2 to 3 cups of vegetables daily.

Unfortunately, just 12.2% of American adults ate their recommended daily dose of fruit in 2015, and only 9.3% ate the suggested amount of vegetables that year, according to a report from the U.S. Centers for Disease Control and Prevention. So whether it’s the convenience of pre-sliced items and salad kits or the health halo of organic produce, the opportunity clearly remains for produce companies and retailers to help consumers increase their daily intake of fresh fruits and vegetables.