Retailer Features / Merchandising Features / Marketing Features / Trend Features

Walk Down the Aisle: It's in the bag

March 29, 2012
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PLBuyer secret shoppers sent to four stores across the country in late summer found more private label produce offerings than they did branded produce.


Private label items, usually bagged, are proliferating in the produce aisle

PLBuyer secret shoppers sent to four stores across the country in late summer found more private label produce offerings than they did branded produce. In some stores, such as a Wegmans in Maryland, most of the produce available was either Wegmans private label or unbranded, unpacked items, one shopper reports.
In-store advertising for produce items was evident in some stores but not in others, while three of the four displayed private label produce adjacent to branded items.
On-shelf price comparisons between private label and branded products were only seen at a Hy-Vee’s in Prairie Village, Kan.
Traci B. was quick to notice a large sign at Wegmans comparing Wegmans prices for items such as bananas, baby carrots, strawberries, broccoli crowns, diced peach bowls and applesauce with similar offerings at Giant Eagle and Giant
The shopping trips taken by PLBuyer’s secret shoppers illustrate that private label is still evolving into new produce aisle offerings as produce itself evolves from unpacked to packaged products.
Shoppers were asked to seek out bags of private label potatoes, baby carrots, cut-fruit bowls and lettuce. They often had difficulty finding these in branded form, seeing only unpackaged, unbranded produce.
At Wegmans, for example, a secret shopper spotted two different types of bagged Wegmans potatoes but no national brands. Wegmans also had both Wegmans baby carrots at $1.29 a bag and Wegmans organic baby carrots at $1.59. Kroger had its private label baby carrots at $1.49 a 16-ounce bag while Safeway’s private label carrots retailed for $1.99 a bag.
The potato category includes more varieties than do some other produce categories. Secret shoppers found everything from classic russet potatoes in five-pound bags to Yuokon Gold and salt varieties. Private label potatoes were available at all four stores.
At Hy-Vee, Mike G. found Hy-Vee russets for $3.68 for a five-pound bag compared with $3.99 for a Green Giant five-pound bag.
Traci B. went to a Safeway in Frederick, Md., to find Safeway red potatoes at $3.99 for five pounds and an unbranded five-pound bag of russet potatoes for $4.99.
Sarah C., who shopped at a Kroger’s in tk, Ariz., saw Kroger bagged lettuce in a 12-ounce bag for $1.79 compared with a 12-ounce Dole bagged lettuce for $2.99.
Visiting two stores for the same aisle gave Traci a chance to compare Wegmans with Safeway.
“I find that Wegmans produce is very good quality. Prices are higher but the sale items are always a good deal,” she writes. Regarding Safeway, she writes in her shopping diary, “Safeway products are so-so.”
WHAT THE EXPERTS THINK
Two tug-of-wars are quietly at play in the produce aisle. Produce buyers need to be aware of each and carefully pick their sides to maximize sales in this rapidly changing category.
The first is being brought about by consumers interested in the local food movement. Worried about transportation costs and pesticides used on larger farms, some consumers, especially Gen Y shoppers, are searching out locally grown produce. Larger growers are responding by doing more educational campaigns directed at consumers, assuring them of the quality of produce they put on supermarket shelves.
Larger growers have “a lot of interest in telling their story,” explains Mike Chirveno, a consultant with ClearVision Consulting, a Kansas City-based firm that works with large growers. Growers are open to providing educational materials to retailers designed to encourage produce sales in traditional stores, he notes, so perishable buyers should be on the lookout for such offers that could stretch their in-store marketing budgets.
The second battle is between private label produce and branded produce. As national brand powerhouses such as Dole have branched into new produce categories, retailers have come to realize there’s also money to be made by expanding their private label produce offerings.
“As more produce is packaged and, in some from or fashion, value is added, the uniformity of the offering lends itself more to private label,” explains Bruce Axtman, president and CEO with the Chicago-based Perishables Group. “The trend is toward more packaged produce, more value-added, washed, pre-sliced, cut, ready-to-steam. As those things happen, it does lend itself more readily to private label.”
While these cross current swirl around the produce world, one positive for sales is that consumers perceive fresh fruits and vegetables as healthier than processed foods. With the emphasis today, from the White House down to local communities, on healthy eating to combat the nation’s obesity epidemic, produce sales are rising. U.S. vegetables sales, both fresh and canned, have risen 22 percent from 2005 through 2010 and sales should grow at a 6.2 percent compounded annual growth rate through 2015, predicts Mintel Group Ltd., Chicago. Sales for the U.S. fresh vegetable market totaled $45.2 billion in 2010, Mintel estimates. Roughly 59 percent of vegetables sold in supermarkets are unbranded, Mintel says. “Mintel expects fresh vegetable sales to continue to climb, reaching $62.3 billion in 2015,” its March 2011 report on vegetables states.
Looking at what sells in the produce aisle, Mintel notes that “salad mixes are the sales leaders in the food, drug, and mass merchandisers, excluding Walmart (FDMx) vegetable market, with the top two positions taken by Chiquita Brands International, with its Fresh Express salad mix brand, and Dole Fresh Vegetables, with its Dole salad mixes, though both companies gave up share in 2009-10 to private label salad mixes. Larger retailers such as Safeway and Kroger have developed extensive private label salad mix lines.”
Speaking with PLBuyer earlier this year, Jamey Friedman, president of distributor and packing facility Freshouse, Salisbury, N.C., advised that stores should commit to private label in as broad an array of produce items as they feel comfortable with, to build brand loyalty.
“It’s consistency,” he says. “You’re pushing the idea that your product’s best, and that you have control of your supply chain because it’s on a lot of the packaging in the store. The consistency shows control, and it probably increases your buying power, too. It sends a message to the customer that you’re committed to it.”
Friedman has seen cases where retailers essentially come up with two different lines of private label produce-one a label that’s branded for its consistency and the other more of a value brand. “They might use a different spec in that [value] label,” he says. “The off-sized stuff goes into another label with a better price point.”

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