Strengthen Your Organics Program in 2017

Recently, The Packer released a new publication that speaks to the dynamic growth of Organics in your Produce Department. The “Fresh Trends Organic Special Report” addresses consumer trends and highlights top Organics categories—a nice “tutorial” for all of us as we enter 2017 and encounter a year when Organics sales will exceed $5 billion. Editorial Director Greg Johnson begins with this interesting quote that explains the relevance of the publication: “Organic produce sales will likely close in on 10% of overall retail produce sales in 2017 and surpass $5 billion in retail sales, according to Fresh Look Marketing data. But you already know organic is big and growing. The ’Organic Fresh Trends Special Report’ looks at organic produce trends, quotes retailers, gives information on Millennials and Generation Z, and offers specific marketing, merchandising and handling knowledge for more than a dozen top organic fruits and vegetables. And we use targeted Fresh Trends consumer survey data on organic consumer behavior.”

So, let me share some of this publication’s highlights to help better prepare for the growing importance of Organics sales in your department.

MERCHANDISING TIP OF THE WEEK.  Melissa Shipman, a contributor to the Organic Fresh Trends Report, outlines the top Organic categories and how they contribute to the incredible growth of Organics in your Produce Department: “ The organic category is growing,” begins Shipman, “up to 7.5% of overall retail produce sales—and while grower-shippers are ramping up production in many areas, supplies are still a limiting factor for some retailers. Those growers have largely focused on production of the top performers. Packaged salads, berries, apples, carrots, tomatoes, lettuce, bananas, avocados, citrus and grapes made the Top Ten list for the year.”

Packaged Salads - (From the Melissa Shipman article) Packaged salads are at the top of that trending vegetable list, contributing 23.2% of (organic) category sales, according to information from Nielsen Perishables Group. Organic salad producers are aware of the significant strength of this category, as well as recent growth in salad kits, especially chopped salads. In fact, Nielsen data shows that the salad category grew 1.4% over the last thirteen weeks.

Carrots - Steve Lutz, vice president of marketing for CMI Orchards and past Caito Foods Seminar Guest Speaker, reports that “items such as organic baby carrots end up in a high percentage  of shoppers’ baskets.” Lutz further explains: “What we know is that organic products like apples, baby carrots, packaged salads—or mainline categories in other words—tend to be the entry points for consumers. Nearly all organic buyers hit these primary categories.”

Berries - According to information from Nielsen, “(organic) berries contribute over 10% of the category sales and saw a nearly 20% increase in volume sales this year.” Naturipe Farms, one of the premier berry growers used by Caito Foods, is “expected to increase organic blueberry availability this year by 100% with new production in Chile, along with adding new organic plantings of blackberries and raspberries in Mexico for the winter and new organic strawberry production in Florida and southern California.”

Grapes and Bananas - From the report: “Organic bananas saw an increase of nearly 30% for both dollar sales and volume growth for the year ending October 1. Twelve percent of shoppers acknowledge to choosing organic bananas every time, up from just 8% last year.” Grapes are seeing growth as well. “Organic grapes contribution to the overall category sales is a little over 4%, with a 2.4% increase in dollar sales over last year.”

Apples - Brianna Shales, communications manager with Stemilt Growers, speaks of a “new-look” organic apple assortment: “Right now, organic production is leaning toward new, modern varieties, such as Pink Lady, Piñata and Honeycrisp versus increases in classics like red delicious.” And Steve Lutz of CMI concurs: “If we have the supplies and retailers have the displays, consumers keep on buying. So we expect a strong organic year.”

Other Categories - From the report: “Tomatoes, lettuces, avocados and citrus round out the Top Ten list. All have seen significant growth over the past year: Organic tomatoes saw a 19.2% increase in volume sales growth for year ending October 1. Organic lettuce increased over 8% for both volume and dollar sales. Organic avocados saw a whopping 51.5% increase in organic volume for the year, and organic citrus enjoyed a 38.6% increase in organic dollar sales.” Another item to watch for: organic jicama.

Millennials, Gen Z and Organic Purchases - CMI’s Steve Lutz comments: “The purchase drivers for organics extend deeper than just perceived health benefits—and that’s where the Millennials stand out as organic consumers. While Millennials recognize the perceived health benefits of organic foods, they are also much more likely to select organics because they place  a higher value on sustainability.” Value is also a major consideration. Joe Pulicicchio, produce and floral director for Town & Country Markets (Poulsbo, WA) addresses this: “Younger consumers are very interested in healthy food and a clean environment. They are very willing to support organics, but they are a little more frugal about it. They don’t have huge budgets, but they do tend to spend a larger portion of that budget on food. They will pay a little extra—but not double. Retailers are doing their best to market organics at a price point Millennials are willing and able to accept, and as supplies increase, prices have come down.” Millennial shoppers also require a higher variety of organic items and expect more information about the items they purchase.

Great info for us all and Happy Selling