Produce future at issue in dynamic marketplace - Produce Marketing Association convention review

DSN Retailing Today, Nov 10, 2003 by Mike Duff

ORLANDO -- Is fresh-cut fruit going to be the next big thing in the produce section? That's what the industry was saying at the annual Produce Marketing Association convention held Oct. 17 to 21 at the Orange County Convention Center.

At least one workshop seminar was devoted to the prospects for vendor-processed fresh-cut fruit, and most show participants seemed fairly optimistic about the segment, particularly with the advances in film technology and the product-quality improvements they have provided.

But the next generation of hot products wasn't the only subject addressed at a food convention that had plenty to chew over.

Flavor has become a big issue in food generally and at a PMA workshop session entitled "Supermarket Retailers: From Our Perspective," Bruce Peterson, Wal-Mart senior vp, gmm, perishables, pointed out that in an era when a wider variety of more intense-tasting products was spreading through food purveyors, both the retail and vendor ends of the produce industry have to come to grips with the idea that they are competing not only amongst each other but with everything in the store when it comes to luring purchases from consumers.

In some ways, the flavor trend is in a head-on collision with recent produce developments. The rush to add product year-round has resulted in retailers making out-of-season produce available to their customers. The problem is that too many of those off-season products, fruits particularly, are virtually without flavor. As a result, the panel, consisting of Peterson, Peter Hastens of Carrefour, Dave Corsi of Wegmans Food and Pharmacy, Leonardo Miyao of Grupo Pao de Acucar/CBD and James Parker of Whole Foods Markets, said the industry must turn to merchandising seasonal fruits and vegetables that are clearly better during their harvest seasons, and even eliminating those off-season products that just don't provide the level of taste consumers find acceptable.

Other issues that retailers and vendors will have to confront in the upcoming months include effectively positioning locally grown produce in their stores. A connection to community is critical both for national and regional food retailers, as it reassures consumers that each store operates in concert with local sensibilities. "Marketing that is so very, very powerful," said Peterson.

Of course, buying on a regional or even store-by-store level complicates logistics and creates challenges, particularly when it comes to product consistency. Thus retailers have to educate and support the people who are vital to executive local buying functions. "It's all about commitment, and it's all about standards," said Corsi, Wegmans' vp of perishables.

Produce is likely to become a more issue-oriented business. Concerns regarding issues like wellness are impacting mainstream retailers, but already environmental concerns, for example, are having an effect among the specialists, where such trends first register. "Sustainability is a more important factor in our purchasing decisions," said Parker, a national administrative team member. And what is affecting Whole Foods now may well evolve into a consideration in the mainstream.

Brian Gannon, director of produce at Big Y supermarkets, and Jay Schneider, assistant sales manager, produce, at Albertsons' Acme division, took on the issue of organics among mainstream retailers in the session, "Use Organic Labeling to Your Advantage." While they both asserted that organics provide growth opportunities, the most effective way of approaching that part of the business has to be worked out and partially on a retailer-by-retailer basis.

For instance, when it comes to the decision of whether or not to segregate organic products, individual factors can dictate the better policy. Government organic standards once seemed to require product segregation to prevent comingling with conventional items. But with more retailers using packaged organic products, the comingling problem becomes less critical.

Gannon said that Big Y looked at the major organic specialists and determined that they don't segregate organic and conventional products in their produce displays. When Big Y began testing, the company saw sales increases when it integrated organic items with like conventional items. Essentially, he said, his customers were not using the segregated department as a destination. Rather, they wanted to see a range of choice. With organics separated out, Big Y's customers had to shop twice for the same item. With organics integrated, they could compare and make a decision conveniently, and that scenario translated into better sales for Big Y.

Still, appropriate merchandising was an important foundation for the company's success. "We developed a very good signage program," Gannon said.

Conversely, at Albertsons' Acme division, having at least part of the organic produce assortment drives sales more successfully. Not only does the segregated display provide a destination, it also helps with operational issues such as making sure that organic shoppers always find all the products the store carries. "Segregating gives the produce managers a little more discipline. It forces them to fill," he said.