In the competitive world of retail sales, produce marketers are leveraging emerging technology and fresh marketing strategies for fruits and vegetables. The potential rewards go beyond just increased profits; higher sales and consumption can significantly improve public health. North American retailers are well-positioned to benefit by embracing and implementing innovations that elevate produce sales.
At its 2022 convention in Orlando, the International Fresh Produce Association (IFPA) seized these opportunities with the debut of the IFPA Awards for Excellence in Retail Merchant Innovation. Vision Magazine recently invited winners from the five categories to discuss their innovative approaches. Several offered their insights below.
The IFPA’s award criteria state: “This award recognizes and celebrates the accomplishments of a vice president, director, sales manager, or equivalent position in the retail sector, who has shown passion and purpose in developing innovative strategies to increase produce consumption.”
In the 2022 category awards:
Brian Penfield of Sendik’s Food Markets in Milwaukee secured the 1-50 stores category.
Jim Gaylord of Wegmans Food Markets in Rochester, NY won the 51-150 stores category.
Barry Paul of Shaw’s Supermarkets in West Bridgewater, MA, took the 151-250 stores category.
Jeff Mallory of Hy-Vee Inc. in West Des Moines, IA captured the 251-399 stores category.
Victor Savanello of SpartanNash Co. in Grand Rapids, MI prevailed in the 400+ stores category.
The evolving industry sees pressing issues such as labor availability, food safety, sustainability and the introduction of new produce varieties shaping many contemporary practices.
Sustainability
In an effort to promote sustainability by reducing food waste, Sendik’s Food Markets, in Milwaukee, has introduced the “Humble Harvest” program. This initiative repurposes produce items that are near the end of their shelf life but still have value. Brian Penfield, director of produce, says, “So often we have that expectation of having the best produce available out there, that too many times we’re throwing away bruised apples or speckled apples that just didn’t have that eye appeal.”
Under the Humble Harvest banner, these imperfect items are packaged for ‘grab and go’ convenience and are offered at significantly reduced prices. Penfield notes, “When this started, my concern was that these items would reduce our sales. But in fact, in some situations, this program actually increased our sales.” For instance, salads, which enter Humble Harvest two days before their expiration date, sell because of the low price. “So, they’ll buy it on discount today, but in two weeks they’ll come back and get it fresh off the shelf.”
Wegmans Food Markets, Inc. in Rochester, NY, places a premium on the sustainable nature of local production. Jim Gaylord, category merchant, notes, “There is a real need for having local product whenever we can.” In Wegmans outlets, “local” may land New York-grown products into Massachusetts stores. “The corporate footprint has expanded — from western New York into Pennsylvania and now Virginia — but it’s more important to have a great product than to have it grown two miles from the store.”
Another sustainability frontier is indoor farming, a concept Sendik’s introduced in-store a year ago. Their state-of-the-art 60,000-square-foot location in Oconomowoc, WI, features a compact vertical farm. Shoppers can witness mature herbs emerge just four weeks post-seeding, offering a firsthand look into controlled environment agriculture (CEA).
Penfield notes, “We use it as a selling point so that now we can say, ‘Hey, look what we do in our stores and what else can we do?’ Consumers are just amazed by it. This drives sales. We’re looking at some other potential CEA activities in-store to help us drive that awareness and at the same time drive sales.”
Additionally, these freshly harvested herbs from Sendik’s vertical farm are utilized in the store’s salad bar, and a select quantity is also available for purchase in the produce section.
Lessons From Covid-19
A defining moment of our times was the Covid-19 pandemic, and IFPA’s award-winning retailers consistently highlight the pandemic’s impact on their industry. Although it brought about challenging periods, creative problem-solving approaches led to the emergence of new solutions that might persist for many years to come.
Victor Savanello, vice president of produce and floral merchandising at SpartanNash Co., in Grand Rapids, MI, notes that the pandemic demanded swift, innovative responses. He says that going through and coming out of Covid, SpartanNash was recognized for “how we were exemplary at providing our customers, our own stores and the consumers that shop in them, with product. From a service level perspective as a wholesaler, we didn’t lose a beat. I mean, we stayed in the high- to mid-90s from a service-level perspective through the entire Covid-19 timeframe by being flexible and being creative with what we offered our customers. We had to figure out how to sell what was out there, which in my opinion is what we had to do immediately. And, we did well.”
The pandemic reduced labor availability, but Savanello’s solution was to introduce pre-stocked bins, among other successful strategies, to minimize in-store labor requirements. One notable strategy involved selling significant numbers of apples in tote bags. This addressed two issues: firstly, consumers were reassured that their produce hadn’t been handled by others, and secondly, labor wasn’t required to bag the apples. These apples were packaged at the source and transported directly to the store floor. Before Covid-19, customers typically selected three or four loose apples. “Now they’re taking that tote bag apple, which has 10, 12, 14 apples in it,” says Savanello.
Additionally, in collaboration with Melissa’s, a Los Angeles-based produce distributor, Savanello enhanced floor utilization and decreased labor needs. Melissa’s provided a self-contained, overwrapped pallet master pack display of exotic fruits and vegetables. With such a variety, “I could never slot every one of those items. But if I have Melissa’s working directly with my buying team, and then with my stores, we can offer the full assortment of Melissa’s products that go to our stores, pre-made for each store. So, utilizing a master pack program allows you to expand your sales.”
During the pandemic, SpartanNash expanded its product range. The company reduced its stock of small herb clamshells due to its labor-intensive restocking process. However, with restaurants largely closed, there was a surge in home cooking. Savanello and his team recognized this shift and sourced larger herb packages for consumers. “We were looking for different ideas at the stands that we could then put in our stores and then sell those ideas to our customers; for them to accentuate the offering of their stores,” he explains.
Savanello continues, “Because people were coming into our stores looking for a solution that replaced restaurants and that indulgence. They weren’t looking to pull back on what they were eating. They were looking for us to help expand that for them, and I really feel like we accomplished that.”
Fresh-cut fruits and vegetables witnessed a significant boost in sales. “We were leaning on creating family-sized packages and offering fresh sides as meal solutions. We really went after trying to replace the restaurant because people were looking for that,” adds Savanello.
Packaging trends also evolved at Wegmans. “We try to follow consumer demand from two steps ahead,” notes Gaylord. “During the pandemic, there was an increased demand for packaging. That has continued. Once, everyone wanted bulk green beans.” However, this practice has diminished post-pandemic, and Wegmans envisions a future where all green beans will be pre-packaged.
Another enduring positive outcome from the pandemic era is the surge of floral sales. During Covid-19, homebound SpartanNash customers purchased floral products to enliven their spaces with fresh, vibrant flowers. Savanello noticed, and continues to see, significant growth in the floral sector. “We’ve actually increased our assortment, and we even have more higher-end items.”
Cross-merchandising
Regardless of the persistent presence of Covid-19, cross-merchandising remains a crucial strategy.
“We cross-merchandise every single week,” says Penfield of Sendik’s. “Typically, in our stores, the front position is a produce display that’s in place virtually every week of the year — save for perhaps Mother’s Day and Valentine’s Day — and we collaborate with our bakery, deli and meat departments, just aligning the plan for the week.”
For instance, when strawberries are in high demand, the bakery steps in “because at the end of the day, the person buying a strawberry is more likely to pick up angel food cake, and vice versa. So, it really helps us on both sides of the table to help us drive additional sales,” he adds.
Penfield says that, “Shopping should be fun. It shouldn’t be a chore. It should be something that’s rewarding and makes the experience more exciting for our guests.”
Included in this approach is Sendik’s Hatch chile pepper promotion. This commences outside the store with massive roasters methodically processing Hatch peppers. Though Hatch peppers weren’t traditionally popular in Wisconsin, Sendik’s five-year-long Hatch pepper promotions transformed an initial four-pallet venture into one-and-a-half trucks’ worth of sales in 2023. The Hatch pepper campaign is store-wide. The bakery showcases Hatch-spiced cornbread and Hatch-spiced chocolate chip cookies. Sendik’s deli presents Hatch peppers in enchiladas, guacamole, Pico de Gallo and a cheese dip. Meanwhile, Sendik’s meat department crafts “incredible” sausages and hamburgers infused with the pepper.
For Spartan Nash, cross-merchandising helps to champion home cooking, as Savanello points out. “Post-pandemic, we’re more inclined to drive ideas and inspire people to assemble meals. Or, pair an apple with a caramel dip and nuts.” Shoppers are encouraged to “assemble the whole package. Whether it’s pre-made sides, or pairing your asparagus with hollandaise sauce.”
Social Media
Leveraging various social media platforms, Sendik’s educates and excites its consumers. For instance, during the summer, Sendik’s accepted online pre-orders for Michigan blueberries, allowing consumers to secure their purchases in a market where demand outstripped supply. The company also aggressively promoted its Hatch pepper campaign online.
Regarding the education of consumers, Penfield notes, “I think it’s important to make the connection between the product we’re selling and where it comes from.”
A significant component of Wegman’s social media strategy is online shopping, predominantly driven by younger customers. Gaylord’s objective is to “supply as much product as possible online.”
Carrots on Campus?
Four out of Sendik’s 18 outlets are in the “Fresh2Go” compact format. Located on the Marquette University campus in Milwaukee is a 4,000-square-foot Fresh2Go, boasting a 16-linear-foot produce display.
While initially planning the Marquette outlet, Penfield pondered, “What do college kids eat?” To his delight, he discovered that Marquette scholars bought items such as asparagus and Brussels sprouts, not just staple products like lemons and apples. “We’ll try some different things — and it’s surprising how much college students today have the perception of what produce actually is.”
Taste
For IFPA’s 2022 Innovation winners, flavorful products are paramount. At Wegmans, the “pursuit of taste” defines what constitutes a successful produce department. Gaylord, who collaborates with a myriad of growers and numerous suppliers, emphasizes the importance of product taste.
When introducing new produce at Sendik’s, Penfield applies two criteria. First, “What does it look like? Because people are going to buy with their eyes; it goes back to that old edict.” Yet, this is immediately followed by the taste factor. “You can have the most beautiful apple in the world. But if it’s not a great eating experience, nobody’s going to buy it again.”
In recent times, the Honeycrisp apple has been a leader, but new entrants like Sweet Tango and Wild Twist have met with great success, meeting Penfield’s essential standards. Sendik’s social media team has repeatedly conveyed the narrative, and educational videos continuously play across Sendik’s stores.
Products with great taste profiles are likewise featured in Sendik’s: “Escape the Ordinary” campaign. “The aim isn’t just to put an apple out there for $2.99,” explains Penfield. “We try to tell that story highlighting its origin, the farmer and the journey of the fruit.”
Post-pandemic, Sendik’s resumed its in-store sampling, an approach Penfield’s team dubs “the power of the knife,” addressing the pivotal query: “What does this apple taste like?”
For Penfield, “There is nothing more exciting than introducing a new apple — and then the next week you sell two pallets of an apple that you’ve never sold before.”
The influx of various apple and grape varieties draws scrutiny from Savanello. In his apple acquisition discussions, the question arises: Why the array of varieties?
Savanello pinpoints that roughly 80% of apple sales are Honeycrisp. However, “We’ve got these expansive displays of other varieties that contribute 3%, 5% and 6% of apple sales.” Merchandising space’s profitability merits closer inspection. “We have 100 different apple types with varied attributes. Should we just be offering a red, a green and a yellow, and possibly a blush apple and leave it at that? Or should we incorporate all these variants?”
He observes a discrepancy in how the apple and grape sectors manage their flavorsome varieties. From an industry viewpoint, “I really think we need to assess it and discern the ideal model — and then adhere to it.”
Contrasts in approaches are evident. For grapes, SpartanNash stocks a white or green, and a red and a black variety, plus occasionally Cotton Candy or Moscato grapes.
Savanello makes note that the grape sector has generally faltered in explicit package labeling, losing a chance to specify grape types and features for easy consumer recognition. “If I’m a cultivator with an exceptional grape variety, I am ascertaining that I have a distinct PLU number, UPC, or another identifier for that grape.”
Savanello’s emphasis is on procuring the best varieties and grape sizes to prioritize the tasting experience over cost. “You’ll never discover a Flame in any of my outlets,” he asserts. “It’s about procuring the right taste. We’d rather source premium varieties for a superior taste profile than opt for a type that would lead us to a 99-cent price tag. That’s a race to the bottom, and that’s not our intention.”
Produce Packaging
Savanello offers two insights about produce packaging. First, packaging can promote the sale of larger quantities such as pre-cut fruits or 2.5-pound berry trays. These bulk sales are handy items easily placed on dining tables. “Secondly, in terms of packaging, we need to consider what’s eco-friendly.” For instance, he explains, some tote bags are compostable.
He also underscores the significance of packaging when it comes to organic items. “Our sector genuinely needs to find solutions to ensure we’re compensated for our organic goods, as any misidentification at the point of sale results in significant losses.” Savanello adds, “We’re looking in a big way for more opportunities for our products to be packaged — but packaged sensibly for that consumer.”
Wegmans’ Gaylord also emphasizes the importance of “taking a careful look at packaging. Some materials claim to be recyclable, but they’re not.” Thus, conscientious review is necessary, Gaylord notes.
Going Forward
Emerging technologies and evolving societal concerns are reshaping the produce sector and, undeniably, retail produce departments. The Covid-19 pandemic wreaked havoc globally. Yet, the produce industry reflects broader societal patterns. Every significant event, no matter how catastrophic, tends to yield some degree of positive outcome.
Age-old practices, such as replenishing ice in vegetable and pre-cut displays, will continue to entice consumers and are poised to stay relevant. The expansive produce industry will invariably honor its rich heritage while simultaneously embracing the finest and most flavorsome innovations.