The long shelf life of canned goods and packaging innovations like ring-top cans aren't expected to keep the category safe from the growing popularity of fresh, chilled and frozen alternatives , according to the Food Marketing Institute, Washington.
Reports from grocers, however, are mixed. For some, the events of Sept. 11 impacted sales in this category as fearful shoppers stocked up on nonperishables much like they did prior to Y2K. And canned items are being purchased for family meals as more consumers choose to eat at home post-Sept. 11.
Pushing the sales of canned goods, stores like Wild Oats, the natural food chain based in Boulder, Colo., have pumped a lot of resources into intense marketing campaigns and promotions.
Wild Oats recently switched from a monthly advertising outreach that involved four ad inserts in local papers to weekly advertising using eight-page inserts.
"Since we began our aggressive marketing campaign, we've noticed a huge increase in sales in all categories, including canned goods," said spokeswoman Sonja Tuitele, who added that top store sales were up 5.7% in the fourth quarter of last year. "We had a slight dip in sales right after Sept. 11, but shortly after that, sales began picking up a lot." Another part of the chain's plan is to increase the amount of in-store demos, using both passive and active formats. "We just partnered with a demo company that will be hosting demos in our stores, sampling items like canned foods to customers in some situations and allowing shoppers to sample the products on their own in other cases," she said.
As Wild Oats carries only natural foods, the stores' canned goods are made with all-natural preservatives, she said, from manufacturers such as Healthy Valley Foods and Muir Glen.
In other, more mainstream stores, sales of canned foods are beginning to decline.
Tim Cummiskey, grocery buyer for Highland Park Markets in Glastonbury, Conn., said that while grocers may not be dropping prices on canned goods as of yet, they will eventually need to be more aggressive in this area to regain the share of the market that's being gradually overtaken by mass retailers.
"Stores like Wal-Mart and other mass retailers are doing well because of their low prices, but because most large supermarket chains can also buy canned goods in bulk, they're definitely in a position to be very competitive with those in the discount channels," said Cummiskey.
Ross Nixon, vice president of merchandising for Dahl's Food Markets, the 12-store supermarket chain based in Des Moines, Iowa, said he's noticed a discerning trend in the canned vegetable category that's been taking place over the past few years.
"We've noticed that sales of most canned vegetables have been slowly declining over the past few years while sales of frozen vegetables and other items have gradually increased," said Nixon. "Consumers are realizing that frozen vegetables and other prepared foods often taste better than canned products and frozen items don't tend to have high amounts of sodium or other preservatives that are often present in canned foods."
Eric Anderson, senior vice president of marketing for Fresh Encounter, the 30-store grocery chain in Findlay, Ohio, has seen a similar trend.
"Frozen foods have come a long way in terms of preserving the flavor and freshness of vegetables and other foods, and we've seen an increase in sales in this category," said Anderson. "Consumer interest in prepackaged meals hasn't taken away from the sale of canned goods in our stores but frozen vegetables have gone up while canned vegetable sales have diminished somewhat."
To help promote the sale of canned goods, Fresh Encounter encourages individual stores to design creative endcaps with a strong emphasis on cross merchandising, said Anderson. The chain frequently runs contests with a prize payout to the top three stores that produce the most creative displays.
According to Anderson, one of the most common displays include endcaps filled with green beans, creamed soup and fried onions for making green bean casserole, especially during holiday seasons.
"Our stores also do seasonal displays with fruits, vegetables and other canned goods and they'll include seasonal products like spring flowers and other items to make them more interesting," he said. "Some stores have even created a dinner-for-two setting on an endcap, complete with a table and all of the products the shoppers would need to purchase from throughout the store to make a complete meal, including canned items." Anderson said that despite some decline in the sale of canned vegetables in its stores, Fresh Encounter's private-label canned goods have been faring well.
When it comes to canned fruits and vegetables compared to organic and other fresh produce, Nixon said Dahl's consumer base has yet to make a notable shift toward organic foods and the stores' fresh produce sales have remained consistent.
"Our shoppers are still buying some canned fruits and vegetables and a similar amount of fresh produce, but there's still such a large gap in cost between organics and other items that our market just hasn't been won over yet."
Nixon added that if and when this price gap closes, he expects more and more shoppers to migrate toward organics, pulling them further away from canned goods. For now, Dahl's hasn't focused extensively on promoting canned goods aside from running occasional ads in store circulars, he said.
Sterk's Super Foods, a nine-store chain in Hammond, Ind., has experienced a somewhat different trend in its canned goods category. According to Kevin Copper, manager at Sterk's, sales of canned items in its stores haven't increased or decreased much at all in the past year, even with the introduction of new prepared meals. However, the one exception was a very small surge in canned goods sales immediately following Sept. 11. "Any consumers that were stocking up on canned goods out of fear from the terrorist attacks only did so for a short period of time, and there weren't large numbers of people doing this," said Copper. "Other than that, we haven't noticed any major changes in sales in this category."
Although consumers continue to latch onto the ever-increasing selection of fresh prepared meals and frozen entrees that feature vegetables, Copper said this category hasn't affected the sales of canned items in his stores.
"Some frozen or prepared meals have vegetables and other items that are also available in canned varieties, but our shoppers are still buying canned products just as often; they're just buying more of the prepared products, too," he said. "Sales from prepared meals are definitely up, but most people don't eat them for every meal and they still supplement their dinners with canned fruits, vegetables and other foods."
Copper expects many of the canned foods like pasta and other canned "meals" to continue to sell at the same pace in the future due to the demographic of consumers that typically eat such items. Adult consumers tend to purchase prepared or frozen meals for themselves or for family meals, he said. At the same time, they still buy a lot of canned pasta, SpaghettiOs, soups and other ready-made canned foods for their kids' lunches and other quick meals, since convenience is always a big issue.
While there are many types of canned foods -- including soups, pasta, meats, fruits and vegetables, to name a few -- FMI reports that vegetables are by far the No. 1 seller in the canned goods category in supermarkets around the world.
According to a 2000 FMI report, vegetables were most prominent due to the presence of well-established subsectors such as tomatoes, as well as the use of vegetables as the base ingredients for more complex meals.