Value-added produce is the big growth area when it comes to selling brands in the produce department, according to retailers and suppliers interviewed by SN.
a New York-based market research firm. That number easily doubled or tripled in 1993, according to industry observers, with the majority being marketed at retail in packages emblazoned with brand names.
"Value-added produce will be 25% of our business by the year 2000," said Jim Richter, director of produce at Marsh Supermarkets, Indianapolis. "We're selling more products with a brand label. They are readily identifiable by consumers."
But is it the brand identity that's driving sales of precuts, or the convenience they provide?
"Convenience and time are primary considerations for so many of our customers," said Sue Hosey, vice president of consumer affairs at P&C Food Markets, Syracuse, N.Y. "Consumers make choices based on needs and wants; brands aren't that important. Precuts are responding to consumers' demand for convenience."
Mike Burk, produce buyer for Big Y Foods, Springfield, Mass., said brand identity has helped fuel the growth of precuts. "Many of the brand names on precuts are also on products in the grocery and frozen foods departments," Burk said. "The one helps the other."
However, a reputable brand name in other departments isn't an immediate guarantee of success in the produce department unless the product stands up to consumers' expectations, retailers said.
"A brand name is only as good as the company's commitment to its quality image," said Fred Mooney, director of produce buying2Dmerchandising at Andronico's Park and Shop, Albany, Calif. Although he currently uses very little branded produce, Mooney anticipates significant growth in branded precuts.
"If branded precuts are marketed right, they can elevate brands in general," said Felpausch's Markwart. "Consumers will see the label on other products, and as long as they're getting good quality, they'll come back."