ANAHEIM, Calif. — Although economists are now anticipating a rebound from the recession in 2010, the tough economic times of the past two years will have a long-lasting impact on how consumers shop, Bryan Silbermann, president and chief executive officer of the Produce Marketing Association, predicted during his annual State of the Industry address here at PMA's annual Fresh Summit convention.
Consumers are “spending frugally, buying differently. The recession is influencing what people eat, how often, and where. My friends at Food Foresight describe this as ‘an erosion of the country's psychology of affluence,'” Silbermann said.
For produce departments, this has meant a shift toward more basic commodities and produce items that can easily be incorporated into a variety of recipes, particularly at supermarkets and other retail formats serving low- and middle-income demographics. Many of these shoppers are opting for frozen produce instead of fresh. Consumers are also shopping sales more often, looking for coupons and turning to Internet sites to see who is offering the best deals prior to shopping.
“Don't expect this to change soon, because more than half of Americans feel the economy is actually getting worse,” he said. “Around the world, the experience is repeated, as consumers recalibrate from price and want to value and need.”
A shift from fresh to frozen could indicate that the produce industry and retail produce departments “still haven't broken the consumer perception that ‘fresh' also means more expensive, harder to prepare, with less consistent taste and quality,” he said.
Yet the situation is not entirely dire. Silbermann also noted that recent research conducted for PMA by the Hartman Group indicated that older consumers are embracing the concept of managing their diets to fuel healthy aging, and many are spending accordingly.
“Worldwide, as older consumers plan dinner menus, they're searching for functional foods that promote health and wellness while delivering flavor and convenience, in the store and the restaurant,” he explained.
Also, farmers' markets and retail outlets offering locally grown produce enjoy a “healthy halo” effect and outperform traditional channels when consumers are asked where they shop for healthy food, he added.
“That's why locally grown has accelerated into the mainstream, retail and foodservice operators adopting it in a big way,” he said. “Large buyers are going straight to the source, establishing networks of hundreds of local farmers, some even starting their own farming operations.”
Larger growers should recognize that part of the appeal of local foods is that foodborne illness outbreaks and contamination scares during the past several years have eroded consumer confidence in commercially produced food.
“Ethical consumerism is here to stay; food has become the new social movement. For a rising number of consumers, particularly moms, being connected with their food is a major force in our landscape. And they are increasingly moving online in search of that connection. They want to know from where their food came, how it was grown and if workers who handled it were treated fairly. Ignore this movement at your peril.”
In response to these trends, Silbermann said that larger growers and marketers need to focus on putting a face on their brands — by emphasizing the family farms that sell to them, utilizing new social media tools on the Internet to connect with shoppers, and ensuring that they consistently meet new standards of social expectation in terms of issues such as the environment.