Shoppers may be trimming back their food budgets in this difficult economy, but the exotic produce subcategory is still showing a lot of promise, retailers and suppliers told SN. Some retailers could still benefit from growing the category and building shopper interest by offering a relevant selection and providing plenty of information.
“The exotic produce we carry are ethnic items, which means that many [of our shoppers] consider them as staples in their diets,” said Joe Hardiman, Produce Merchandiser, PCC Natural Markets, Seattle. “Therefore, the economy and tighter household food budgets have not affected the sales of these items.”
A representative from Associated Food Stores, Salt Lake City, however, said its stores have experienced declines in exotic produce sales.
“Although exotic produce items are a small contributor to our total produce sales, it's probably down somewhere between 25% to 30%,” said Bill Price, executive director of perishables, AFS. “It's just a trade-down effect that's relative to income, usually.”
Still, suppliers are confident in the category's growth and potential because consumers are cutting back on restaurant spending and are using that money in supermarkets.
“Initially, we were seeing some retailers cut down on their product mix, mostly in the subtropical fruits, which have the highest shrink level, so several months ago we started a campaign to share the ‘best sellers' list with our clients so they would be able to stock those items which consumers consider their ‘tried-and-true' variety items,” said Karen Caplan, president of Los Alamitos-based Frieda's.
“This has been a successful strategy for many of our client-partners. Bottom line, consumers will buy specialty produce, but just different items. Consumers still want to pamper themselves and make fun and interesting home meals. We do have one national client [that] has actually expanded their variety at this time, to set themselves apart from their competitors.”
Currently, mangosteens from Thailand, rambutan from Hawaii, Guatemala and Mexico, and dragon fruit from Hawaii are the newest exotic fruits in the U.S., suppliers agreed.
“Sales [of mangosteen and dragon fruit] are good, but supply of them has kept the price pretty high,” said Robert Schueller, spokesman for Melissa's Produce, Los Angeles.
Caplan said she believes the best way for retailers to maintain interest in exotic produce is to make sure they have informational labeling and signage.
“Consumers will only purchase items that they know what to do with,” she explained.
“It will come as no surprise that Frieda's has been providing informational labeling on most of our products since we developed our first labeled products in 1972, which were sunchokes and macadamia nuts in the shell.”
Schueller agreed that food budgets are being affected more at foodservice and restaurants than at retail.
“Sales of exotic fruits have been steady, no major drops seen yet; however, we have seen a slight drop in foodservice, not retail, sales,” Schueller said.
“Exotic fruits have the tendency to be more expensive, and expense is definitely a consideration, but now, with people eating out less, the chance to explore new exotic produce items has some more opportunity here.”
Understanding the changing demographics of the local community can be beneficial to retailers working on their exotic produce selections, because, as Hardiman pointed out, many different ethnicities view “exotic” produce as dietary staples. Schueller added that offering an exciting shopping experience and taking advantage of seasonal opportunities to capture “peak of the season” flavors will also help build the category.
Schueller said Melissa's does expect the exotic fruit segment to grow.
“Such exotic drivers in the category are Korean pears, mangoes, papayas, plantains, red bananas, cherimoyas, Quick Crack Coconuts and young coconut, which have all seen wonderful growth in the past few years and this year as well,” he said.