ORLANDO, Fla. — Shoppers may be watching their food budgets closely, but there are still plenty of opportunities to build sales in a well-run produce department, a group of four produce managers said recently at the Produce Marketing Association's Annual Fresh Summit Show, held here.
In a panel moderated by former retailer, consultant and business author Harold Lloyd, produce managers Sam Lawson of Rouses, Thibodaux, La.; Quinton Neely of Hen House Markets, a banner of Balls Food Stores, Kansas City, Kan.; Brett Warfield of Save Mart, Modesto, Calif.; and Harry Zayas, D'Agostino Supermarkets, New York, all agreed that organic produce was still performing well, despite the difficult economy, and that locally sourced and value-added produce items were continuing to grow rapidly in their stores.
The managers began by noting that their customers did appear to be changing their shopping habits in different ways, due to the economic downturn. Recent turmoil in the financial markets has hit particularly close to home for Zayas, whose store is near Wall Street in New York.
“A lot of people have lost their jobs or taken pay cuts,” he said. “They used to go to restaurants … but now they are going to supermarkets and buying a lot more, to stay home and cook. Our sales [at our store] have increased 10% … We've seen in the news that restaurants are empty right now.”
Similarly, Warfield noted that his customers were making fewer trips to the store each week, but that sales were up regardless, indicating that shoppers were both eating more at home and stocking up during their trips, possibly to save on gas.
“We're experiencing a decrease in customer count — down 1.9% — but the surprising part about [traffic] being down 1.9% is that my overall business is up 13.4%,” Warfield said. “So, what we're seeing is customers coming in less; however, they are buying more, making each trip more economical.”
But, while shoppers may be viewing supermarkets as a relative bargain compared with casual-dining restaurants or even fast food, it's important to continue emphasizing that value proposition. For example, Neely noted that his store was hosting more one-day sales lately. The sales, which take place during a 12-hour time frame and feature deep discounts on a small, select group of popular products, have proved to be a huge draw. Recently, Neely put grapes on special for 69 cents per pound as part of the limited, storewide sale, and went through 93 cases in 12 hours, drawing significant foot traffic to his department.
“We've been running more one-day sales, and customers are always asking me, ‘When are you going to run another one?’” he said. “I get a lot of calls on that.”
After a discussion about how they all worked to handle product recalls and foodborne illness outbreaks by removing product from shelves and notifying shoppers, the conversation soon shifted to specific categories and how they were performing in the current economy. The consensus that quickly emerged was that value-added produce, as well as organics and locally grown items — which they all defined as items grown within a 200-mile radius — were all still doing very well.
“I have seen an increase in locally grown products — about 34% since last year,” said Neely. “One of the things we've been doing is a ‘truckload buy.’ Each week, we put one or two super-hot items on a truckload buy … right in the front of our department. We promote a different item every week [in-store], and we promote locally grown products through farmers' markets that we set up on weekends on our store sidewalks. We also promote locally grown items through our local Community Supported Agriculture programs.”
Hen House Markets offers shoppers a place to pick up groceries from a local CSA program, Neely explained. By paying $25 per week for a membership in the program, which contracts with local farmers, shoppers get a weekly assortment of items, including local produce, meat and dairy products — often at a significant discount when compared with the regular retails on a comparable assortment.
The program offers members a lot of flexibility, Neely said. If a CSA member can't use one of the items in their weekly assortment, for example, they can swap those items with other members using a trading table set up in the stores during pickup days. After several years spent working with CSAs on a pilot basis, Hen House took the program companywide this year, Neely said.
At Rouses, all stores in the chain work with the state department of agriculture programs that promote Louisiana- and Mississippi-grown produce, but Lawson said that each store's produce manager is given the authority and the means to contract with local growers as well.
“One of the ways we try to support our local farmers is to put up banners with their photos, to let people know exactly who they're buying from,” Lawson said. Recently, working directly with a small number of local farmers and promising them consistent business from his store has helped strengthen those relationships.
“Fifteen years ago, I was probably working with 20 [local] farmers. Over the past five years, that's down to about four farmers,” he explained. “What we've done at my store level is team up with one farmer, and every growing season, we talk about which items they'll produce for us, and we purchase his whole crop. That way, I'm assured to have local produce from my area.”
Shoppers also continue to be drawn to the convenience of value-added produce, and the panelists all said that they had expanded the space they devote to bagged salads, fresh cut produce and similar items in recent years.
The “value” of value-added produce extends beyond convenience, particularly for people living alone or with small families, Zayas said. Pound for pound, a customer might be able to create a larger, less expensive salad by purchasing a head of lettuce along with all of the other ingredients they want to include, but with smaller families, a lot of that extra food will likely go to waste, he noted.
Warfield agreed, noting that value added was one of the best-performing sections of his department, and that through partnerships with his suppliers, he has built the category into a destination for shoppers.
“Value added is continually a double-digit grower for me,” he said.
Neely noted that he had increased the sales of Brussels sprouts in his store from two cases per week to 11 cases per week by loading them into Ziploc bags along with an attached recipe. The secret to the simple, store-made product's success?
“People are spending more time at home, and they're looking for new ideas for dinner,” he said.