NEW ORLEANS — Younger shoppers tend to be less sensitive to price premiums for organic produce, according to one discussion during the “Lessons from the Front Line — Retail Produce Manager Award Winners” panel here at the United Fresh Produce Association's 2011 convention and trade show.
Panel moderator Steve Lutz, executive vice president of the Perishables Group, noted that in 2005, organic fruits and vegetables had 2.6% dollar share of the entire produce category. In 2010, organics had a 5.4% dollar share, indicating steady growth, even during the recession. Lutz asked the managers what they were seeing at the store level with the organic category, and whether price was still a barrier to growth. Most of the panelists agreed that they were dealing with a bit of a generational gap.
“We have a lot of older clientele that shops in our area. … They'll just walk right by [organics],” said David Dozier, GFF Foods, Moore, Okla. “They're looking, basically, for something that's cheaper.”
By contrast, Bob Merritt, who runs the produce operation at a Quality Food Center near the University of Washington in Seattle, said that his customers “want organics and they are more than willing to pay for it.”
Generally speaking, younger consumers express more concern about the use of pesticides than older consumers, which could be a key factor contributing to the disparity.
“Younger families with small children are very concerned about bringing their kids up without pesticides,” noted Dave Heetderks, Spartan Stores, Grand Rapids, Mich. To that demographic with those concerns, price premiums are not as much of an issue.
Paul Ferro, produce manager for a Jewel-Osco in Chicago, said that there is a price ceiling that tends to put the brakes on individual items. “I've got customers that won't mind paying for a little-bit-more-expensive item,” he explained. “But … if it's between a 30- to 40-cent difference in price, then after that point, it's just dead.”
So, even as the organic produce category continues to post excellent national growth numbers, many department managers are still treading carefully with its expansion, monitoring local demand.
For example, Angels Camp, California was hit hard by the recession, and price is a major factor for many shoppers. Michael Crutchfield said talking directly to shoppers has been a good strategy for building the organic selection at his Save Mart produce department there.
“Whenever I see someone shopping [the organic section], I'm always walking up to them and asking what they're looking for.”
Other produce managers on the panel included Donald Courtright, Beale Air Force Base Commissary, Beale, Calif.; Ron Potter, Food City, Kingsport, Tenn.; Jo Poyzer, Woods Supermarkets, Nevada, Mich.; DJ Bertoldi, Big Y Foods, Wilbraham, Mass.
