CLOSE CALLS

TOM ZIND

If it's possible for a supermarket department to be too successful for its own good, fresh produce might be a strong candidate for the distinction.

That's the curious predicament that produce finds itself in as purveyors of an ever-expanding array of items billed as "produce companion products" seek display space for these products among the apples, lettuce and grapes.

Intrigued by the heavy, impulse-driven traffic that produce lures with its unique mix of bounty, color and excitement, marketers of everything from croutons and salad dressings to candy and birdseed are itching for the chance to capture a produce department ring. Increasingly, though, produce executives aren't necessarily sharing the enthusiasm. The reason: fear that an overabundance of packets, bottles, jars and bags of nonperishables will clutter the landscape and sully the department's fresh image, hurting it in the long run rather than helping.

"In my mind, you want to tell your customer that you're in business to carry the finest produce, and when you overload the department with nonfresh you run the risk of telling the consumer that you'll do anything it takes to make a dime," said Chris Van Parys, vice president of produce operations for Farm Fresh Supermarkets, Virginia Beach, Va. "If you're just in the game to get more sales, handling a lot of it is the way to go. But if you want to build an image and convey to the consumer that you're the premium provider, you have to be extra careful about what you bring in."

Lee Arthur, produce director for Ukrop's Super Markets, Richmond, Va., said informal shopper surveys that he's seen suggest some consumers are turned off by too much nonfresh in produce. "Some have complained of the department looking too junky, and not being able to find what they wanted because the department was just too busy," he said.

When it comes to selecting items for inclusion, one of the main criteria managers use is relevance. Ideally, executives say, the item should be a legitimate companion to fresh produce in some way, helping spur sales of fresh fruits and vegetables by adding value in terms of preparation, usage or flavor. Chilled salad dressings or dips, guacamole mix packets, croutons and strawberry glazes are examples of products that pass that test. Innovation continues in that category; one of the newest entrants is Sunkist Almond Accents, merchandised as a salad topping.

"Croutons are the classic companion item and one of the few that really cross over well," said Larry Roberts, operations supervisor for Penhollow Markets, a three-unit Thriftway chain in the Seattle area. "Produce is the best place in the store for them -- right next to the tomatoes or the lettuce."

Anxious to maintain or boost margins, however, retailers may often be tempted to generously expand the number of complementary items. For example, selections often include higher-end, or otherwise differentiated, versions of items that might be carried in grocery; they may also qualify as companion products. Van Parys said he's sold extra virgin olive oil, bulk spices and certain jarred fruit products in produce.

"The key is that either the item not cross over with something sold in grocery, or that it's of higher quality than what's being carried in another part of the store," he said. "Our Orchard Select 26-ounce jarred fruit, for instance, retails for $2.99, a higher price than canned fruit in the grocery section, but it's of a premium, higher-quality grade."

But jarred fruit didn't make the cut at Penhollow Markets. Roberts said the store discontinued a line of upscale, national-brand peaches in glass jars. It proved to be too similar to canned or jarred fruit sold in the grocery aisle and thus was redundant -- a key criterion for deciding what nonfresh items to carry in produce.

"It sold well, but it didn't fit our image and it wasn't the kind of product we wanted to feature in the department," he said. "It might seem like an illogical call, but the thing is the larger picture -- the look of the department."

The lure of high margins with low shrink, though, remains seductive for produce managers used to contending with a shrink level that's among the highest in the store. Products that can be placed and essentially forgotten about without the worry of the ticking time bomb of perishability offer some appeal to harried produce managers. The catch, however, is that such products can suffer from neglect and end up gathering dust if they don't move, further compromising the fresh look of the department in the process.

For that reason, positioning of companion items is key. Some retailers advocate interspersing them among the fresh products they accompany. Critics of that approach, though, say that can spawn a cluttered look that may turn shoppers off. In the other camp are those who like to confine them as much as possible to their own area, giving shoppers the added benefit of consistently knowing where to look for them.

"You have to plan the produce department well because produce is such a seasonal thing, and having to fit nonperishables in with that can be challenging," said Jim Penhollow, owner of the Penhollow Markets chain. "Nonperishables are the same all of the time, on the other hand, so I think it's better that they go into fixed areas where they can be found day-to-day."

For all their potential drawbacks, nonproduce items can sometimes help liven up produce departments. Product marketers eager to gain a spot in produce frequently sponsor product demos that can draw traffic and prompt shoppers to spend more time in the department. The demos, of course, also help ensure that the product doesn't just take up valuable space.

"You're not going to get Sunkist to do an orange demo, but you can get companies like Galaxy Foods to do a soy cheese demonstration," said Ukrop's Arthur. "Companion items can allow the produce departments to do demos and add excitement at the expense of the vendors."

But with more suppliers clamoring for the attention of produce executives, dangers lurk in the amount of time that can end up being devoted to managing products which account for just 1% or 2% of department sales. "There's a lot of duplication out there and we get a lot of vendors coming to us," Arthur said. "We've tried to cut back the number recently because we found we were spending too much time trying to sort through everything."

Given the department's popularity, it seems unlikely the onslaught of products looking for a home in the produce aisle will abate any time soon. As a result, produce executives say they're learning to hold their ground. For eager suppliers, it means less opportunity for products like birdseed, plant fertilizer, charcoal, firewood and drinking water.

"We get calls all the time from people saying their products should be in produce, and while those products may inflate sales, at the end of the day, I want to be judged on turns in produce," said Rod Sobczak, produce director for Copps Distributing Co., a Stevens Point, Wis.-based retailer owned by Fresh Brands.

WORKING IT

One of the keys to winning with nonfresh items in produce is proper department positioning.

An increasingly popular tactic is to merchandise companion items on the backs and sides of slanted euro tables. Stores in the Farm Fresh Supermarkets chain are outfitting the tables with frames on which related products can be more effectively merchandised. "Since sales per square foot is important, we've decided to use the previously open backs and sides of the tables to merchandise products like apple chips and dips," said Chris Van Parys, vice president of produce operations for Farm Fresh. "Before, we used spinner racks and three-shelf high racks for the products."

The three stores in the Palo Alto, Calif.-based Draeger's Supermarkets chain utilize shelves built above island displays to merchandise everything from croutons to sauces to gourmet olive oils. "It gets the product out of the way, but keeps them visible at the same time," said co-owner Tony Draeger.

Lee Arthur, produce director for the Richmond, Va.-based Ukrop's Super Markets chain, said he's moved away from using wire racks and shippers to merchandise companion items. "We've moved to spring-loaded racks to keep the product faced, and we're also using more endcaps to merchandise the products," he said. "We want a low-profile, nice clean look for the products."

Some nonproduce categories have expanded to the point that they're getting their own merchandising areas. One of the more notable is the expanding line of soy products. Arthur said many of his stores devote 24 linear feet of shelving to merchandising the products in the "Healthy Alternatives" section.

The trick to merchandising nonproduce items lies in making sure they're visible, but not at the expense of the fresh product.

"When you have a display that contains 30% nonperishable, it can be a problem," Van Parys said. "You have to ask yourself at what cost to your image that sale is coming."