Fresh Foods Are Not Realizing Their Potential

Consulting firm Deloitte surveyed 153 fresh food manufacturers and retailers and 2,000 consumers to understand why fresh food is lagging and the challenges ahead.

In the past two years, according to the survey, two-thirds of consumers have increased their spending on fresh food, including meat, poultry and produce, with 74% buying from one of the categories at least once per week. Fresh food overall isn’t being chosen as much as retailers and manufacturers would like, however. Retailers have created more shelf space for fresh foods—especially in produce, which accounts for 60% of perimeter growth—to meet the anticipated demand of a better-for-you lifestyle, but sales fell short of expectations.

Actually, it's center-store that is driving overall grocery sales, according to Nielsen’s 2019 Total Consumer Report. Brick-and-mortar CPG generated $813 billion last year, a 2.2% year-over-year increase, and most of the $5.4 billion growth in grocery was driven by center-store products such as snacks and candy.

Deloitte’s study reports that 80% of shoppers bought fresh foods for health benefits, and 77% sought preservative- and chemical-free options. But some consumers won’t spend more for locally sourced and organic items—even if they believe in those value propositions. 

Deloitte has identified three groups: “followers,” “forwards” and “neutrals.” Followers are a large segment of middle-aged shoppers with families, representing 47% of consumers. They are interested in healthier, sustainable options—but they view price as a factor. 

Forwards are generally younger shoppers and represent 31% of consumers who prioritize health and wellness over convenience and price. These shoppers will pay a premium for food that matches their needs.

Both the majority of Forwards and Followers list health and wellness and food safety as top considerations for purchases. The Neutrals who make up 22% of shoppers are mostly from older single or two-person households who prioritize price and convenience over health and wellness.

What percentage of your shoppers fall into each group?