BEYOND THE GARDEN VARIETY

DONNA W. CROTHERS

As a category, packaged salads represent one of the biggest success stories the produce department has seen. But are consumers ready to go beyond the traditional iceberg lettuce, cabbage and carrot mixes to spend more green for specialty greens?

SN interviewed retail produce executives about the current demand for products ranging from organic or exotic salad mixes to salad kits containing dressings, croutons and other accoutrements.

Many produce experts agreed that while the garden variety iceberg lettuce mix is the workhorse of the fresh-cut salad section, the higher rates of growth are coming from newer and more unusual salad blends.

Although none of these products may make up as large a chunk of packaged salads sales as garden salads, retailers see them taking a larger and larger share of the fresh-cut salad category.

"I think the same thing that happened with head lettuce will happen with the garden salads," said Jack Lanners, director of fresh fruits and vegetables at the 25-store Glen's Markets chain in Gaylord, Mich., noting the decline in head lettuce sales as garden salads have grown in popularity.

"Garden salad sales will go down as people get the opportunity to try other salads. Specialty salads represent 60% of the salad mix sales, and I think they have room to grow to 90%."

Lanners noted that the fresh-cut category, including all vegetables and fruits, is growing at 15% per year and represents 9% of Glen's Markets' total produce sales.

Specialty mix growth is also outpacing the more conventional salads at Scolari's Food & Drug Co.

"We are seeing a larger growth rate in that area," said Scott Streeper, director of wholesale operations and produce buyer at the 20-store chain based in Sparks, Nev.

"In the regular garden salads, I am seeing a 15% rate of increase, and in the specialty salads -- the kits, the Caesars, the Orientals -- I am seeing 50% increases."

The garden salads, however, are growing from a much larger base, Streifer noted. He estimated that specialty salads account for about 25% to 30% of total value-added salad sales, with garden salads and coleslaws making up 70% to 75%.

"The garden salads are a high velocity item that turns itself," he added.

"The bulk of salad sales are still in your mainline items," agreed Bill Earnest, produce and floral merchandising manager for Thriftway and Red Apple Store Groups, a 90-store subsidiary of Associated Grocers of Seattle.

Earnest estimated that specialty salads account for less than half his sales and item count in the packaged salad category, although "it is starting to pick up," he added.

Some chains, however, find specialty salads moving into the majority, especially in areas such as California where packaged salads originated.

For Don Bevilacqua, produce buyer at Nob Hill Foods, a 26-store chain based in Gilroy, Calif., specialty salads are the star of the packaged salad case, accounting for more than half of sales.

"The chopped iceberg mixes probably amount to 35% to 40% of our sales," he said. "The baby green salad mix is probably our second or third largest mover," with about 264 cases of packaged baby leaf lettuce mixes sold through the Nob Hill chain each week. On top of that, the chain sells 400 cases of bulk baby leaf lettuce mix every week.

In other areas of the country, the specialty salads have not caught on as well.

At the Wade's Supermarket chain based in Christiansburg, Va., customers "still have a tendency to buy the top four or five sellers," said Larry Gibson, operations manager for the 20-store chain.

"I have 23 varieties of salads because my competitor has 23 varieties, but [specialty salads] are not a moneymaker." Many produce buyers and directors agree that the popularity of specialty salads depends greatly on demographics.

Most think the selection in the packaged salad case should be established on a store-by-store basis to cater to the clientele in each store.

"The popularity of specialty salads depends on the store," says Kenneth W. Green, vice president of produce merchandising and procurement at A&P, Montvale, N.J.

"It gets back to knowing the store's demographics. Overall, more of the sales are in the basic salads, but the specialty salads are growing."

"In certain stores, I do well with specialty salads." said Jeff Witt, director of produce operations for the 17 Smith & Woods Foodcenters of Maryville, Tenn. "I have some stores with higher end trade or more tourists, and the exotic salad mixes do pretty decent business in those."

Overall, Witt estimates that 20% to 25% of his packaged salad sales are the specialty salads, with packaged salads making up 2% to 3% of all produce sales.

"You don't have the growth here you would have in Boston and New York," he added. "Not all the stuff works in every store." It's the same story at Scolari's, Streeper said. "We have three or maybe four stores where people really buy the specialty salads The others are more meat-and-potatoes stores."

Streeper advised being cognizant not only of the demographics of each store's clientele, but also of consumer requests. For example, a lower-income store with many customers in certain ethnic groups might have demand for an Oriental or Italian salad blend despite the higher cost.

"We need to go through and check what type of ethnic groups are shopping our stores," Streeper said. "The other thing is being very aware of what your customers are asking for."

Just as the demand for specialty salads depends on store demographics, so does the popularity of different types of salads. But some seem to have universal appeal and are becoming almost as mainstream as the iceberg lettuce mix.

A good example is the Caesar salad mix with romaine lettuce and, often, croutons and dressings.

For example, Bevilacqua of Nob Hill cited his No. 1 salad kit as the Caesar from Fresh Express, and he added that all Caesar salads have performed well. "Caesar is a great mover, with or without the salad dressing. It is really mainstream now," he said. Witt of Smith & Woods Foodcenters agreed: "I would say Caesar is the most popular specialty item." However, he noted that basic salads and coleslaw far outsell Caesar salads.

And Gibson of Wade's Supermarkets noted, "The regular salad, precut coleslaw and regular spinach in the bag, without dressing, are the fast movers although the Caesars are picking up."

Earnest of Thriftway agreed that Caesar salads "continue to show super growth," and he also has found bulk salad mixes featuring exotic lettuces such as lolla rosa, arugula, radicchio and others to be high-growth items.

"We have done a great job with the exotic salad mixes. Even though it is relatively high-priced, people can pick exactly how much they want for dinner, and I think that may be the attractiveness of bulk exotic salads," he said.

"We are finding great success with the salad kits" that include dressings and other items to add to the precut salad, said Lanners of Glen's Markets. A new item, Dole's Lunch for One salads, also has been well received, he added. "It appeals to the consumer who wants a single serving, and the bread items [included in the package] are a little twist that creates some uniqueness."

While many retailers carry more than one brand of garden salad or other fast-moving items, several commented that they prefer to carry only one brand of any variety of specialty salad.

"On the mainline garden salads, we have a couple of suppliers, but on specialty salads, we try to keep it to one supplier. You have to be sure you don't oversaturate yourself," advised Earnest of Thriftway.

Lanners of Glen's echoed: "We concentrate on the Dole line."

Just as Caesar seems to enjoy widespread popularity, organic salads were mentioned by several retailers as less popular due to higher pricepoints and shrinkage problems.

"We don't get much into the organics," said Streeper of Scolari's. "We just don't have the market for it, because it is generally pretty pricey. And organics go bad much faster than other salads," he added.

"I have tried organics, and it hasn't gone anywhere in a hurry," said Nob Hill's Bevilacqua. For the time being, the chain has discontinued organic specialty salads due to shelf life problems.

And Thriftway's Earnest agreed: "We have just a few stores that carry bagged organic salads. It works only in stores that are committed to an organic program."

Price is the predominant reason retailers give for the sometimes slow movement of specialty salads.

"Many of our customers say, 'I'm not going to spend $2.99 on a specialty salad when lettuce is 49 cents'," said Gibson of Wade's Supermarkets.

"Whatever people want to say, price is still a factor" in sales of specialty salads, said Scolari's Streeper. He noted that a 12-ounce bag of specialty lettuces such as arugula, baby red oak leaf and radicchio might sell for $4.29, quite a bit more than the $1.89 to $2.29 that might be paid for a pound bag of garden salad. For this reason, promotional efforts are important to keep specialty salads moving, retailers said. Not only can promotions cut price points that tend to be higher than for garden-variety salads, but they also can encourage consumers to try some of the more unusual varieties.

"As the consumer gets the opportunity to try specialty salads, I think we will see more switching," said Glen's Lanners. "We run a salad every week in our ad -- sometimes two, three or four salads a week."

And promotions can reap real rewards for retailers. "We try to promote them about once a month, and the sales do go up dramatically," said Witt of Smith & Woods. "If I can get [the price] down around 99 cents, that will double the sales in some stores." Streeper said he likes the fact that suppliers tend to promote packaged salads much as they would a grocery product, due to limited price fluctuations. "Prices are not necessarily volatile with that market, and that is a big advantage," he said. "Many suppliers have set up quarterly ad money. Anything helps -- advertising it in the paper, demoing it, buy-one-get-one-free specials."

"I try to promote about every other week," said Bevilacqua of Nob Hill. "I don't do it every week because I don't want that lower price to become the fixed price in the consumer's mind."

Green of A&P finds that his stores are developing more finesse in the entire marketing effort for packaged salads. "We are becoming better merchandisers of this product," he said. "We are promoting it better, and we are getting better refrigeration on it."

Green added that with this product, more than many produce items, proper display cases are important not only for attractive displays but also for food safety and to prevent shrink. "You have to be very careful about the refrigeration and not breaking the cold chain," said Green of A&P. "Specialty salads do require more care."

Lanners said that as Glen's devotes more space to specialty salads, a high priority will be using coolers that maintain proper temperatures, which is increasingly important with some new salad varieties.

"Without question, we will be devoting more space to specialty salads, such as the protein-based salads with grilled chicken," he said.

"The challenge is maintaining the cold chain. We are positioning ourselves with the right refrigeration to keep the product in the 32- to 34-degree [Fahrenheit] range for the protein-based salads."

Current equipment, added Lanners, maintains an average 36-degree temperature, which he says is fine for the regular salads.

Some retailers find shrink higher for specialty salads than for others, but Earnest of Thriftway said this may be due to slower turns more than any inherent characteristic of the product.

"It's just like any other produce item, it's perishable. You need to order closer and know what your movement is," he said. "The shrink is often related to slow turns."

The extra effort for specialty salads is well worth it, in the eyes of Streeper of Scolari's. "I think anything you can do to be a little different from the next guy is a benefit," he said. "The sky's the limit on this value-added category."