PACKAGES CANNIBALIZE SALAD ITEMS: STUDY

STEPHEN DOWDELL

A newly released supermarket study indicates that retailers may be building their sales of prepackaged salads at the expense of not just bulk lettuce, but also other salad-related items such as tomatoes, celery and broccoli.

The study tracked produce purchases at three chains in three different regions for a four-week period, starting in late January. It used the chains' frequent shopper programs as a data base.

"In all three chains, customers who bought packaged salads bought fewer salad-related items," reported U.S. Marketing Services, Sonoma, Calif., the research firm that conducted the study for the California Tomato Board, the Florida Tomato Committee and Nunes Co.

The researchers said the study's findings are preliminary, given the relatively short time prepackaged salads have had to effect significant changes in consumer behavior.

Still, said the report, "there have been trade-offs" for the produce department as value-added items have experienced rapid growth.

"When packaged salads were first launched they quickly gained sales without impacting head or leaf lettuce business. As the packaged salad category has matured, however, it has cannibalized sales from head and leaf lettuce," the report said.

"Changes in the lettuce/salad category also appear to be impacting traditional salad ingredients such as tomatoes, celery and the like," the report said.

"If shoppers who switch from bulk lettuce to packaged salads in the future exhibit purchase patterns similar to current packaged salad buyers, then sales of salad-related

produce can be expected to diminish, unless remedial action is taken."

The study went on to suggest that such "remedial action" would include more aggressive promotions of salad-related items as an enhancement to packaged salads.

The study evaluated the produce transactions at a chain on the West Coast, in the Northeast and the Middle Atlantic regions. It relied on data generated by shoppers who used a frequent shopper card in conjunction with their purchases. Records were collected that account for approximately 33% to 50% of all store transactions in each chain during the four-week period, the report said.

Bob Urban, president of U.S. Marketing Services, said the shopper's club data offered the best way to track the relationships between the various salad items on a transaction by transaction basis. "It's like standing at the end of the checkout line and examining consumers' register tapes," he explained.

The research focused on four groups of shoppers: those who bought iceberg lettuce, leaf lettuce, packaged salads, and neither iceberg nor leaf lettuce.

The salad-related items tracked were: regular tomatoes, celery, cucumbers, mushrooms, green peppers, broccoli, refrigerated dressings, iceberg lettuce, green leaf lettuce, red leaf lettuce, romaine and all packaged salads.

Urban said the geographic spread was important, because the West Coast tends to represent the packaged salad market at its most mature development so far, while the East Coast in comparison is further behind.

"In other studies we have seen that packaged salad growth on the West Coast is tending to have flattened over time, and that the mix between sales of packaged and raw items is more stable now. That could be an indication of what will happen down the road on the other side of the country as well," he told SN.

This study showed that a "modest but significant number" of bulk lettuce purchasers also buy packaged salads at the West Coast chain, but that number was much smaller in the chain stores in the Northeast. Similarly, some packaged salad buyers buy bulk lettuce as well, except in the Northeast.

Urban told SN he thought the study presages further losses of sales of raw salad ingredients in some regions, at least while the East Coast plays catch-up to the West.

From a retail perspective, he added, the study findings indicated that to some extent supermarkets may find themselves considering the question of whether the future of their business is in boosting sales of smaller numbers of high-ring convenience items such as packaged salads, or in the business of selling more stockkeeping units of low-ring raw items.

For companies in the business of shipping fresh salad ingredients, he said, the message may be for them to convince retailers that this trade-off presents an opportunity to more aggressively sell their salad items as add-ons or enhancements to their bagged salads. Lastly, for packaged salad processors, it could point the way to keeping their category growing by somehow pushing the technology to add new ingredients to their mixes, such as sliced mushrooms or tomatoes.

Tomatoes were the most frequently purchased items among the four buyer groups at all stores studied.