Stand by your brand

Marketing branded produce is different from marketing branded items in other sections of the store. While consumers are aware of various packaged goods brands, they may not be as aware of the various attributes of branded produce or recognize the distinction between branded and private label produce.

That’s especially important now, as consumers aim to spend less and retailers strive to maintain customer loyalty and drive incremental sales. According to Chicago-based Perishables Group, in 2008 sales of private label vegetables increased 17.2% compared to 2007, while sales of branded vegetables decreased by 0.4%. For fruit, sales were up 15.1% for private label and up 5.4% for branded.

Industry experts say if branded produce is merchandised effectively, the category can help increase sales throughout the store.

“Consumer research continually emphasizes the importance of great produce departments as the primary criteria for selecting a supermarket to shop,” says Bil Goldfield, communications manager for Dole Food Co., based in Westlake Village, Calif.

Rob Wedin, vice president, sales and fresh marketing for Santa Paula, Calif.-based Calavo Growers, says retailers can benefit from stocking certain branded produce items. “Avocados are really profitable and when an avocado ends up in the grocery basket, that basket has a higher ring,” he says, adding that avocado shoppers also tend to buy lettuce, shrimp and other items.

Seth Pemsler, vice president, retail/international for the Idaho Potato Commission, based in Eagle, Idaho, says consumers want to buy branded produce in the same way they want to buy certain brands of packaged items. “The whole essence of brands is confidence and comfort; the idea that if I buy this brand it’s going to be consistent,” he says. “That is the essence of consumer packaged goods. Tell me why that wouldn’t fit produce.”

SEASONAL CHALLENGE
One difficulty in marketing branded produce is that some produce is seasonal. “You can get Coke any time of the year. It’s always available and it’s always the same,” Pemsler says, adding that the same is true for Idaho potatoes, which are in climate and humidity controlled storage for almost a year until the next harvest.

Another constraint is that fresh produce has a short shelf life. “The center store items can be promoted for longer periods of time,” says Ali Leon, senior director of strategic business development for Irwindale, Calif.-based Ready Pac Foods. That’s especially true for value-added produce, such as Ready Pac’s salad blends and fresh cut fruits and vegetables. A consumer can be encouraged to buy many boxes of a price-reduced, non-perishable item, but they won’t buy 10 salad kits.

Short shelf life and sometimes unpredictable supplies also make it difficult to plan weekly promotions, says Dan Crowley, sales manager for Watsonville, Calif.-based Well-Pict Berries. “We have a 12-month supply in California, but in November, December and January we have the most challenges because we might have light supplies interrupted by cold, wet weather,” he explains.

Dionysios Christou, vice president of marketing for Coral Gables, Fla.-based Del Monte Fresh Produce, points to another challenge. “Oftentimes most retailers only carry one brand for a particular product,” he says. “So even when customers wish to purchase their preferred Del Monte products, they may be unable to do so.”

Goldfield says it’s important to stock more than one brand. “Unlike center store products, consumers are not given a comparative choice when it comes to fresh produce, which makes differentiating brands a challenge. In addition, fresh produce is often displayed in bulk or naked, which also creates a barrier in branding to consumers,” he says. 

For some items, the challenge comes from the bulk displays. “Garlic has a loose skin, so unlike other produce, putting a brand sticker on the garlic is not an option,” says John Duffus, vice president of sales and marketing for The Garlic Co., based in Bakersfield, Calif. “In these instances, we rely on the look and the quality of our product in the bins to appeal to consumers.”

Andrew Przytocki, director of marketing for Clifford Produce, based in Ruthven, Ontario, Canada, says for many consumers, buying produce is like buying commodities. “It’s like petrol. Do you stop at Petrol Canada because you like the brand or you just need to buy gas?” he says. Clifford offers the Paysanne brand of tomatoes and other produce. “You have to prove a tomato is not just a tomato. We have to show the retailers that carrying a certain brand is better for them.”
 

MARKETING PUSH
Pemsler says consumers are beginning to seek brands in the produce section. The Idaho Potato Commission runs TV advertising, sponsors chef competitions and does other public relations work. The potatoes are also branded in other areas of the store, such as in frozen foods that contain Idaho potatoes. “The consumer is so knowledgeable they may not buy non-Idaho potatoes,” he says. “If they want a five-pound bag and you don’t have it they will go across the street to another store.”

Crowley agrees that it’s important to stock the item consistently. “Our strategy is to establish trading partnerships with major retailers so that their customer base will see and recognize the label,” he says. “What we like to do is get consistent trading where it’s not a hodgepodge of one week in one week out. Otherwise there is no recognition for the consumer.” He says Well-Pict offers retailers product photos and other materials to build displays.

Goldfield says Dole works with retailers to develop promotions, couponing, in-store collateral material and informational guides, labeling and directing consumers to websites to learn more about the benefits of the brand.

Christou says in-store demos are effective. “For a product like Del Monte Gold extra sweet pineapple, which many consumers may find intimidating, we have seen sales increase dramatically during in-store demo days,” he says.

Del Monte also offers point-of-sale materials. “Since many produce items are usually an impulse buy, making displays visually appealing and enticing are extremely important,” he says.

He adds that some retailers adapt to the demographics of the store’s neighborhood. “It would benefit a retailer to promote Del Monte plantains in an area where there is a high concentration of consumers of Hispanic origin. Retailers should have the produce and brands that consumers in their markets enjoy, in order to see increased sales,” he says.

Wedin notes another regional difference. For avocados, there are small, medium and large fruits. In Texas, retailers tend to carry small fruit and in New York, they prefer large fruit. Calavo encourages retailers to display at least two sizes, including a bag. Budget-constrained shoppers may buy one avocado, while others may opt for a bag of four.

He adds that some retailers promote avocados 35 to 40 weeks a year. Cross-merchandising works, too. “Avocados sell well when they are around tomatoes and lemons,” he says.

Earlier this year the Idaho Potato Com­mission sponsored a “Free Gro­ceries for a Year” contest with Publix Super Markets and Sargento Cheese. The contest, which gave away Publix gift cards, promoted Idaho Potatoes and Sargento Potato Finishers.

The Commission also did a promotion with Fresh Gourmet crunchy toppings. Shoppers who bought the toppings received 75-cent coupons toward the purchase of a bag of Idaho potatoes. The croutons were displayed in the produce section.

“Some retailers have really got it all together,” says Ready Pac’s Leon. She says some stores have monitors with rotating videos in the produce department, showing an expert describing the difference between one variety of peach and another. Others have in-store radio, with the voice of a nutritionist talking about the nutritional value of kiwis. “The really savvy retailers are promoting health benefits.”

Duffus says that in addition to nutrition, consumers are interested in another issue. “Consumers today are more wary of foods, especially foods from overseas, because of the safety concerns. They’re also interested in buying more local produce and supporting products from the USA. The best thing to do at retail is to promote the garlic as California grown.”

Duffus says the category has a very bright future. “Consumers are becoming more adventurous and are always looking for more flavorful foods and different tastes. Garlic plays in well with that,” he says. “Since Country of Origin Labeling legislation has been in effect, we have seen an increased demand for California garlic over garlic sourced from overseas.”

Christou says Del Monte is offering promotions and supporting various causes related to childhood obesity. There will also be more products targeted to kids. “You will find more consumers reaching for fresh produce, rather than traditional snacks, resulting in an overall increase in the category.”

Leon says the future is bright for branded produce. During the recession, people brown bag their lunches to save money. She says studies indicate that consumers say even when the economy improves, they plan to continue to buy branded salads and other items and bring them to work instead of eating at restaurants. “That’s where value-added really helps the consumer achieve that,” she says.

Wedin says there has been an especially good avocado crop this year. “Our customers are going to do well,” he says. “Sales dollars and profits are both going to rise and they are going to pull good spending customers through their stores.”