WINNERS AND WASTERS

MINA WILLIAMS

CHICAGO (FNS) -- Today's produce aisles merchandise a lot more than the traditional, perishable fruits and vegetables, retailers report. But the key to success is determining what is creative and what is clutter.

There appear to be no bounds in using produce-related items to cross merchandise in the produce department. Besides related food products like dried fruits, nuts and raisins, there are items that depend on produce to perform. These items include refrigerated salad dressings and dips, and pouches of drink mixes and potato toppings.

Often space is reserved for more general-merchandise offerings ranging from melon ballers and french fry makers to those with a food-safety bent such as storage containers and produce cleansers. But no matter what the product, the question remains: Do these items sell, or do they waste space?

"They definitely have their place in the produce department," said Bruce Peterson, vice president for produce merchandising at Wal-Mart, Bentonville, Ark.

He added that the produce department at Wal-Mart is a relatively pricey real estate slot since it's the first in the shopping pattern. "You can miss the point with related items, but serving suggestions can tie in an item to sell produce and vice versa. You just have to be judicious," he said.

"Some retailers aren't careful and get carried away with too many nonproduce items and they put them in places where they overpower the fruits and vegetables," said Jeff Neville, chairman of Concord Foods, Brockton, Mass. "That is counterproductive."

The clutter factor is extremely important, since the produce department is the first area a customer usually sees upon entering a store. Every retailer knows that first impressions are critical in setting the tone for the shopping experience. A produce aisle jammed with too many related items -- coupled with haphazard displays -- can confuse shoppers and turn them off, retailers interviewed by SN said.

In examining merchandising options, these retailers told SN that generally the category is segmented into three groupings when evaluating positioning and contribution potential to the department -- edible, tie-in and nonedible. Many times the criteria for positioning are dependent on where the customers expect to find these items.

Tie-in items in particular are extremely important in helping to build department sales, according to Peterson. "During strawberry season, we position glaze nearby. Refrigerated salad dressings complement packaged salads nicely. This adjacency puts the items where customers expect to find them," he said.

"Properly merchandised nonperishable products can add significantly to sales of perishable produce," said Andy Stillman, president of American Importing Co., Minneapolis. "It is imperative that nonperishable and perishable items work together to eliminate clutter."

Dried fruit, for example, does best as a stand-alone item, self-contained in a section toward the back of the department, while it is crucial to place drink mixes adjacent to the fruit that is the chief ingredient.

"Success depends on the display and what the item is," said John Buffington, managing buyer at Raley's/Bel Air Markets, West Sacramento, Calif. "For us, peanuts and sunflower seeds, marinated artichoke hearts and the pouch items used to make strawberry frosts and potato toppings are the best movers."

Pouch items, including drink mixes, are positioned with care at Raley's/Bel Air. These products are situated adjacent to the particular complementary produce items. "We have found that we must display with the item -- if not, the pouches just gather dust."

Raley's/Bel Air has included produce-related items in the produce department for years. Recently the operator detected that the produce department was getting a bit cluttered, so management tweaked the aisle's blueprint to better incorporate the products. In large part, this was accomplished by resetting fixtures to provide a stationary home for the produce-related items.

Endcaps merchandise dry fruit with raisins, prunes, mixed dried fruits and dates. Side panels hold shelves for jarred items including artichoke hearts, squeeze lemons and limes and jars of minced and peeled garlic. Peanuts are offered on the other side of the endcap merchandiser. In some units, nonrefrigerated rolling tables with a cutout for shelving are used.

These items do have a place within the produce department. They represent 4% of department sales, with 80% of the items doing 20% .... of the volume, according to Buffington. To keep sales moving forward, Raley's/Bel Air promotes these produce-related items at least quarterly.

This use of suggestive-serving placement in merchandising boosts sales and keeps a lid on the clutter problem, industry experts said, and lends additional meaning to the art of cross merchandising.

"Mass merchants have been extremely successful with cross merchandising when putting complementary items side by side," said American Importing's Stillman. "The grocery world needs to rethink store layout with cross merchandising in mind, since it makes more sense to today's shopper."

Wal-Mart has done just that. The mass marketer evaluated the produce department and discovered that its focus had shifted away from the core business, perishable fruits and vegetables. As a result, the operator removed 50% of what was not fresh, such as bulk candy.

"Remember though, a supercenter format is different from a traditional supermarket," said Peterson. "It's not what you carry or don't carry in a particular retail format, it's where the customer goes for a particular product.

"If the focus of people in produce becomes more on nonfood, then you have to define what the core business [is] and where will customers go looking for particular items," Peterson explained.

These days, when Wal-Mart positions nonproduce items within the department, the space is set aside for a couple of weeks to create excitement and spur impulse sales. When the novelty wears off, the items are moved or removed.

"These items do sell for the same reason produce sells, it's an impulse," said Peterson. "Customers may pick up an extra bag of potatoes when we place a french-fry maker with the potatoes, but we do worry about overkill. The key is if there is dust on the package, it's been there too long."

For retailers, the attraction in selling these products rests with their profit margins, customarily higher than fruits and vegetables, ranging from 30% to 50%. Additionally, shrink is much lower for these products, which are extremely shelf-stable.

Many items are useless without some fresh fruit or vegetable to go with them, said Neville of Concord Foods. "For example, guacamole mix requires two avocados, strawberry glaze requires strawberries and caramel apple wraps need apples. These items help sell produce and should be displayed adjacent to the produce. You don't need 10 facings, two to four are plenty to make it stand out."

Additionally, produce-related items often offer a suggestion about how to use fruits and vegetables. "Customers may use more because of the suggestion," he said. Even food-safety concerns have spawned a new grouping of produce-related items. Salad spinners, for easier washing and drying, plastic containers promoting home-bound food-safety practices and produce washes have found new homes on retailers' shelves.

"With produce washes, retailers were resistant at first because the inference was that their produce is dirty," said Jennifer Stevenson, marketing manager of Beverly Hills, Calif.-based Organiclean, a manufacturer of a fruit and vegetable wash designed for home use. "But consumers are concerned with food safety and it gives them an alternative."