Strategies to Position Produce for Growth Expansion

The produce sector presents substantial opportunities for growth. Despite a modest increase in volume and dollar sales this past year, experts believe that fruit and vegetable merchandisers can unlock even greater potential through innovative marketing and strategically selected offerings. In 2023, the volume of produce saw a 1.1% increase, and dollar sales rose by 2.2%, according to market research firm Circana.

Currently, produce makes up eight of the top ten most frequently purchased perishable items, alongside staple goods like milk and ground beef. The availability of fresh produce in a variety of retail outlets—including big box stores, discount chains, drugstores, and even specialty locations like coffee shops—has expanded the reach of fruits and vegetables, creating a competitive challenge for supermarkets. Circana reports that supermarkets, which capture about 51% of produce sales, face difficulty increasing market share without reevaluating their merchandising strategies.

One key strategy is product differentiation. Retailers like Walmart focus on low prices and wide availability, but traditional supermarkets can stand out by offering unique varieties rather than trying to appeal to everyone. Understanding the preferences of different consumer segments is critical. For instance, younger shoppers tend to be more experimental with flavors, while Baby Boomers and Gen Xers may prioritize convenience or bulk purchases.

Effective signage and in-store displays can also play a pivotal role in driving sales. Highlighting food pairings, using QR codes to share supplier or growing region information, and featuring phrases like “24 hours from field to store” can enhance the shopping experience. Promoting seasonal items with short shelf lives, such as cherries, also has significant potential for impulse buys.

Consumer behavior is also being shaped by a focus on freshness and sustainability. As food waste becomes an increasing concern, shoppers are drawn to produce that is fresh, high-quality, and has a longer shelf life. Retailers can tap into these preferences by offering a range of organic and value-added products, tailored to the interests of different demographic groups.

Additionally, grocers must embrace digital advertising and social media to attract customers. While well-curated in-store displays are essential, getting consumers to visit the store is equally important. Moreover, creating a smooth shopping experience with wide aisles and comfortable environments is vital. Retailers should focus on offering fresh, local, and seasonal produce, as price is less of a driver for produce purchases compared to other food categories.

By strategically assorting products based on local demographics, retailers can further enhance their produce offerings. For example, catering to regional tastes by stocking specific items like bok choy in areas with a large Asian population or expanding pepper varieties in Hispanic neighborhoods can make a significant impact on sales. Ultimately, the key to growing produce sales lies in thoughtful merchandising, understanding consumer preferences, and staying connected with the local community.