Food Transparency Fuels Growth in Fresh Departments

The fresh food sections of grocery stores are thriving, with growth outpacing other food and beverage departments over the last four years, according to market research firm IRI and the Food Marketing Institute. This success is closely tied to increasing consumer demand for transparency in food sourcing and production.

Growth in Fresh Food Sales

As of 2017, fresh sales accounted for 30.5% of the total food industry sales. Categories such as produce, bakery, and deli meats led the charge, showing strong dollar and volume growth.

IRI’s Fresh Food Shopping Trends Survey revealed key consumer priorities:

• Over 30% of shoppers consider claims like antibiotic-free, hormone-free, and pesticide-free as increasingly important.
• Point-of-sale data shows that transparency claims significantly impact purchasing decisions.

The Impact of Transparency Claims

Antibiotic-Free and Hormone-Free

• No Antibiotics Ever (NAE) Meat: Experienced 45% growth from 2016 to 2017.
• Deli Meat: Products with a “no antibiotics” claim saw a five-year compound annual growth rate (CAGR) of 17%.
• Antibiotic-Free Chicken: Increased from 12% of sales in 2015 to 28% in 2017.
• Overall, antibiotic-free meat accounted for 10% of total meat sales in 2017.

Shoppers with transparency-focused meat products in their basket tend to spend more. The average basket size in the U.S. is $76, but this jumps to $105 when it includes organic or antibiotic-free meat or poultry.

Organic Products

The narrowing price gap between organic and conventional produce is helping drive growth:

• Organic Produce: Growing at 8% annually, with the number of produce categories capturing more than 10% organic share doubling since 2015.
• Organic Deli Cheese: Achieved a five-year CAGR of 40%.
• Organic Meat: Grew by 9%.

Recommendations for Retailers

To capitalize on the demand for transparency, retailers should consider these priorities:

1. Emphasize Integrity: Showcase the quality and ethical standards of your fresh offerings. Align with the social and cultural values of your target shoppers.
2. Educate Shoppers: Use in-store and digital communication to inform customers about the sourcing, health benefits, and sustainability of your products.
3. Consistency Across the Store: Ensure transparency messaging is uniform throughout all departments.
4. Promote Efforts: Publicize initiatives like ethical sourcing, partnerships with local farmers, and food waste prevention to gain customer trust and loyalty.

The Bottom Line

Transparency is not just a trend—it is a powerful driver of growth in the fresh food sector. Retailers that prioritize clear communication and align their offerings with consumer values will strengthen shopper loyalty and elevate their fresh departments as destinations for conscientious consumers.