Retail sales of packaged salads and fresh-cut fruits and vegetables are still showing strong growth, according to two speakers at the International Fresh-cut Produce Association's 10th Annual Fall Seminar held in Alexandria, Va. recently.
Entitled “Charting Current Developments in Fresh-cut,” the event featured both IFPA's Chairman of the Board Craig Delaney of Ready Pac Produce, Inc., Irwindale, Calif., and IFPA member Sam Petro of Country Fresh, Inc., Houston, Texas.
Total sales of fresh-cut products at retail grew at an annual rate of 8 percent and reached nearly $4 billion in the 52-week period ended Aug. 31, according to Delaney, who cited retail scan data from Information Resources Inc.
Of that total, packaged salad sales accounted for nearly $2.4 billion, growing 9 percent for the year, Delaney announced. During the same period, retail sales of fresh-cut vegetables grew 6 percent, reaching nearly $1.2 billion, while fresh-cut fruit sales hit $243 million, up 15 percent.
Salad blends are driving packaged salad sales growth, according to Delaney's report. Accounting for nearly half of all packaged salad sales, blends jumped 17 percent during the year to nearly $1.1 billion.
Two more bright spots in the salad category are sales of organic packaged salads and romaine hearts, according to Delaney. Retail sales of organic salads amounted to only $151 million, yet they displayed annual growth of 20 percent during the period. Running close behind with sales of $111 million, sales romaine hearts rose 12 percent during the year, while iceberg-based garden salads actually lost ground, dropping about 3 percent to $700 million.
The retail packaged salad segment is maturing, according to Delaney, but there is still room for growth. IRI research indicates 77 percent of U.S. households are now buying fresh-cut salads at an average rate of 1.5 units per purchase. The frequency of purchases, however, averages only 50 days per cycle — surprisingly low. Reaching nearly a fourth of households who do not currently purchase salads and shortening the average buying cycle would salad sales continue to grow, he noted.
While Delaney's presentation focused on salads and fresh-cut produce in general, Sam Petro, the second speaker at the event, discussed his company's exciting odyssey in the rapidly growing marketplace for fresh-cut fruit. In the five years since he and partner Bryan Herr launched their retail fruit operation the business has experienced exhilarating growth and has expanded to encompass seven processing facilities nationwide.
“I'm really passionate about what I do,” he said. “I'm really passionate about this business and where it's heading. Country Fresh is in the cut fruit business. Cut fruit makes up 88 percent of our sales and the other 12 percent of our business is vegetable trays. We are strictly retail at this point, but we are moving into food service because we see a lot of opportunities there. Our company has seen triple digit growth four years running.”
When the partners launched Country Fresh, many supermarkets were cutting fruit in-house, but demand is growing and retailers are outsourcing more of their fresh-cut product for food safety reasons.
Petro noted his major customers say fresh-cut fruit is a growing segment of the market. Various chains have estimated that cut fruit sales make up from 1.65 percent of produce department sales to as high as 2.5 percent.
“I was talking to a very large retailer in the Southeast recently,” he explained, cautioning that fruit quality and flavor must be topnotch or consumers will not continue to purchase it. “I've noticed his purchases with us have just grown astronomically. I asked him what the situation was and he said fresh-cut fruit is catching on.
“I really believe fruit has greater potential than salads. It's hard to get a young child to eat salads, but if we have something sweet, they'll eat fruit a whole lot more quickly than you can get them to eat romaine.”