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Retail View: 2017 retail predictions, part 2

(Earlier this year The Produce News, a handful of experts took a look at the retail sector discussing operational trends for 2017. Here, the same group looks specifically at the produce department.)

The continued growth and expansion of value-added products, as well as a shout out for beets, topped the predictions a group of retail experts made for the fresh produce department in 2017.

“Anything beets will be the new craze in the race towards health and nutrition, similar to the kale kick,” said Ron Pelger, president of the retail consulting firm RonProCon and Fresh Xperts in Reno, NV, and a columnist for The Produce News. “Beets — red, yellow and orange — will be offered in a great number of ways. Bottled beet juice will expand in various varieties, similar to yogurt. Beets contain antioxidants and are loaded with heart-healthy benefits.”pelger2014Ron Pelger

Dick Spezzano of Spezzano Consulting Service in Monrovia, CA, also mentioned beets when discussing his top trends, noting that both yellow beets and beet juice are finding favor among consumers and retailers.

But the longtime retailer didn’t limit his list to beets. Jackfruit, he said, could make a big move, “if anybody can figure out what to do with it.”  

Spezzano also expects organic produce to continue to flourish in the produce department and especially make gains in the more traditional retail outlets. He said retail trend reports from both the United Fresh Produce Association and the Fresh Produce & Floral Council have tracked the tremendous growth in the category.Spezzano-DickDick Spezzano

“Some individual chainstores [from the conventional sector] are doing 18-20 percent of sales in organics,” said Spezzano, a former produce executive at Vons.

Ed Odron of Ed Odron Produce Marketing Consulting in Stockton, CA, has noticed the same thing. The former produce executive at Lucky Stores, opined that one of the reasons Whole Foods has experienced growing pains is because the conventional stores have upped their organic game quite a bit.

When looking at what product might be the next kale or Brussels sprouts, Odron said don’t sell the latter too short. “I don’t think Brussels sprouts have peaked yet. There is still an opportunity for a lot more growth with new products.”

But he added that he expects both butternut squash and pomegranate arils to see a significant increase in sales in 2017.Odron-Ed-2016Ed Odron

Bruce Peterson of Peterson Insights in Fayetteville, AR, formerly the top produce executive at Walmart Stores, was more general in his predictions. “I think value-added will continue to grow, and the definition of what that is will expand. I marvel at the increase in juice, which one could argue is a value-added product. With the increasing number of online shoppers, I see value-added as a more predictable way of ensuring consistency. And I see a significant increase in the convenience aspect of today’s shoppers. When you add the food-safety component to this, I think it’s safe to say the value-added category will have a wonderful 2017.”

Spezzano agreed, noting, “There will be more value-added items, and what I have noticed is that more chains are creating those products in the back room.”

Spezzano still has connections at his former employer and said Vons, as well as its parent company, Albertsons, are doing a large part of their cut fruit and vegetable product in-house. “They appear to be committed to it and it makes economic sense.”Bruce-PetersonBruce Peterson

He said that although shelf life takes a hit with back-of-the-house processing at retail, produce managers are reporting sales gains in the 200-500 percent range.  

Steven Muro of Fusion Marketing in Chatsworth, CA, spends a good deal of his time analyzing store sales and retail marketing trends for various fresh produce industry clients. He said convenience is the No. 1 driver in the retail business today. While that means utilizing technology for home delivery, faster service and checkout, it also means more innovative value-added items marketed at retail.

Muro noted that some companies have made inroads in the meal-replacement sector with home delivery of meal kits, and he expects to see these same kits marketed within the grocery store.Steven-Muro 1Steven Muro

“Meal kits, such as those marketed by Plated and Blue Apron, are doing very well,” he said. “Why shouldn’t a retailer have them available for pickup. Retailers need to differentiate themselves and this is the perfect place to do it.”

Muro added that as the economy continues to improve, consumers will have more disposable income and he expects they will increase their spending on time-saving food products. “I expect increased dollars to be spent on convenience.”

Both Spezzano and Peterson mentioned the local food movement when discussing 2017 trends.

“Another area to watch closely is how retailers deal with the desire to increase ‘local purchases’ with food-safety concerns,” said Peterson. “It’s well known that retailers impose a different set of rules on major commercial producers than they do for small, local farmers. We are one food-safety crisis away from casting a bright light on this whole issue. Whether 2017 is the year we will see this remains to be seen.”

Notwithstanding that fear, Spezzano said the local food movement continues to resonate with consumers. In California, he said the impact is not as evident because of the year-round availability of fresh produce. But in areas where the fresh season is much shorter, he said the concept of featuring locally grown produce is compelling and he expects it to be a continued emphasis in the retail produce department.