A year after crisis, spinach sales still slow to rebound
A year after crisis, spinach sales still slow to rebound
Most experts who track sales of a product after a food-safety scare, expected sales of fresh spinach to rebound within six months of last year's E. coli outbreak linked to fresh spinach.
But about a year later, sales are still down by 16-18 percent, and while there are signs that recovery continues, it is happening at a slow pace.
Steve Lutz of The Perishables Group, which collects and analyzes scan data on a regular basis, told The Produce News that for the 52-week period ending Aug. 1, bulk spinach sales were down 26 percent compared to the previous year. But for the four-week period encompassing most of July, sales were down only 16 percent. He said that the scan data reveal similar figures for packaged spinach. The packaged salad category itself registered about a 1 percent sales gain in that same time period.
The time period is relevant since Aug. 1, 2006 to July 31, 2007 encompasses the period before the spinach crisis began, includes the two-week September time frame when spinach was off the shelves, and then chronicles the slow rise in spinach sales from nothing back to almost 85 percent of the previous year.
Other scan data as well as individual company numbers suggest similar results.
Mike Celani, senior vice president of retail sales and marketing for Ready Pac, based in Irwindale, CA, said that his company likes to take sales numbers in 12-week increments. "For the 12-week period ending September 23, the spinach category shows an 18.8 percent decline over the previous year figures."
The numbers for 2006 might be skewed because those same 12 weeks last year include the period when the crisis began and when spinach was actually off the shelves at the end of that period. Mr. Celani said that the 18.8 percent decline does represent a bit of a recovery, and Ready Pac has noted that spinach sales continue to rebound.
Jen Verdelli, director of sales for Verdelli Farms in Harrisburg, PA, said that packaged spinach sales have been consistently down by about 25 percent for most of the year, but she has noted some increase in sales in the last month or two.
"We are now down about 20 percent, so it is getting better," she said. "I do believe that sales will eventually come all the way back."
Like the others interviewed for this story, Ms. Verdelli said that the initial crisis did affect sales of other packaged salad items, but that the impact was short-lived. She said that all salad sales were soft for a short period but they built back up rather quickly, and she noted no lingering impact a year later.
No one from Fresh Express, the industry leader in packaged salads, was available to be interviewed for this story, but Ed Loyd, a spokesman for Chiquita Brands International, which owns Fresh Express, did provide via e- mail some sales data as well as comments from Chief Financial Officer Jeff Zalla made during the company's second-quarter conference call with investors in August.
The Fresh Express figures for the entire packaged salad category show that sales were off 29 percent for the four-week period immediately following the September 2006 incident; by August of this year, sales were down only 4 percent.
In part, Mr. Zalla said, "The value-added salads category in North America remains soft in the aftermath of an E. coli outbreak last September. While many consumers have returned to the category, continuing media coverage of various food-safety incidents -- including those in other categories, such as meat -- have caused concerns to linger, particularly for light users who have not yet come back to the category. As a result, the category is rebounding more slowly than expected, and retail sales for the industry remain about 5 percent lower than a year ago."
Mr. Lutz of The Perishables Group said virtually the same thing, opining that one of the reasons spinach sales have not come all the way back is that food- safety concerns have remained in the headlines throughout the past year.
"There are a certain amount of people out there who are slow to come back, and about every 90 days there seems to be some type of food-safety issue that reinforces their reluctance" to buy spinach or other food items associated with food-borne illness, he said.
Mr. Celani agreed with that analysis, stating that since last year, there has been constant media attention about one type of recall or another. "It is difficult to build confidence back up in that environment. We have a lot of work to do."
He said that the "we" to whom he referred includes the produce industry as well as the entire food industry. While some people do differentiate and target their responses, he said, the typical consumer is not very well informed, and many tend to lump the various facets of the food industry together. An E. coli scare in ground beef can affect spinach sales, he said.
Of course, when there is a food scare or food recall story in the news, many of those stories discuss the previous recalls, thus bringing past tainted products to top of mind once again.
The experience with spinach and its slow rebound "should send a message to the industry that there is a lasting impact" to these situations, said Mr. Lutz, who added that the fresh produce industry has to be ever vigilant because in some respects, all food products are tainted when one has a problem.
In analyzing the numbers, Mr. Celani said that private or store-brand sales of fresh spinach are off a bit less than the branded product. He believes that this shows that consumers do trust their hometown grocer -- even if it is a very large chain. The data also show that foodservice sales of fresh spinach are down by about the same percentage as retail sales.
On the good news side, Mr. Celani said that promotion prices of packaged spinach have been successful in boosting sales, which demonstrates that consumers' concerns have a level of price sensitivity. But the Ready Pac executive allowed that those promotion prices have to be a bit more aggressive than they were before the crisis.
"You used to see [promotion prices] at two for $5 or $1.99," he said. "Right now you might have to go 10 for $10" to register the same promotional spike as before the crisis.
In the long run, Mr. Celani does expect spinach sales to come all the way back. He said that spinach has a very good nutritional story to tell, and he expects those healthy benefits to eventually override the short-term effect of the crisis.
Of course, that is dependent on there not being another crisis involving fresh spinach.
But about a year later, sales are still down by 16-18 percent, and while there are signs that recovery continues, it is happening at a slow pace.
Steve Lutz of The Perishables Group, which collects and analyzes scan data on a regular basis, told The Produce News that for the 52-week period ending Aug. 1, bulk spinach sales were down 26 percent compared to the previous year. But for the four-week period encompassing most of July, sales were down only 16 percent. He said that the scan data reveal similar figures for packaged spinach. The packaged salad category itself registered about a 1 percent sales gain in that same time period.
The time period is relevant since Aug. 1, 2006 to July 31, 2007 encompasses the period before the spinach crisis began, includes the two-week September time frame when spinach was off the shelves, and then chronicles the slow rise in spinach sales from nothing back to almost 85 percent of the previous year.
Other scan data as well as individual company numbers suggest similar results.
Mike Celani, senior vice president of retail sales and marketing for Ready Pac, based in Irwindale, CA, said that his company likes to take sales numbers in 12-week increments. "For the 12-week period ending September 23, the spinach category shows an 18.8 percent decline over the previous year figures."
The numbers for 2006 might be skewed because those same 12 weeks last year include the period when the crisis began and when spinach was actually off the shelves at the end of that period. Mr. Celani said that the 18.8 percent decline does represent a bit of a recovery, and Ready Pac has noted that spinach sales continue to rebound.
Jen Verdelli, director of sales for Verdelli Farms in Harrisburg, PA, said that packaged spinach sales have been consistently down by about 25 percent for most of the year, but she has noted some increase in sales in the last month or two.
"We are now down about 20 percent, so it is getting better," she said. "I do believe that sales will eventually come all the way back."
Like the others interviewed for this story, Ms. Verdelli said that the initial crisis did affect sales of other packaged salad items, but that the impact was short-lived. She said that all salad sales were soft for a short period but they built back up rather quickly, and she noted no lingering impact a year later.
No one from Fresh Express, the industry leader in packaged salads, was available to be interviewed for this story, but Ed Loyd, a spokesman for Chiquita Brands International, which owns Fresh Express, did provide via e- mail some sales data as well as comments from Chief Financial Officer Jeff Zalla made during the company's second-quarter conference call with investors in August.
The Fresh Express figures for the entire packaged salad category show that sales were off 29 percent for the four-week period immediately following the September 2006 incident; by August of this year, sales were down only 4 percent.
In part, Mr. Zalla said, "The value-added salads category in North America remains soft in the aftermath of an E. coli outbreak last September. While many consumers have returned to the category, continuing media coverage of various food-safety incidents -- including those in other categories, such as meat -- have caused concerns to linger, particularly for light users who have not yet come back to the category. As a result, the category is rebounding more slowly than expected, and retail sales for the industry remain about 5 percent lower than a year ago."
Mr. Lutz of The Perishables Group said virtually the same thing, opining that one of the reasons spinach sales have not come all the way back is that food- safety concerns have remained in the headlines throughout the past year.
"There are a certain amount of people out there who are slow to come back, and about every 90 days there seems to be some type of food-safety issue that reinforces their reluctance" to buy spinach or other food items associated with food-borne illness, he said.
Mr. Celani agreed with that analysis, stating that since last year, there has been constant media attention about one type of recall or another. "It is difficult to build confidence back up in that environment. We have a lot of work to do."
He said that the "we" to whom he referred includes the produce industry as well as the entire food industry. While some people do differentiate and target their responses, he said, the typical consumer is not very well informed, and many tend to lump the various facets of the food industry together. An E. coli scare in ground beef can affect spinach sales, he said.
Of course, when there is a food scare or food recall story in the news, many of those stories discuss the previous recalls, thus bringing past tainted products to top of mind once again.
The experience with spinach and its slow rebound "should send a message to the industry that there is a lasting impact" to these situations, said Mr. Lutz, who added that the fresh produce industry has to be ever vigilant because in some respects, all food products are tainted when one has a problem.
In analyzing the numbers, Mr. Celani said that private or store-brand sales of fresh spinach are off a bit less than the branded product. He believes that this shows that consumers do trust their hometown grocer -- even if it is a very large chain. The data also show that foodservice sales of fresh spinach are down by about the same percentage as retail sales.
On the good news side, Mr. Celani said that promotion prices of packaged spinach have been successful in boosting sales, which demonstrates that consumers' concerns have a level of price sensitivity. But the Ready Pac executive allowed that those promotion prices have to be a bit more aggressive than they were before the crisis.
"You used to see [promotion prices] at two for $5 or $1.99," he said. "Right now you might have to go 10 for $10" to register the same promotional spike as before the crisis.
In the long run, Mr. Celani does expect spinach sales to come all the way back. He said that spinach has a very good nutritional story to tell, and he expects those healthy benefits to eventually override the short-term effect of the crisis.
Of course, that is dependent on there not being another crisis involving fresh spinach.
