Under Seeley’s leadership, OPS has thrived by having each of its parts from the retail tours to the networking events to the show itself be top-notch. But most observers would agree that over the years, OPS has particularly delivered with its specific lineup of three keynote sessions during its educational segment. Typically, each are thought provoking, relevant and cover an interesting cross section of topics. OPS 2024 followed that format with a session on food waste and food insecurity, another on the differing buying habits of America’s generational groups and a retail panel featuring opposite ends of the size spectrum.
Kevin Coupe of the Morning News Beat and a frequent retail moderator at OPS sessions, once again moderated this event, which featured Robby Cruz, vice president of produce for Target, and Patrick Haines, who wears the same title for food wholesaler UNFI, which tends to service independent retailers on the smaller end of the scale.
Coupe began the session noting that organic produce sales at retail are relatively flat registering only a 1.6 percent gain in 2023 — a far cry from the double-digit growth that occurred throughout the 2010s. Cruz said Target has overperformed realizing more than a 2 percent gain in organic produce sales in each of the last three years. He further noted that sales are especially strong on some of the core items.
Organic apple sales make up 25 percent of the volume in that category while organic bananas command about one-third of that sector, which is one of the top two or three produce items for most retailers. Cruz opined that Target’s produce sales might be overperforming industry averages because their shoppers tend to be younger, with younger people often more aligned with organic consumption. He added that many Target stores have a much smaller footprint than the average supermarket and handle a limited number of SKUs.
Haines relayed that as a wholesaler UNFI serves a wide variety of retailers. Overall, he said the company is registering good growth in the organic sector, with many retailers eclipsing industrywide numbers. He said serving so many different formats and retailers of all types, one cannot use a cookie-cutter approach when developing an organic produce program. He said each retailer has their own strategy with UNFI personnel working hand in hand to influence and shape the particular strategy. He clearly believes retailers should cater to the organic shopper, a growing segment of the consumer community.
Haines said that one way the grower-shipper community can help is to mitigate supply issues. He said surety of supply is an ongoing issue in the organic produce sector.
Cruz advocated for more transparency between buyer and produce supplier. He said it helps retailers to know the growth plans of their suppliers just as it would help grower-shippers to know how quickly their customers are expecting to expand.
Both retailers attacked the climate change question head on. Haines said it is definitely a major issue as some traditionally dependable growing areas are experiencing ongoing weather challenges that are making their surety of supply less dependable. On the other hand, he added that there are new sources of supply coming into play.
On the same subject, Cruz advised growers to mitigate their challenges by diversifying their product mix and growing areas. As climatic conditions change, he indicated growers need to alter the crops they grow to align with those changes.
Coupe asked the two panelists to look down the road and comment on what the retail scene will look like in 2030. While both were a bit reluctant to get too far ahead of themselves, Cruz said changes are already occurring at a fast and furious pace. He believes e-commerce sales will continue to increase. He said one of the company stores in Hawaii has 40 drive-up spaces to accommodate online shoppers. He noted that those spaces service tourists who order from the plane as they are arriving in Hawaii and then pick up their load on the way to their rented condos.
Haines said the e-commerce trend is challenging when dealing with smaller retailers who don’t tend to have robust internet platforms, but he added that it is UNFI’s goal and responsibility to bring then along and help them join that revolution.
Nicholas Bertram, who is CEO of Flashfood, has a resume full of retail experience. Prior to joining his current company about 18 months ago, he served as CEO of Giant, which is a major East Coast retailer. He reported that Flashfood works with more than 2,200 retailers across 22 states, creating a digitized platform allowing those stores to offer deep discounts on food headed for the backlot dumpster. This is usable food, typically with a short shelf life. The number one product on the Flashfood website on a daily basis is produce
Offering discounts of 50 percent of more, Bertram said this food can be put in the hands of the food insecure, who typically must buy less nutritious food that is within their smaller budgets.
He revealed that while $473 billion worth of food is wasted annually, representing 145 billion meals, 43 million U.S. resident are underfed every day. He added that only one in 10 Americans actually eats a healthy diet, according to USDA standards.
“Many consumers have to make a choice about what they eat,” he said, because they don’t have enough money for a proper diet. He also said that 30 million tons of produce is wasted annually in the United States.
Bertram is touting Flashfood as a solution but he readily admits it cannot be the only solution. He urged the audience to step up and figure out ways in which they can help. “Flashfood is on a mission to feed families not landfills,” he stated.
Another keynote address was delivered by Sherry Frey, an executive with NielsenIQ. She used data developed by Nielsen to analyze the buying habits of four major generations groups in the United States – Baby Boomers, Gen X, Gen Y (Millennials) and Gen Z, those born between 2001 and 2020.
She noted that the two younger generations over index on buying organic produce, which bodes well for the industry, as their buying power is on the rise and both groups will be major influencers in the food marketplace for decades to come. She added that organic produce sales cut across all generations and is no longer a niche product, but rather mainstream.
Frey said consumers, especially younger ones, are indicating in increasing numbers that they want transparency in their food supply.
Speaking specifically of the concept of sustainability in food, Frey listed four specific life events that cause consumers to over index in their purchases of organic produce: when couples move in together, when a baby is on the way, as the child moves to the day care environment and when women reach menopause.
One surprise that the researcher revealed is the Baby Boomers are currently the biggest purchasers of organic produce and they are registering the fastest growth (3 percent annually) as they move into retirement age and health concerns are top of mind. She said marketers tend to focus on the younger generations but they shouldn’t ignore Boomers, who still control a lot of the buying power in this country. “That may be a target you are not looking at right now,” she said.
Another data point showed that while organics are trending up across all categories — including center-store food, clothing and seemingly everything else — organic produce is the category in which consumers believe it is most important, which also bodes well for future growth.
