Each year that we attend SEPC’s Southern Exposure, the DMA team takes position as close to the front of the room as possible to absorb the data shared during the popular session, “The Power of Produce.”  This year we stayed true to form and nabbed seats on the second row so that we could recap what we believe is essential for food marketers to know.

Now in its 8th year, the Power of Produce is one of the most sought-after educational sessions for produce professionals to attend at Southern Exposure. This session is jam-packed with valuable insights from FMI, 210 Analytics, and a panel that included representatives from Walmart, Hannaford Supermarkets, and Tops Markets. We learned about how inflation is affecting the produce aisle, purchase trends, and overall consumption of fresh fruit and vegetables.

Top 10 Produce Category Growth Powerhouses of 2022

While there are many factors that impact category growth aside from marketing, one way to gauge the effectiveness of your efforts is to look at sales comparisons year over year. Here is a look at the product categories that grew the most in 2022:

1. Berries: +$527M gain vs. YA
2. Potatoes: +13.1% sales change YoY
3. Onions: +15.6% sales change YoY
4. Melons: +14.3% price per pound vs. YA
5. Lettuce: +12.7% price per pound vs. YA
6. Apples: +$225M gain vs. YA
7. Grapes: +6.3% sales change YoY and +4.9% price per pound vs. YA
8. Avocados: +20.3% price per pound vs. YA
9. Oranges: +8.9% sales change YoY
10. Cucumbers: +7.6% sales change YoY and +6.4% price per pound vs. YA

Big Shifts in Food Sales Outlet Preferences

Since the pandemic, people’s preferences for “where to buy” their food have shifted.  In the presentation, FMI reports where people shopped most in 2022:

• Total US Sales outlets produced $83.5B in sales during 2022 compared to $68.8B in 2019
• Top outlets that experienced the largest growth include:
  • Mass & supercenters by 19% in 2022 compared to 2019
  • Club by 10.5% in 2022 compared to 2019
  • Online sales by 2.6% in 2022 compared to .7% in 2019
• Other outlets like traditional grocery chains, discount grocery, and health and specialty stores realized a lower percentage of overall produce sales compared to 2019

Online Household Buying Slows

You might be surprised to see what happened in 2022 in comparison to previous years relative to online sales.  With pandemic restrictions lessening, we’re seeing people back in stores.  Here are the key findings reported:

• Compared to 2019 when 54% of households purchased groceries online, in 2022, penetration slipped to 46%
• The study reveals that the online shopper identifies as:
  • Millennials – 78%
  • Hyper workers – 76%
  • High-income households – 70%
  • Living in the west – 59%
  • Men – 53%
• Other observations made during the presentation include:
  • Many baby boomers went back to buying in person in 2022
  • Delivery is much more important to younger generations
  • Order size tends to drop when order frequency rise

What Marketers Need to Know About Produce Sales in 2023

We’ll send you a “you’re welcome” in advance for what’s next in our recap of the Power of Produce.  These metrics are full of opportunities for you to embrace from a marketing perspective to help you pack, communicate, engage with, and sell smarter to shoppers.  Here are a few of our favorite takeaways:

• Market size for organic produce outgrew the rate of growth of conventional produce.
• People will make room in their budgets for organic produce as they perceive it as “better for them” than conventional produce.
• Plant-based proteins are still on the rise! According to the study, 73% of people occasionally opt to get their protein from a source other than meat. 
• 59% of respondents in the study purchase specific fruits and vegetables because of their health benefits. (Hint: This is a great messaging opportunity for fresh produce marketers)!
• Knowledge about the product’s benefits can help increase engagement with shoppers.  People that buy produce want to know:
  • 48% – The health benefit of specific kinds
  • 47% – Ways to easily eat more fruit/vegetable snacks
  • 46% – The nutritional content of specific kinds
  • 39% – What constitutes one serving
  • 33% – The recommended amount to eat
• Shoppers are looking for fresh fruit/vegetable sides and salads to help eliminate waste and stretch their dollar.  In fact, people are looking for ways to stretch meals that they’re buying from restaurants!  The key is to have food in the fridge and ready to go.  The types of prep used to “add on” to restaurant meals revealed:
  • 33% – Seek fresh fruit as an add-on, side, or dessert
  • 32% – Seek fresh veggies other than a salad
  • 30% – Want a salad made from scratch
  • 28% – Will use a deli-prepared vegetable or fruit
  • 25% – Will use a salad kit or packaged salad
  • 23% – Seek to add extra “fresh” toppings to their pizza or sandwich
  • 19% – Will make their own additional smoothie to accompany a meal
  • 17% – Will gladly add fresh herbs to increase flavors of restaurant-purchased meals
• Most meal inspiration that reaches shoppers lies outside the store.  Here’s where shoppers say they receive the most inspiration:
  • 45% – Family/friends
  • 41% – Routine meals I know/tend to cook
  • 34% – Cookbooks
  • 32% – TV cooking shows
  • 28% – YouTube
  • 26% – Facebook
  • 20% – Magazines
  • 19% – Grocery store website/app
  • 18% – TikTok
  • 18% – Instagram
  • 16% – Pinterest
  • 16% – Meal Kits
  • 13% – Other social media
  • 11% – In-store recipe kiosks
  • 9% – Bloggers/influencers
• Meal inspiration varies by generation. Here are the top 5 sources of meal inspiration or meal ideas by generation:
  • Gen Z
    • TikTok
    • YouTube
    • Family/Friends
    • Instagram
    • TV Cooking Shows
  • Millennials
    • YouTube
    • Facebook
    • TV Cooking Shows
    • Family/Friends
    • Instagram
  • Gen X
    • Family/Friends
    • Routine meals
    • Recipe websites
    • Cookbooks
    • TV Cooking Shows
  • Baby Boomers
    • Routine meals
    • Family/Friends
    • Cookbooks
    • Recipe websites
    • TV Cooking Shows
• Shoppers are concerned about food waste in a three-dimensional way:
  • First, they cannot financially afford to waste fresh produce
  • Second, shoppers are concerned about food insecurity in the U.S.
  • Third, they are concerned about the environmental impact of fresh produce waste
• Shopper’s specific issues with at-home food waste include:
  • Fruit going bad before they can eat it
  • Vegetables going bad before they can eat it
  • Packaged produce is often sold in quantities that are too much

Generational Marketing Matters

During Power of Produce, we learned all about how to celebrate the differences of each generation and use this to our advantage when navigating how they purchase food and respond to marketing messages. Here are a few of the key takeaways that we believe are important to share:

• Baby Boomers are going through a time of transformation and shouldn’t be ignored! In fact, during the pandemic, this age group shifted to purchasing online more frequently.  To reach this audience more effectively, utilizing words that reframe how we think about aging is imperative for marketers.  The baby boomer generation does not desire to age like their parents and instead, intends to age gracefully living full lives inclusive of activity, food, art appreciation, and fun.
• Generation X really shifted the relationship “status quo” with their children. 70% of Gen Z teens with Gen X parents say their parents are their best friends. Studies show that Gen Xers have skepticism about marketing and prefer clarity over brevity. When marketing to Gen Xers, including generationally relevant terminology and music (like hip-hop) can easily change the trajectory of this unique group’s purchasing decisions.
• With the rise of Millennial adults, we are also seeing the rise of dual-income households in America! In 2018, 66% of all households were dual-income. People from this generation are collaborative, empowered, risk-averse, and searching for meaning in life.  Of the generations, this group is most likely to impact organizations simply because of their eagerness to live a flexible working lifestyle.  Since the pandemic, this group expects changes in businesses that challenge the status quo.  Information about where their food comes from is very important to this group in addition to how the product is grown, how far it’s traveled to the store, and by whom it was grown.
• Gen Z is a group that prioritizes wellness. As this generation enters the workforce, they will be asking themselves if the workplace is a healthy environment for their mental and physical well-being more than any other generation before them.  This generation has lowered teenage drug use, drinking, and sexual activity.  They are cautious and focused on optimizing their lives so that they are able to realize their wellness and happiness goals more efficiently.  As a generation, they are curious about food and the impact it has on the world.  They are interested in exploring how farms leverage technology, robots, and drones virtually, they’d like to visit greenhouses virtually and they also want opportunities to see the farm virtually.

Overall, we were reminded in this session that there are opportunities to reach each generation and the way we speak to each group should be tailored to them.

Convenience is Key for Fresh Produce Sales

The convenience trend is still on point and data shared in the Power of Produce proves it:

• Value-added products had a big year in 2022 with better-than-average performance driven by fruit as on-the-go and entertaining are back
• Value-added accounted for 14.6% of all produce sales
• Value-added sales reached a record high $10.946B in 2022, a $500M increase over 2021
• Shoppers continue to look for quick and easy solutions to make meal prep more convenient and fun. Garden Highway and Fresh Innovations featured these time-saving and creative solutions in the innovation area.
• Top 5 Value-Added Fruit includes:
  • Melons
  • Mixed Fruit
  • Mixed Berries
  • Apples
  • Mangoes
• Top 5 Value-Added Vegetables include:
  • Lettuce
  • Broccoli
  • Carrots
  • Mushrooms
  • Mixed Vegetables

We are grateful to SEPC for hosting our team and thank FMI for the rich data that will inevitably help marketers better engage with and serve the modern shopper.  Get the full report and receive 40% off when you use the code: FMIPOP40.

Be on the lookout for more blog posts coming soon as we’ll break down these stats with actionable ideas for you to initiate in your business.