consumer demand trends and issues in quality and...

Consumer Demand Trends and Issues in Quality and Safety

DR. ROBERTA COOK

Dept. of Ag and Resource Economics University of California, Davis

for UCD Postharvest Technology Short Course

June 20, 2014 Updated April 2015

Fresh Produce Consumption Trends

3.2

12.0 7.8

10.9

17.3 17.2

0.5

9.7

5.0

10.7 12.5

17.2

Weekly $ sales/store

Weekly quantity sold/store Organic Fruit

Organic Veg

Fresh-cut, Organic and Total Fresh Fruit and Vegetable Sales in Key US Food Retailers, % Change 2014 vs 2013

All FruitVeg*

Freshcut Fruit**

Salads

Fresh Cut Veg

*Excludes other produce (such as salad dressings, toppings, etc.), which is 10% of produce dept sales dollars and 5% of quantity. ** Excludes overwrap.

Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen, March 2015. Fresh Coverage Area (FCA) incl key retailers from food, mass/supercenter and club chains, or more than 18,000 stores. It includes UPC, random weight and retailer assigned codes.

Consumer Behavior •  Higher income and socially conscious foodies are

driving demand; their preferences lean to organic, convenience (fresh-cut), flavor, local.

•  The former slide shows that fresh-cut and organics grew whilst quantity (physical volume) sold of the rest of the items in the produce dept declined (since overall quantity sold was stagnant despite the growth in fresh-cut and organics).

•  For mainstream consumers, positive attitudes about wellness benefits of fresh produce not translating into purchases. Improved flavor might help.

•  Perception that produce costs more and may be wasted. Better shelf-life might help.

•  46.5 million people on food stamps (SNAP) in FY2014 (vs 17.3 in 2000) for cost of $73.9B.

Consumer Behavior •  Nielsen Perishables Group scanner data

show that total volume/quantity sold in the produce department is up 11.8% comparing 2013 vs. 2009 (2.8% CAGR).

•  Dollar sales grew nearly 25% in the same time period.

•  Changing product mix toward higher value items (e.g., organics, fresh-cut, specialty), more store formats selling fresh produce, and higher prices account for much of the growth.

Top 10 Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Product

Weekly $ Sales per

Store

Percent Change

vs. 2012

Weekly Vol. per Store

Percent Change

vs. 2012

Avg Retail Price

Percent Change

vs. 2012

Packaged Salad $3,286 6.7 1,235 3.8 $2.66 2.8 Tomatoes $2,545 3.4 1,166 1.2 $2.18 2.2 Potatoes $2,515 1.8 3,821 –2.3 $0.66 4.3 Cooking Vegs $1,743 7.0 1,061 –0.8 $1.64 7.9 Onions $1,564 6.5 1,581 –0.5 $0.99 7.1 Peppers $1,352 3.9 623 3.9 $2.17 0.0 Lettuce $1,334 5.5 724 –3.8 $1.84 9.8 Carrots $913 0.9 549 1.7 $1.66 –0.7 Mushrooms $826 1.2 346 0.7 $2.39 0.5 Cucumbers $714 7.8 735 1.6 $0.97 6.1

Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Top 10 Fruit Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Product

Weekly $ Sales per

Store

Percent Change

vs. 2012


Percent Change

vs. 2012

Avg Retail Price

Percent Change

vs. 2012

Berries $3,841 2.4 1,304 –4.0 $2.95 6.6 Apples $3,072 6.5 1,915 2.4 $1.60 4.0 Bananas $2,756 1.0 4,808 1.4 $0.57 –0.4 Grapes $2,694 3.4 1,275 –0.8 $2.11 4.2 Citrus $2,669 8.9 2,144 3.3 $1.25 5.4 Melons $1,177 –1.4 2,037 –5.3 $0.58 4.2 Avocados $1,071 11.7 1,036 10.3 $1.03 1.3 Stone Fruit $965 5.9 571 5.1 $1.69 0.7 Cherries $645 –7.8 181 –24.8 $3.57 22.6 Specialty $541 11.5 537 1.3 $1.01 10.1 Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Forces Stimulating Fresh Produce Consumption

•  More forces are in play to educate consumers about the benefits of fresh produce (MyPlate, salad bars in schools, PBH, govt and private efforts to increase awareness of the health benefits of fruits and veg, etc).

•  Culinary Institute of America and Harvard School of Public Health Dept of Nutrition Initiative: Menus of Change, The Business of Healthy, Sustainable, Delicious Food Choices. This is designed to introduce more fresh produce on foodservice menus.

•  Stealth health trend in foodservice.

Distribution of U.S. Households by Income Level, Share of Total Fresh Produce Expenditures/Income Level & Ave. Fresh Produce Expenditures/Income Level, 2012

Source: Calculations by Roberta Cook from the Food Institute’s Demographics of Consumer Food Spending, 2014.

$478 14%

$254 8%

$409 17%

$339 13%

$ = Average fresh produce expenditures per income group

% = Percent of total fresh produce expenditures contributed by each income group

$819 31% <$15,000

15%

$15,000-$29,999

18%

$30,000-$49,999

20%

$50,000-$69,999

14%

$70,000-$99,999

14%

$100,000+ 19%

Share of Households

$594 18%

Factors affecting demand for fresh produce

•  Commodity price, consumer income, prices of

substitutes and complements, population growth rates, ethnicity, culture

•  Quality: appearance, flavor, color, shape and size; more breeder emphasis on flavor

•  Info on produce selection, ripening, recipes •  Convenience in prep, usage and consumption;

packaging role •  Shelf-life, postharvest technology •  Consistent availability, year-round supply

Important factors when shopping for fruit/veg, 2014

Source: Primary Shoppers’ Attitudes and Beliefs Related to Fruit and Vegetable Consumption, 2012 vs 2014. Produce for Better Health Foundation

68 64

55 31

21 17 17

13 8

4 2

Freshness

Cost

Taste

Healthy

Family Preferences

Convenient to use

Locally grown

Seasonality

Country of origin

A specific brand

Other

Percent of primary shoppers

Per Capita Consumption of Fruits and Vegetables, All Product Forms

•  Changes in total consumption mask significant changes in:

•  product form •  product mix •  diversity within product segments

0

50

100

150

200

250

300

350

400

450 19

76

1978

19

80

1982

19

84

1986

19

88

1990

19

92

1994

19

96

1998

20

00

2002

20

04

2006

20

08

2010

20

12

2014

P

Processed Veg, Excl. Potatoes

Processed Potatoes

Fresh Potatoes

Fresh Veg, Excl Melon and Potato

Fresh includes fresh-cut and bulk.

Processed includes frozen, dried and canned.

Fresh includes fresh-cut and bulk.

Processed includes frozen, dried and canned. 77 34

Sources: USDA/ERS, Vegetables and Melons Situation and Outlook Yearbook, May 30, 2014 through 2007; and for 2008-2014 USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, 2015. Figures compiled by Dr. Roberta Cook, UC Davis, fresh and processed sweet potato share of total sweet potatoes is estimated; processed vegetables includes lentils and dry peas, and excludes dry beans.

U.S. Per Capita Vegetable Utilization/Consumption, Excluding Melons, 1976-2014P, (all channels, foodservice and retail, includes freshcut), pounds

Poun

ds p

er c

apita 379

343

148

119

US Per Capita Consumption of Select Fresh Vegetables, 1985-2014P (includes fresh-cut and bulk, all marketing channels - foodservice and retail)

Pounds per capita P=Preliminary

Source: USDA/ERS, Vegetables and Pulses Yearbook March 2015.

0

5

10

15

Carrots Bell pepper Broccoli Sweet corn Cucumber

Head Lettuce

Romaine

Leaf

0 5

10 15 20 25 30 35

1985

19

86

1987

19

88

1989

19

90

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

P

7.7 3.6

Lbs.

Per

Cap

ita

U.S. Per Capita Utilization/Consumption of Lettuce, by Type, 1985-2013P (includes fresh-cut and

bulk, foodservice and retail)

All-23.8

12.5

Source: USDA/ERS, Vegetables and Pulses Yearbook May 30, 2014 and unpublished ERS data for leaf and romaine.

Pounds per capita

P=Preliminary Source: USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, 2015, http://www.ers.usda.gov/data-products/vegetables-and-pulses-data/yearbook-tables.aspx.

0

5

10

15

20

25

US Per Capita Utilization/Consumption of Fresh Tomatoes (1985-2014P)

US Fresh Tomato Retail Market Shares (in Lbs) by Key Type, 2013: Story of Market Transformation

Source: FreshLook Marketing

Roma 27%

TOV 22% Grape

14%

Vine Ripe 12%

GH 9%

[CATEGORY NAME]

[VALUE]*

[CATEGORY NAME] [VALUE]

[CATEGORY NAME] [VALUE]

*Mainly mature green

Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, 2011.

0% 10% 20% 30% 40% 50% 60%

Perishability Cost

Seasonality Location grown

Use of pesticides Appearance

Preparation time needed Family won't eat them

Unpredictable taste Genetic modification

Fear of food safety outbreak Health-related diet

Do not know how to prepare Negative media attention

More Fresh Veg Same or Less Fresh Veg

Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Vegetables

Fresh Noncitrus, Incl Melon

Fresh Citrus

Process Citrus

Process Noncitrus

0

50

100

150

200

250

300

350 19

76

1977

19

78

1979

19

80

1981

19

82

1983

19

84

1985

19

86

1987

19

88

1989

19

90

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

(frozen, dried and canned)

US Per Capita Total Fruit Disappearance/Consumption, Including Melons, Pounds 1976-2013, (all channels, foodservice and retail)

Poun

ds p

er c

apita

293 101

55

24 112

282

73 29

102

78

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, October 31, 2014.

Fresh includes fresh-cut and commodity.

U.S. Per Capita Consumption of Selected Fresh Fruit 1985-2013 (all have positive health messages, and all but kiwis have generic promotion*)

Pounds per capita

*Kiwis slashed generic promotion in the late 90’s and were unable to sustain growth and capitalize on a positive health message. Source: Fruit and Tree Nuts

Yearbook, ERS/USDA, October 31, 2014

0

2

4

6

8

10

Blueberries Strawberries Kiwifruit Avocados

US Per Capita Consumption/Utilization of Selected Fresh Fruit 1985-2013, (all channels, foodservice and retail)

pounds per capita

0 5

10 15 20 25 30 35

Orange Grape Banana Apple Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 10-31-14

US Per Capita Disappearance/Consumption of Melons, 1985-2013 (watermelons have generic promotion)

Pounds per capita

0 5

10 15 20 25 30 35

Watermelon Cantaloupe Honeydew Others

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 10-31-14

US Per Capita Consumption/Disappearance of Selected Fresh Fruit 1985-2013

pounds per capita

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 10-31-14

0

2

4

6

8

Mango Papaya Pear Pineapple Peach/Nect.

LIFESTYLE Affluent Modest

Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume

Very High 150+

Start-up Families 143 219 101 29 41 11 108 9.30% HHs with young children only <6 Small Scale Families 130 205 90 26 37 9 97 8.90% Small HHs with older children 6+ Younger Bustling Families 120 199 82 27 36 8 86 5.90% Large HHs with children (6+), HOH <40 Older Bustling Families 147 223 106 33 46 10 127 13.90% Larger HHs with children (6+), HOH 40+ Young Transitionals 147 207 100 33 41 12 90 9.60% Any size HHs, no children, <35 Independent Singles 143 203 100 30 41 11 93 11.60% 1 person HHs, no children, 35-64 Senior Singles 131 196 91 31 42 10 82 7.40% 1 person HHs, no children, 65+ Established Couples 139 204 96 29 39 9 102 11.20% 2+ person HHs, no children, 35-54 Empty Nest Couples 139 210 99 28 39 8 112 11.50% 2+ person HHs, no children, 55-64 Senior Couples 132 202 91 28 38 8 97 10.80% 2+ person HHs, no children, 65+ Total 139 208 96 30 40 9 100 Percent Volume 20.80% 49.60% 17.20% 3.10% 8.00% 1.20%

High 120-150

Why Retailers Love Berry Consumers? They Spend Money

Source: Perishables Group FreshFacts® Powered by Nielsen.

Low 1-50

Plant Varieties and Flavor

Demographic Trends

Projected US Population

Source: www.census.gov

310.233 million 373.504 million

Black 13%

Asian 7% Other

2%

Non-Hisp. Whites 57%

Hispanic 23%

Black 13%

Asian 5%

Other 2%

Non-Hisp.

Whites 66%

Hispanic 16%

2010 2030

Fine Dining Chefs

Creation

Casual Theme Interpretation

Family Dining Interpretation

QSR Interpretation

Non-Commercial Interpretation

Incorporated into Consumer Meal Mix

Foodservice contributes to the evolution of food trends and ethnicity leads the way, Authentic and Fusion,

benefiting fresh produce

Argentine

Brazilian Churrascaria

Peruvian

Oaxacan Szechwan

Vietnamese Thai

Taiwanese

Cambodian

Indonesian

Average Annual Household Fresh Produce $Expenditures in Food Stores, by Ethnicity, 2012

Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

261 270

409

164

307 226 234

386

148

259

All White and Other

Asian Black Hispanic

Fresh Fruit Fresh Vegetables

Age and Generation Terms

• Matures = born before 1946

•  Baby Boomers = born 1946-1964

•  Gen X = born 1965-1980

•  Gen Y = born 1981-1989

• Millenials = teenagers and 20s Source: Lancaster and Stillman, When Generations Collide, 2002

Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

7%

16%

17%

20%

18%

12% 10%

4%

15%

19%

23%

18%

12% 8%

$290

$445

$540 $577

$492 $502

$388

$0

$100

$200

$300

$400

$500

$600

$700

0%

5%

10%

15%

20%

25%

30%

Share of Household by Age Group

Percent Fresh Produce Expend by Age

Fresh Expenditures by Age, $

Distribution of U.S. Households by Age Group and Fresh Produce $Expenditures in Food Stores, 2012

Source: US Grocery Shopper Trends 2011, FMI

When shoppers plan for dinner (percent of shoppers)

All Shoppers Gen Y Gen X Boomers Matures

No plan 2 hours before dinner

Weekend 22 40 27 21 11

Weekday 23 44 31 20 11

Not sure if eating in or out 2 hours before dinner

Weekend 15 28 20 13 9

Weekday 12 18 15 11 6

Changing Attitudes

Over the past decade, consumers have been redefining quality across virtually every food and beverage category

Yesterday Today Emerging

Scientific Organic, natural

Processed Fresh / less processed

Industrial Local, personal

Engineered Real, authentic

For personal health For personal wellness For community health

Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

Source: Hartman Salt, June 30, 2011

VEGETARIANS WITH BENEFITS Ethical Eater A person who only or mostly eats food that meets certain ethical guidelines, particularly organically grown food and humanely raised meat, poultry and fish. Flexitarian A person who eats a mostly vegetarian diet, but who is also willing to eat meat or fish occasionally. Nutritarian A person who chooses foods based on his or her micronutrient content. Pescetarian A person who supplements a vegetarian diet with fish.

Source: Hartman Salt, June 30, 2011

VEGETARIANS WITH BENEFITS Rawist A person who eats only unprocessed, unheated and uncooked food, especially organic fruits, nuts, vegetables and grains. Vegangelical An extremely zealous vegan who is eager to make other people believe in and convert to veganism. Vegivore A person who craves or has a special fondness for vegetables. VB6 From the saying, "vegan before 6," a person who eats a vegan diet before 6:00 PM, and then whatever he or she wants after that.

U.S. Consumers Rank Key Factors Affecting Their Produce Purchase Decisions, Fall 2009 v. Fall 2008

Source: Lutz, Brand Performance and Produce, Produce Business, Jan. 2010.

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Fall 2009 Fall 2008

On a scale of 1-5 with 5 being most important.

“Sustainability” Trend from the Consumer Vantage Point – Hartman Research Results

•  Most consumers have very limited understanding or usage of the concept of sustainability

•  In general, food terms as used by the food industry are not understood: functional foods, IPM, food miles

•  Sustainability is becoming an umbrella term for health, wellness, organics, environmental consciousness, fair trade, simple living, buying local, etc.

•  Personal sustainability linked to environmental sustainability for some

Hartman Organizes the World of US Organic Consumers, 2010

18% 46.5%

10.5%

CORE MID-LEVEL PERIPHERY Source: Beyond Organic & Natural report, The Hartman Group, Inc. February 2010

25% don’t

purchase organics

Index of US Organic Fresh Produce Consumption by Spectra Lifestyle/Behavior Stage, 2010, All Channels

Source: Spectra BehaviorScape: Total Consumption/Spectra 2010 Jan/Homescan Product Library


Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume

Very High 150+

Start-up Families 137 170 106 123 116 92 123 10.6%

HHs with young children only <6

Small Scale Families 118 131 79 73 90 76 93 8.7%

Small HHs with older children 6+

Younger Bustling Families 106 127 89 83 89 82 94 7.0%

Large HHs with children (6+), HOH <40

Older Bustling Families 87 117 87 68 78 82 90 9.8%

Larger HHs with children (6+), HOH 40+

Young Transitionals 115 137 81 78 85 75 93 9.9%

Any size HHs, no children, <35

Independent Singles 96 74 109 110 78 65 87 10.7%

1 person HHs, no children, 35-64

Senior Singles 86 68 72 71 78 70 74 6.8%

1 person HHs, no children, 65+

Established Couples 136 172 122 155 97 87 125 13.9%

2+ person HHs, no children, 35-54

Empty Nest Couples 164 146 131 85 117 90 124 12.2%

2+ person HHs, no children, 55-64

Senior Couples 119 135 88 74 99 74 97 10.6%

2+ person HHs, no children, 65+

Total 115 130 98 93 91 79 100

Percent Volume 15.3% 22.7% 17.8% 11.2% 16.0% 17.1%

High 120-150

US Consumer Reasons for Buying Organic Fresh Produce, 2011

•  61%

49%

48%

44%

40%

15%

Avoidence ofchemicals

Personal health

Better taste

Environmental/Socialresponsibility

Nutrient content

Other

Source: Fresh Trends 2011, Vance Publishing

69%

23%

20%

20%

11%

8%

7%

7%

6%

6%

6%

Too expensive

Can't tell if really organic

Only recently began purchasing organic

Not readily available

Don't really believe they're more nutritious

Don't really believe they're safer

Can't find brand(s) we like

Don't want to change from products we use

Don't stay fresh as long as nonorganics

Often do not look appealing

Certification requirements increasingly weak

Organic Users*: Reasons for Not Using More Organics

Source: Organics 2008 Report, Hartman Group

*Limited organic buyers (Primary HH shoppers who have purchased organic, but fewer than 4 product categories, in past 3 months) (n=537)

US Consumer Reasons for Buying Local Produce


96%

93%

89%

88%

87%

80%

69%

50%

46%

94%

89%

87%

84%

79%

59%

Freshness

Better taste

In season

Price

Confidence in food safety

Support for local community

Enviro-friendly

Connection to farmers

Organically grown

2011

2010 NA

NA

NA NA= not available

86%

75%

61%

56%

39%

39%

31%

30%

24%

Freshness

Support local economy

Taste

Like knowing source/how produced

Nutritional value

Price

Enviro impact of long distance transportation

Appearance

Long term personal health effects

Reasons for Buying Locally Grown at Retail, 2014

Source: FMI U.S. Grocery Shopper Trends 2014

Definition of “Locally Grown” Products according to Shoppers, 2011

Source: US Grocery Shopper Trends 2011, FMI.

grown in my state

44%

grown within certain mile

radius 41%

grown on family-owned farm 13%

other 2%

Maximum Distance a Food Item Can Travel from Source to Store to Be Called “Local”


25 miles or less 26%

26-50 miles 28%

51-75 miles 7%

76-100 miles 26%

More than 100 miles 13%

Food Safety Attitudes

How confident are you that the food in your supermarket is safe?

Source: FMI US Grocery Shopper Trends, various years

84% 66%

89% 83%

'97 '99 '02 '04 '06 '08 '10 12 14

Completely or mostly confident

Source: US Grocery Shopper Trends 2011, FMI, 1,026 shoppers

Specific Areas of the Store and Supply Chain: “I trust the products sold there are safe”

Strongly Somewhat Somewhat Strongly Agree Agree Disagree Disagree

Fresh produce 58% 38% 3% 1% Over-counter meds. 58% 34% 2% 1% Grocery stores 54% 39% 5% 1% Fresh meat, poultry & fish 53% 41% 3% 1% Prepared meals 41% 45% 6% 7% Pet food 37% 24% 4% 2%

Which food-related items constitute a serious health risk (according to US shoppers)?

2011 Bacteria or germs 50% Residues from pesticides 40% Product tampering 39% Terrorist tampering 36% Food from China 28% Antibiotics/hormones in livestock 27% Eating food past "use by" date 23% Irradiated Foods 21% Foods produced by biotechnology 17%

Declining since 1992


US Consumer Confidence in the Safety of Fresh Produce by Source, 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Farmers' Market Supermarket Mass Retailer

Not confident at all

Mostly not confident

Neutral

Mostly confident

Very confident


Very, 5%

Somewhat, 44%

Not Very, 34%

Not at All, 16%

2010: How comfortable are you that food grown/produced outside the U.S.

is safe?

Source: U.S. Grocery Shopper Trends 2010,

FMI.

Changes in consumer use of information technology influences marketing tactics and communication vehicles

– The fresh produce industry needs to find creative ways to communicate with consumers via cyber channels and social networks with the aim of being relevant:

– Value messaging – Cater – to health and wellness – Create – convenient and quality eating experiences

– Celebrate – cooking, preparation, social eating experiences, indulgence

• Flavor is where it’s at! • Creative marketing and merchandising that communicates a product’s benefits to consumers

• Reaching consumers in multi-channels and utilizing mobile technology can stimulate purchases

Conclusions: Need for Shopper-Centrism

•  Unmet potential for fresh produce demand expansion in foodservice channels, potentially convenience stores, dollar stores and pharmacies

•  Consumption gains in some items are at the expense of others, we need to understand more about the role of substitutes and complements

•  Firms need to better understand diverse consumer segments and their needs at the individual produce item level

•  Consumer research is exploding due to the internet •  Social media is making it much more cost-effective

and feasible to conduct micro marketing

Conclusions

•  Continuing reduction in the unemployment rate will help

demand •  Changing public policy, industry-govt. partnerships like PBH,

trade association and firm-level efforts may gain traction and change consumer behavior – not just attitudes; time will tell

•  Tell your story, retailers will increasingly support you •  To be healthy it must be safe, invest in food safety, don’t

risk relinquishing this positioning! •  Consumer expectations growing for industry accountability,

making traceability, sustainability, social responsibility and food safety standards are ever more important

Conclusions

Supplemental Information

0%

20%

40%

60%

80%

'96

'98

'00

'03

'05

'07

'09

'11 Shoppers’ concern about nutritional content

and evaluation of diet

39

67

Source: FMI Trends in the US Consumer Attitudes and the Supermarket, various years

very concerned about nutritional content

diet could be healthier


How often do shoppers use a store’s nutrition label guidance to determine which item to purchase?

Always 7%

Frequently 34%

Occasionally 32%

Rarely 20%

Never 7%


Adoption of Social Media by Gender: Percent of Shoppers Using Various Social Networks

All Shoppers Men Women

Facebook 68 57 72

YouTube 26 30 24 LinkedIn 12 13 12 Twitter 12 15 10 MySpace 9 11 8 Blogs 8 10 7 None 26 31 24


Adoption of Social Media by Marital Status: Percent of Shoppers Using Various Social Networks

All Shoppers Married Single

Facebook 68 64 72

YouTube 26 22 31 LinkedIn 12 13 11 Twitter 12 10 14 MySpace 9 6 10 Blogs 8 8 8 None 26 30 23


Adoption of Social Media by Generation: Percent of Shoppers Using Various Social Networks

All Shoppers Millennials Gen X Boomers Matures

Facebook 68 97 83 62 48

YouTube 26 54 37 36 7

LinkedIn 12 9 27 9 2

Twitter 12 28 18 10 3

MySpace 9 12 12 9 3

Blogs 8 22 15 5 1 None 26 2 10 29 49


Activities shoppers would undertake based on social networking recommendations

Try new restaurant 77% Make new recipe 70% Purchase new food 62%

Shop at new grocery store 56%


Tools to help US shoppers learn more about food must be offered in various formats

All Shoppers Millennials Matures

Percent of Shoppers Who Use

1. online/mobile recipes 93 89 73

2. paper recipes 91 95 87

3. recipes with sales specials 80 90 70

4. how to videos 54 64 40

5. cooking classes 43 65 25

6. online wine tips 41 54 25

7. in-store wine classes 32 48 13


US Consumer Sustainability Efforts, 2011

Sustainability is a macro trend that will continue to do well in the future but within limits. Green products must still be functional, affordable and measure up to their conventional counterparts. Organic fresh produce a gateway category.

Behaviors requiring little sacrifice (reusing plastic grocery bags, recycling, reusable bags) will likely see continued growth.

•  Recycling plastic rose from 62% in 2008 to 75% of shoppers in 2011.

•  Paper recycling jumped from 63% to 74% of shoppers.

•  Can recycling moved from 70% to 78% of shoppers.


US Shoppers with stronger environmental tendencies are:

• Women 66%

•  Generation X, especially female X 71%

• High-income shoppers 72%

• Warehouse club store shoppers 72%

• Organic/specialty store shoppers 83%

• Highly concerned about nutrition 73%

• Highly concerned about food safety 72%

• Avid circular readers 73%

High produce consumers


Meal Preparation in US Households, 2011 In households with two or more people: • Woman does all the cooking: 70% • Shared responsibility: 23% • Someone else does all the cooking: 6%. Shopper eating habits: • Home-cooked dinners: 5 days/week • Eating out: 1 day/week • Takeout/ordering in/drive through: 1 day/week. Shopper knowledge about preparing fresh produce: • Very knowledgeable: 44% • I manage, but I’m no expert: 44% • I need help: 9%.

Source: US Grocery Shopper Trends 2011, FMI. Survey of 2,048 shoppers.

Factors Associated with the Choice to Eat In or Dine Out, 2008 vs. 2011

Percent of Shoppers 2008 2011 Difference

Cooking Dinner Time 48 36 -12 Price 12 31 +19 Healthfulness 40 33 -7 Eat Out Time 30 28 -2 Price 36 42 +6 Healthfulness 34 30 -4


Level of comfort with foods from various sources (percent of shoppers) broken down by gender and generation

Source

Very comfortable

Somewhat comfortable

Total

Total Men

Total Women

Total Millennial

Total Mature

United States 64 33 97 97 97 96 97

Canada 48 44 92 95 91 94 93

Western Europe 17 45 63 69 59 89 49 Latin and South America 12 51 63 76 58 65 51

India 6 27 34 43 29 59 14

China 6 24 30 36 28 50 13

Who should be responsible for ensuring that food is safe?

8%

12%

25%

32%

33%

55%

10%

10%

29%

27%

29%

51%

10%

9%

28%

28%

35%

58%

Farmers

Consumer groups

Food stores

Government institutions

Manufacturers / Processors

Myself as an individual

2011

2010

2009



Where shoppers believe most food safety problems are likely to occur (percent of shoppers surveyed)

2005 2006 2007 2008 2009 2010 2011

Food processing & manufacturing plants

30 32 45 53 57 50 54

Restaurants 20 18 11 9 8 11 10

Distribution centers

11 10 9 9 9 11 8

Home 18 16 9 5 4 7 8

On the farm 1 1 6 5 5 5 5

During transportation

5 4 3 3 3 4 3

Grocery stores 5 9 3 4 3 2 3

Not sure 10 9 1 12 9 11 9

Index of US Conventional Fresh Produce Consumption by Spectra Lifestyle/Behavior Stage, All Channels

Source: Spectra BehaviorScape: Total Consumption/Spectra 2007


Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % $

Start-up Families 69 53 67 80 40 44 63 5.8% HHs with young children only <6

Small Scale Families 69 92 73 42 39 39 68 4.7% Small HHs with older children 6+

Younger Bustling Families 50 39 49 64 33 35 49 4.1% Large HHs with children (6+), HOH <40

Older Bustling Families 267 153 177 75 75 190 26.2% Larger HHs with children (6+), HOH 40+

Young Transitionals 71 29 69 77 36 46 61 6.6% Any size HHs, no children, <35

Independent Singles 198 92 135 66 51 67 125 16.0% 1 person HHs, no children, 35-64

Senior Singles 45 51 58 35 34 38 44 3.4% 1 person HHs, no children, 65+

Established Couples 141 91 129 105 55 61 109 12.3% 2+ person HHs, no children, 35-54

Empty Nest Couples 87 132 101 47 44 56 96 9.2% 2+ person HHs, no children, 55-64

Senior Couples 111 212 105 47 45 50 128 12.6% 2+ person HHs, no children, 65+

Total 110 124 101 80 46 52 100

Percent Total $ 33.6% 37.3% 7.6% 16.0% 5.2% .4%

Very High 150+ High 120-150

154

Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Top 10 Organic Fruit Sales and Pricing in Select US Food Retailers, 2013 vs 2012

Organic Product

Weekly $ Sales per

Store

Percent Change

vs. 2012


Percent Change

vs. 2012

Avg Retail Price

Percent Change

vs. 2012

Berries $350 16.3 91 8.7 $3.83 6.9 Apples $228 25.8 111 18.0 $2.06 6.6 Bananas $102 28.0 122 26.7 $0.84 1.1 Citrus $96 24.2 40 14.8 $2.37 8.2 Grapes $73 20.9 25 17.4 $2.86 3.0 Avocados $45 20.8 40 18.9 $1.13 1.6 Stone Fruits $23 43.7 9 27.8 $2.58 12.4 Specialty Fruits $23 46.0 17 18.5 $1.34 23.2 Pears $21 12.7 10 2.3 $2.14 10.1 Value-Added Fruit $10 35.3 3 33.0 $3.65 1.7

Top 10 Organic Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Packaged Salad $678 17.3 171 16.6 $3.97 0.6 Carrots $206 12.5 107 9.4 $1.92 2.9 Cooking Greens $152 40.4 54 32.7 $2.81 5.8 Lettuce $145 9.3 43 3.7 $3.35 5.4 Tomatoes $130 18.6 35 17.7 $3.69 0.7 Onions $98 7.4 69 4.0 $1.41 3.3 Cooking Veg $69 25.3 25 14.4 $2.78 9.6 Celery $64 15.8 23 7.0 $2.76 8.2 Potatoes $59 15.2 47 10.5 $1.25 4.2 Value-Added Veg $39 25.1 12 22.6 $3.16 2.0 Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Organic Product

Weekly $ Sales per

Store

Percent Change

vs. 2012


Percent Change

vs. 2012

Avg Retail Price

Percent Change

vs. 2012

Private Label Sales of Key Fresh Produce Categories in US Supermarkets: Private Label Share of Total Category Sales, (52 week year-ending Sept. 25, 2010)

Source: United Fresh Foundation Fresh Facts, 2011

48.2%

34.2%

20.5%

19.5%

16.3%

9.8%

7.6%

7.5%

6.2%

Prepared Fruit

Citrus

Potatoes

Pack. Salads

Carrots

Apples

Lettuce

Mushrooms

Prepared Veg

Millions

Note: Private label fresh produce sales are 10.4% of total fresh produce sales vs. 6.8% in 2005. In 2010 private label produce sales were

$3.1B in stores tracked by Nielsen.

16%

30% 30%

20%

3% < 25% of the time

25-49% of the time

50-74% of the time

75-99% of the time

100%

Frequency of Purchase of Private Label Fresh Produce, 2011, (of the 67% of US consumers purchasing private label fresh produce)


36%

56%

7% 1%

Excellent

Good

Fair

Poor

Rating Private Brand Products at the Primary Store, 2011

Source: U.S. Grocery Shopper Trends 2011, FMI.

Reasons US Consumers Purchase Branded Fresh Produce, 2011


6%

8%

31%

44%

46%

57%

Packaging

Other

Trust

Coupons

Promotions

Consistency

USA Online Coupon Usage Grows

•  More than 55.7 million Americans use online coupons, compared to 49 million in 2010, 25% of the population.

•  Within the first six months of 2012, 28.1 million Americans have not used a Sunday newspaper as a source of couponing.

•  Those who print coupons off the Internet have an average household income of $96,900, 20% more than the average household income.

•  •  Digital coupon users make 23% more shopping trips and spend

50% more annually compared to the average shopper.

Source: Coupons.com

Importance of Local Fresh Produce to Consumers

17% 4% 4%

15%

5% 6%

21%

19% 22%

27%

35% 39%

21% 38% 29%

2009 2010 2011

Very important

Fairly Important

Neutral

Fairly Unimportant

Not at all important

48%

73% 69%

Source: PMA/Hartman, Identifying Consumer Trends in the Produce Category, 2011.

Importance of Local Fresh Produce at Restaurants

5% 4% 7% 5%

33% 44%

33% 32%

22% 16%

2010 2011

Not at all important

Fairly Unimportant

Neutral

Fairly Important

Very important

55% 47%


Farmers’ Markets at Hospitals

Kaiser Permanente Farmers’ Market Program

§ 49 markets nationally, started in 2001.

§ As a result of coming to the market: •  76% report having increased their intake of fruits & veg.

•  71% report consuming at least “a few more kinds” of fruits and veg.

•  Working with Sysco to distribute “local” produce to their hospitals

Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Fruit


0% 10% 20% 30% 40% 50% 60%

Perishability Cost

Seasonality Location grown

Use of pesticides Appearance

Preparation time needed Family won't eat them

Unpredictable taste Genetic modification

Fear of food safety outbreak Health-related diet restrictions

Do not know how to prepare Negative media attention

More Fresh Fruit Same or Less Fresh Fruit


Why US consumers buy fresh vegetables, among those who report buying more vs. those who are not, 2010

0% 20% 40% 60% 80%

Eating healthier

Source of vitamins, minerals

Freshness

Cooking at home more

Low in calories

Convenient snacks

Reduce risk of disease

Reduce food expense

Tastes good

Eating less meat

Eating less processsed food

More Fresh Vegetables

Same or Less Fresh Vegetables

Older Generations Are More Concerned with Eating Fresh Foods

Source: The Hartman Group, Acumen, 2013

46% 45%

9%

Describes me well

Describes me somewhat

Doesn't describe me

7%

26%

67%

10%

46%

45%

10%

51%

38%

9%

52%

39%

Doesn't Describe Me

Describes Me Somewhat

Describes Me Well

Silent Gen.

Baby Boomers

Gen X

Gen Y


Policies that US shoppers say they want from their produce providers, 2010

0% 10% 20% 30% 40% 50% 60% 70% 80%

Food safety Less pesticides used

Only legal workers Fair trade practices

Worker saftey programs Support for local community

Reduced pollution Eco-friendly packaging

Energy conservation Water conservation

Smaller carbon footprint Worker benefits

Organic growing techniques Public education programs

Race and cultural diversity Alternative energy

All Shoppers

Farmers' Market Shoppers

64%

60%

59%

56%

55%

54%

No pesticides

No herbicides

No growth hormones

No artificial ingredients

No antibiotics

No GMOs

Distinctions Consumers Make between “Organic” and “Natural”

Source: The Hartman Group, 2013

46%

45%

49%

56%

45%

46%

Meaning of Organic Meaning of Natural


In the past 12 months, have you stopped purchasing any food product because of safety concerns? 2006-2011

Percent Yes 2006 2007 2008 2009 2010 2011 All Shoppers 9% 38% 26% 31% 14% 12%

Source: FMI US Grocery Shopper Trends 2011

2006 to 2011: What food products did you stop purchasing in response to food safety concerns?

Peanut Products 74 - - 74 30 9 Beef / Poultry 64 15 20 7 25 6 Seafood 5 2 2 1 4 3 Fruit / Veg – Net 8 84 34 32 23 39 Spinach - 74 25 14 11 13 Lettuce - 16 6 5 5 4 Bagged Salad - 9 6 2 2 4 Tomatoes - - - 16 2 3 Other 21 5 51 12 32 48

- =Not available

Percent “Yes” 2006 2007 2008 2009 2010 2011

US Consumers’ Primary Concerns about FFV Safety: Overall – concerns mentioned by anyone; and concerns of consumers who reported not being confident v. those confident or unsure about the safety of produce, 2011


23%

19%

13%

9%

8%

8%

5%

13%

30%

27%

10%

3%

6%

8%

9%

3%

22%

19%

13%

10%

9%

8%

5%

14%

Grower handling / sanitation

Routine pesticide use

Possible food safety outbreaks

Not knowing if food bought is subject of outbreak

Eating fresh produce raw

Time require to find outbreak source

Not knowing who grew the produce

No concerns about produce safety

Overall

Not Confident

Confident or Unsure

consumer demand trends and issues in quality and...

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