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Industry Viewpoint: Produce industry can do better serving retailers engaging in foodservice

Not long ago, the convergence of foodservice and retail seemed simple. Department stores offered snack bars (think: hot dog, popcorn and ICEE). Convenience stores installed microwaves to heat up the beef stew you might find (if you looked hard enough) beside the motor oil. And grocery store delis just started offering take-home rotisserie chickens in addition to their fried fare.

How times have changed.

Department store snack bars persist, but they may be right beside an in-house Starbucks, just down the aisle from a grocery section recently expanded to offer fresh produce and frozen food.

The C-store microwave is now tucked into a corner. Beckoning locals and travelers alike are prominent fresh and prepared food offerings such as salads and wraps.

In supermarkets — whether it be a Hy-Vee food court in Des Moines, IA, or the Whole Foods café in New Jersey where I recently dined — expansion of foodservice in the grocery is a given.

Traditional restaurants are expanding fresh offerings. Whether apple slices in the kid’s meal or entrees to-go, restaurants have rapidly expanded their fresh and carryout fare.

The consumer has driven this change as Americans spend more of their food dollars on meals prepared outside the home. The U.S. Department of Agriculture pegged spending on meals prepared outside the home at nearly 42 cents of every food dollar in 2007, up from 26 cents in 1971 and 32 cents in 1981. Despite the recent economy, I suspect that mark is still headed toward 50 percent.

Foodservice expansion by retailers has played a key role in offering ready-to-eat options demanded by consumers.

While the blurring of boundaries between retail and foodservice is well-established, I’ve noticed our produce industry trade shows are still divided by retail and foodservice. We have PMA and United Fresh shows for retailers; we have the NRA and PMA Foodservice shows; we have shows specific to convenience.

But fresh and prepared foods are melding together, especially in the retail and convenience sectors, to meet the consumer’s demand for convenient, healthy meal options.

Since produce companies are already meeting the changing demand, I believe we need to re-examine the ways our trade shows — and distribution channels — are divided. This is imperative as each type of food retailer becomes more of a hybrid.

Here are three suggestions:

• An industrywide discussion needs to happen as to whether trade shows are ignoring or excluding new players in foodservice, especially retailers. This would be a modest move toward recognizing the obviously expanding roles of retailers in foodservice.

• Grower-shippers should know that today’s dining and foodservice trends may be reflected in next year’s retailer requests. For example, restaurants noticed early on that consumers desired local and regional product. Retailers have ridden the local wave by highlighting regional produce sources in their merchandising and, at times, seeking new suppliers. (I’m not saying “local” will be the next big thing in supermarket deli chicken, I’m saying that some dining trends can affect future produce merchandising.)

• Realize trends we’re seeing in the U.S. and Canada, like customers requesting more healthy options, are (or will soon be) reflected in international markets. Think Mexico, Eastern Europe, India and China. Convenience may be a greater growth driver in some such markets. How are we positioning ourselves to capitalize on demand for more fresh produce abroad?

Bridging the foodservice-retail divide in the industry is bound to happen; let’s not miss it at the expense of our companies or clients. It is all about what our consumers want, and that is more fresh food and convenience.

As for the fried chicken? I wouldn’t be surprised when the next time I crossed the road to my local grocery the deli’s signage informed me the chicken was humanely raised and antibiotic free ... or cage free ... or certified organic ... or simply coming from chickens fed a vegetarian diet, which many broilers are.

Retail food businesses have changed to reflect consumer changes. Our industry’s trade shows and structure should appropriately reflect that reality.

Anthony J. Totta is founder, chief executive officer and produce consultant for Grow My Profits LLC and a managing partner of the FreshXperts produce consulting group. He has more than 30 years of experience in fresh produce procurement, supply chain management, retail sales, purchasing, wholesale development and distribution.