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Organics drive growth in supermarket sales

HILTON HEAD ISLAND, SC—Produce is the No. 2 reason (price is first and meat is third) consumers select a supermarket, and organic produce is driving growth in supermarket produce sales, according to Anne-Marie Roerink, a specialist in food retailing who was a speaker at the Southeast Produce Council’s Southern Innovations show here Sept. 28-30. Matt Seeley, head of the Organic Produce Network, moderated the discussion.SEPC-ORGANICS10162017-PANELAnn-Marie Roerink, a food retailing researcher, makes a presentation on organic produce and interacts with the panel: Mark Carroll of Fresh Market, Christian Harris of US Foods and Dave Lessard of Ahold USA.

A panel of veterans in the produce industry agreed, mainly, though Christian Harris, vice president for fresh produce at US Foods, serving 250,000 customers daily, said “price is a problem with foodservice.” Mark Carroll, vice president of merchandising at The Fresh Market and a 35-year veteran of the industry, countered that “organics will draw customers into the store.”

Dave Lessard, vice president of produce for Ahold USA and a 30-year produce executive, agreed. Ahold USA, which operates 775 supermarkets has emphasized organic produce in its stores in the last five years with good sales results, he said. Roerick said the organics shopper is younger, under 35, affluent, uses social media, shops more often and is prone to be a college graduate. Organic produce shoppers spend an annual average of $6,000 in supermarkets, and 45 percent think they will buy more organic produce in the coming years.

Organic produce sales lagged in the Southeast, Roerick said, with a 7.5 percent market share, compared to a national share of 8.4 percent. She pointed out that the Southeast was catching up. Foe the year ended Aug. 6, organic produce grew by 18.6 percent in the Southeast, compared with 13.8 percent nationwide. Organic vegetables make up the larger share in the Southeast, but organic fruit sales are growing at more than twice the rate, she added. Carroll, with long experience in California, said shoppers there had high standards and produce displays should integrate organics. “Southern California shoppers are fanatically devoted to organics,” he said. “Fresh is a supermarket stronghold.”

Roerink warned that retailers must accommodate the Millennial shopper or risk losing their $6,000 in overall sales as they move to another store. “The ‘Free-From’ brand is powerful,” she noted,’ and 35 percent of shoppers think organic produce tastes better. Twenty-eight percent think organic produce is too expensive, and there is no taste difference.”

Harris said organic produce had increased three times in foodservice in the last decade. “Customers are looking for where it came from, and that has spurred the growth of organics in foodservice,” he said. Carroll interjected that organic produce represents “integrity and trust” to shoppers, and Lessard said Ahold had increased organic sales by promoting them on social media platforms. “The key is combining local and organic,” he summed up. 

“Eating with a conscience” is what the shopper thinks when they buy organic produce, Roerick said. “it’s fresh, and grown responsibly and naturally. Sixty-six percent of consumers want organic produce.”