Study Looks at Projected Fresh-cut Produce Growth,
Packaging and Other Trends
Fresh Cut
November 2004
Experiencing double-digit growth for most of its 15-plus
year existence, the fresh-cut produce industry is poised for even more
phenomenal growth over the next decade and a half. Currently a $12.5 billion
category, it continues to be the fastest growing segment in the produce
sector.
A new study, commissioned by the International Fresh-cut Produce Association
(IFPA) and available to its membership, was released during the association's
ExecTrends conference, held Sept. 27-28 in Alexandria, Va.
Entitled, "Fresh-cut Produce Fuels an America On-the-Go," the
study paints an optimistic future for smart and aggressive fresh-cut produce
entrepreneurs, those involved in pre-cut salad, vegetable and fruit products,
but particularly fresh-cut fruit.
"Cut packaged salads remain the big engine pulling the fresh-cuts
train with over $3 billion in annual retail sales followed by cut vegetables
at $1.7 billion," the copyrighted "white paper" proclaims.
"But coming on fast is cut fruit, currently a $300 million category
at retail but on a trajectory to surpass $1 billion in the next three
to four years."
Second to Bottled Water
Consumers have made packaged salads the second-fastest selling item in
U.S. grocery stores, trailing only bottled water. The movement to fresh-cuts
is helping retailers boost their margins by reducing both labor and sanitation
costs. At the same time, fresh-cut products are helping processors exit
off of the commodity highway and "into the higher price-point, value-added
product lane," the report points out.
Quoting Marvin List, director of fresh-cut operations for Del Monte Fresh
Produce, the report notes that fresh-cut fruit products are "the
candy of the produce world. People don't need to be talked into eating
fruit; it's just naturally good eating," he says, adding that "the
fact that our industry is making it easier for them just helps that much
more."
The "white paper" reviews efforts underway to correct the nation's
growing problem with obesity and points out that quick-serve outlets,
school cafeterias, airlines and foodservice establishments are adding
healthy, produce-centric offerings, including many now incorporating protein
sources.
While the market drivers may be in neat alignment, "that does not
mean fulfilling consumer needs will be easy," the report warns. "Delivering
high-quality, fresh-cut fruits and vegetables to consumers is not the
same as a can of beans. Processors are working with a living, breathing,
organism whose spoilage-spiral begins upon harvest. From that moment,
a race ensues to deliver a fresh-cut produce item at or near its optimum
quality."
The 56-page report, mailed to the membership, advises fresh-cut processors
to: (1) "Focus on the consumer, the right consumer;" (2) "Tell
them about fresh-cut;" (3) "Give them new things to try;"
(4) "Deal with success as fresh-cuts move center-plate and center-stage;
(5) "Shorten the supply chain to keep the 'fresh' in fresh-cut;"
(6) "Create offerings for different retailing and foodservice channels;"
and (7) "Think out-of-the-box about packaging."
Fresh-cut processors are increasingly tracking consumer behavior and lifestyles,
the study informs. "The new consumer focus is picking up steam and
will soon be reflected in new products and packaging that deliver what
consumers want, not just what can be conveniently made for them."
As the industry faces the future, fresh-cut producers are advised to provide
more recipes and time-saving tips to help today's on-the-go consumers
with meals that can be prepared in 20 to 30 minutes or less.
New and Interesting Products
Those who can provide new and interesting varieties of salad greens, vegetables
and fruits are expected to prosper, the report predicts. New varieties
of fruits and vegetables are adding excitement and are being sourced in
the markets of Latin America, Asia and Africa. Identifying and tying up
needed supplies, however, is expected to require effort and commitment.
As the merger of salad and protein continues, "it may also produce
more corporate mergers as companies seek to acquire protein producers,"
the industry is warned. Continued fresh-cut produce growth will bring
with it increased interest from industry giants.
While there has been considerable effort in the past to boost product
shelf life, the focus is shifting. Today, the interest is in shortening
the supply chain to maintain product freshness.
"If we're going to get to where consumers want us to be, especially
with cut fruit, we're going to have to shorten, not lengthen, the span
from harvest to consumption," warns Tom Lovelace of Fresh Express,
quoted in the study.
"Fresh-cut producers are creating products and packaging that will
increasingly position fresh-cuts into a larger array of retail channels-club
stores, mass merchandise chains, vending machines and an even broader
array of foodservice outlets, especially schools and office," the
"white paper" asserts. "Discovering what products sell
best in which channels and aligning the right kind of packaging with those
products will challenge the industry."
As various companies examine how they will package fresh-cut products
in the years ahead, the IFPA study challenges them "to more aggressively
find ways to use their packaging to project a message about the company,
its product freshness and quality, how to use the product, etc."
Packaging Changes
The packaging focus over the past 15 years has been on shelf-life extension,
product quality, and safety-all important-but, as they look to the future,
fresh-cut producers are exploring additional packaging formats, including
single-serve, snacking portions and multi-component salad bowls, the study
adds. "Packaging is more than just a box or a bag; it's a full partner
with the product, and there are few product/package combinations out there
where that is truer than in fresh-cut produce."
For more information on the full report, "Fresh-cut Produce Fuels
an America On-the-go," contact IFPA at: 1600 Duke Street, Suite 440,
Alexandria, VA 22314-3400; phone: (703) 299-6282; e-mail: info@fresh-cuts.org;
Web: www.fresh-cuts.org.
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