As growing numbers of Americans develop a taste for international flavors and increase their personal disposable income, the timing is ripe for marketers to harvest more U.S. sales of fresh produce.
Indeed, the fruits of such labors can be very profitable, according to a new study by Packaged Facts that lists key trends influencing future growth of the U.S. produce market.
Fruits and vegetables are expected to continue experiencing growth in niche areas as consumers persist in seeking out novel flavors from around the world. Increases in disposable personal income will support purchases of premium fruits and vegetables, including non-GMO, organic, and locally grown types. Also, marketing strategies focusing on health and taste will help expand their appeal.
Consumers’ consumption of fresh produce grew steadily—albeit modestly at about 1.3%—between 2011 and 2016. In its new report, Fresh Produce: U.S. Market Trends and Opportunities, Packaged Facts forecasts moderate annual gains will continue over the next several years through 2021.
“Fruit and vegetable producers benefited from steady growth among the U.S. population, as well as from the fact that all age groups have high usage rates, especially Gen X adults,” says David Sprinkle, research director for Packaged Facts.
Sprinkle continues that fruits and vegetables are expected to continue experiencing growth in niche areas as consumers persist in seeking out novel flavors from around the world.
“Increases in disposable personal income will support purchases of premium fruits and vegetables, including non-GMO, organic, and locally grown types,” he says. “Also, marketing strategies focusing on health and the delicious taste of fresh produce will help fruits and vegetables to expand their appeal and per capita consumption.”
The opportunities seem almost limitless, but as Sprinkle notes, some trends are more impactful than others. And so, here are six of the key trends Packaged Facts reveals will influence future growth in the U.S. market for fresh fruits and vegetables:
Online Grocery Shopping & Delivery Services Inducing Produce Purchases: Millennials and families with small children have busy schedules and often do not have the time to plan and shop for healthy meals. The advent of online grocery shopping appeals to this demographic on convenience, allowing consumers to receive produce and other foods without needing to browse store shelves.
“Produce benefits greatly from online ordering because consumers are increasingly seeking healthy foods, and with the added convenience, they are likely and able to purchase more fresh fruits and vegetables,” Sprinkle says.
Further Convenience with Meal Kit Delivery Spurring Produce Gains: Another iteration of grocery delivery is meal kit delivery, which provides all the ingredients needed to prepare a meal in the correct portions. Meal kits appeal mostly to Millennials and Generation X, especially among single people and men. The convenience allows busy consumers to cook and eat healthy meals incorporating produce, while perfect portion sizes lead to less food waste for single people, who might find many produce options available at the grocery store too large for their needs.
Community Supported Agriculture & Farmers’ Markets Grow from Locavore Movement: Community supported agriculture programs (CSAs) have existed in some areas for a while, but in recent years, they have taken off throughout the country as consumers seek to eat healthy, locally grown produce and to support local commerce. CSAs involve community members pledging support to a local farm by promising to cover the costs of farming operations, and in effect, becoming a stakeholder of the farm. In return, CSA members receive fresh produce from the farm throughout the growing season.
“Direct sales to community members are beneficial to both farmers and buyers, as farmers can have better financial security through sharing the risks of potential bad crops, while buyers can have fresher produce with more variety than might be available in grocery stores, sometimes at a lower cost without middlemen,” Sprinkle says.
Diet & Superfood Claims Spur Produce Gains: Consumers increasingly focused on health looked to special diets and fresh items over the 2011-2016 period. Trendy diets such as the paleo diet and the raw food diet emphasize the healthy benefits of fresh fruits and vegetables while appealing mostly to young people. However, most healthy eaters tend to be older, as they have more age-related health concerns. As such, Baby Boomers are a key demographic for fresh produce purchases. Millennials tend to eat less well because they are often too busy to prepare healthy meals, and their youth theoretically comes with fewer health concerns.
“Fruits with natural sugars are marketed as a healthier alternative to sweets such as cookies and cakes that may be eaten as a snack,” Sprinkle explains. “As snacking becomes more popular throughout the day, ready-to-eat fresh fruits and vegetables represent an attractive option for many consumers on diets as a replacement for sweets and other processed snacks.”
Additionally, people looking to increase nutrient intake have turned to foods deemed ‘superfoods’ as a way to stay healthy, which has increased the popularity of produce such as avocados with both the media and consumers alike, he says.
Exotic Flavor Profiles Heating Up the Market: Ongoing multicultural changes in the U.S. led to tremendous growth in the market for spicy foods over the past half decade. As adventurous Millennials sought out new flavors, hot peppers became incredibly popular. Chili pepper consumption grew 5% annually between 2011-2016. Interest in “super-hot” peppers grew as some people took on “pepper challenges”. Less spicy chili peppers such as jalapeños gained more mainstream appeal as an increasing Hispanic population and growing interest in Mexican and South American cuisine took off, especially among Millennials. As young people acquired a spicier taste, they used chilis more in cooking and shared their recipe ideas online, further exposing people to the spicy trend.
Capitalizing on the Flexitarian Movement: Marketing opportunities exist with meat-eating consumers who increasingly identify as “flexitarian.” Vegans and vegetarians already eat a large amount of fruits and vegetables, but flexitarians who can be persuaded to eat more vegetarian meals or less meat overall will likely increase consumption of fruits and vegetables to get the nutrients that would be present in a serving of meat.