Apr 7, 2007
Fresh-cut Remains Fastest-Growing Trend in Produce Industry

With $12 billion in annual sales, pre-cut, pre-washed and packaged fruits and vegetables remain the fastest growing segment in the produce sector, and the category still has plenty of room to grow, according to a new research report by the International Fresh-cut Produce Association (IFPA).

IFPA’s “Fresh-cut Produce Fuels an America On-the-go,” is a comprehensive “state-of-the-industry” report exploring the current and future fresh-cut marketplace, growth drivers and facts and figures on the fresh-cut produce industry. The report was produced by PakIntell and sponsored by Del Monte Fresh Produce.

According to the report, packaged salads are the second-fastest selling item in U.S. grocery stores, with $2.6 billion in annual retail sales, followed by fresh-cut vegetables at $1.4 billion. The still-young fresh-cut fruit category, which reports $300 million in annual retail sales, is likely to surpass the $1 billion mark over the next three years to four years. The industry boasts $6 billion in annual sales to the foodservice sector.

A number of trends are driving the fresh-cut produce industry’s continued strong growth, according to the white paper:

* The nation’s ongoing obesity epidemic is causing people to find easy ways to eat more fruits and vegetables;

* A federal nutrition panel has recommended changes in the nation’s Food Pyramid that feature increased intake for fruits and vegetables;

* Foodservice sales now top $429 billion a year, and nearly half of all meals are consumed away from home;

* Foodservice establishments – including restaurants, cafeterias and airlines – are increasingly relying on fresh-cut produce to reduce labor costs and lower food safety risks; and

* Consumers continue to seek and demand convenient, high-quality foods that fit into their increasingly busy lifestyles.

“Demand for do-it-for-me convenience has been the big driver behind the tremendous growth of pre-cut, pre-washed and packaged fruits and vegetables for the past 15 years,” IFPA President Jerry Welcome said, “but convenience is now getting a big boost from growing concerns about obesity and health issues in general.

“The big challenge we face as an industry now is to project the convenience we have delivered to America’s home kitchens into other channels. We need to keep pace with an ‘America on-the-go,’ where as many as 20 percent of all meals are consumed in automobiles and half of all meals are consumed away from home.”

Despite record-breaking sales, fresh-cut produce represents only a 13 percent penetration of the total fresh produce market – good news for processors and marketers of fresh-cut fruits and vegetables. The white paper challenges processors to address several key opportunities in order to sustain growth over the next 15 years, including:

* Focusing on the right consumer and determining what new products they truly want, “not just what can be conveniently made for them.”

* Promoting how fresh-cut fruits and vegetables can fit into a healthy, fast-paced lifestyle and providing consumers with more recipes and time-saving tips.

* Diversifying product offerings and searching for new varieties of fruits and vegetables overseas.
* Capitalizing on the merger of salads and protein as a main meal.
* Shortening the supply chain to keep the “fresh” in fresh-cut.
* Creating different offerings for different retail and foodservice channels, including club stores, vending machines, mass merchandise chains, schools and offices.
* Thinking out-of-the-box about packaging, including single-serve, snacking and multi-component offerings.

A PDF copy of IFPA’s “White Paper on Fresh-cut Trends and Packaging” can be downloaded by IFPA members for free at www.fresh-cuts.org.

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