Shopping during the coronavirus pandemic has seen consumers focusing more on home essentials in the center store and stocking up on frozen foods that keep, and making fewer trips to the physical store — all things that impact produce and fresh food sales. A new report on fresh food from Daymon said the category isn’t seeing the dramatic sales numbers of a category like toilet paper or frozen foods, but that could change.
Daymon’s report, “What’s Next in Fresh,” suggests the category could see a huge spike soon due to the economic downturn that will continue through the pandemic and added that “now is the time” to focus on developing private brands in traditional produce.
The economic hardships being put on families during the pandemic are hard to ignore. Daymon’s report said one-third of all American households are suffering from unemployment or a reduction in pay. The Department of Labor has reported tens of millions of people filing for unemployment since COVID-19 was deemed a pandemic.
And according to Daymon, when the American economy hits a downturn, produce and private label see big sales growth. Following the 2008 recession, the report said, “74% of supermarket growth came from fresh foods.”
The report continued: “Retailers achieved this success post-downturn by remaining tuned in to consumer concerns such as fresh product affordability and leveraging their private brands to hold prices and introduce easy meal solutions. This led to nearly a decade of strong growth as fresh departments became the innovation and strategic center of the store.”
The report said key areas for retailers to focus on in the months ahead to generate growth are: promote home-cooked meals, maintain e-commerce growth, and be transparent about food safety.
The report said nearly 60% of consumers will “more frequently” create home-cooked meals after the pandemic. The report said retailers should offer a mix of ready-to-cook entrees and meal kits, offering private brand kits.
The report also said just about half of the shoppers who have been shopping online will continue to buy online after the pandemic and that private brands can play a big role in transparency to earn consumer trust.
“Retailers can help support these customers by offering a private brand retail-ready produce wash,” the report said.
“As this crisis continues to unfold retailers will develop communication tactics around their private brand. Using packer labels in produce will undermine these efforts, so now is the time to focus on developing private brand in traditional produce commodities,” the report continued.