Deloitte study sees huge growth potential in fresh foods
Fresh food items are a cornerstone of the private brands industry, with retailers like Walmart and 7-Eleven reporting this year that fresh foods have helped boost sales.
A new study from market researcher Deloitte adds to the fresh food fandom, reporting that more than 60% of consumers allocate a third of their average monthly grocery budget to fresh foods and that 92% of consumers say price is the deciding factor in their purchase — a key consideration for store brands.
The study, “The Future of Fresh,” surveyed 2,000 consumers and 153 fresh food industry executives to take the pulse of the category. Perhaps most notably, the study found that two-thirds of consumers have increased spending on fresh foods. Other notable results: 80% of consumers actively seek healthier versions of the foods they buy and more than 75% of consumers avoid preservatives and chemicals in their food.
Just last week, Walmart commented on fresh foods in helping to drive a strong third quarter and healthy spike in overall sales. Brett Biggs, chief financial officer at Walmart said that fresh foods offerings helped drive a third-quarter sales increase.
Despite the surge, the Deloitte study noted that some challenges remain for fresh foods, as the total sales of the category are continuing to be outpaced by overall food sales. The retailers in the report pointed to spoilage, storage, product pricing and shelf life as issues prohibiting some fresh foods growth.
Another issue, per the study, is that only 38% of organizations have a partly or fully implemented AI-based warehouse management system in place to track fresh food inventory and just shy of 3% of companies are using in-store technologies to enable shoppers in the aisle or at home to access product information on their fresh items via a mobile device.
Store Brands sister publication Progressive Grocer will be releasing a special report in December titled: “Ingredients for Growth: a Progressive Grocer Special Report on the Future of Food.” Request a copy here.
“Despite the prominence given to fresh foods in stores, growth rates are
not living up to their potential,” said Barb Renner, vice chairman and U.S. consumer products leader, Deloitte LLP. “Retailers should better understand and centralize management of the fresh food category to help address the issue from not only the consumer demand side, but also the manufacturing and retail side.”