University of California

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Fresh-cut Produce Marketing Trends: Focus on the Expanding USA Market

Roberta Cook (Dept of Ag and Resource Economics, UC Davis)

The demand for fresh-cut (value-added) produce was adversely affected by the “Great Recession” (beginning in 2008) but has since recovered and recent growth rates are among the most robust in the fresh produce department. Sales are propelled by consumer demand for convenience and greater willingness to pay for value-added attributes. Packaged salads, having experienced stagnation for many years after the 1996 E.coli 0157:H7 incident in spinach, are finally rebounding. In 2014, retail sales of packaged salads grew by 8% in dollars and 5% in quantity relative to 2013, according to Nielsen. Value-added fruit retail sales increased 9% in dollars and 4% in quantity. Value-added vegetables grew by 11% in both dollars and quantity sold. According to Nielsen, in 2014, 83% of US households purchased packaged salads, while 55% and 56% purchased value-added fruits and value-added vegetables, respectively. These penetration rates show significant growth relative to the last decade. Growth in value-added fruit and value-added vegetables outpaced salads, the leading fresh-cut subcategory, over the last decade. In 2014, salads no longer represented the majority of retail fresh-cut sales, rather they contributed 49% as compared with 29% and 22% shares for value-added fruit and value-added vegetables, respectively.Growth in private label, which accelerated during the economic downturn, has likely contributed to greater affordability. In 2014, retail private label shares ranged from 30% for salads to 34% for fresh-cut fruit and 40% for fresh-cut vegetables. The fresh-cut industry is completely on-point with consumer trends and has a bright future, in both foodservice and retail channels.

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