Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Thursday, May 10, 2007

On taking a trip to the supermarket

One of the FMI U.S. Grocery Shopper Trends 2007 looks at the trip to the supermarket, dissecting it nine ways to Sunday. One easy-to-digest number is that the average number of weekly visits to shop for food has declined to 1.9 in 2007, down from 2.1 in 2006 and 2.2 in 2005.

Before I get into that highly technical research, I would like to define what makes a trip to the supermarket a pleasant affair for me:
1. I have a short list of items (my wife makes the list) and I know where they are.
2. They are playing my tune; background music - typically good time hits of the 60s, 70s and 80s - is helping me pass the time.
3. Free food: sampling back in the meat or cheese department, perhaps?
4. Helpful smile in every aisle - and especially the checkout aisle: I am not a fan of the self-checkout system. By the way, FMI offers insights into self checkout and seems to focus only on why people "like" self-checkout (i.e., like when only purchasing a few items, like because it is faster, like because of greater privacy). There is no table showing why people detest self-checkout.

Back to the FMI research:

Who are those among us that "very much enjoy" the main stock-up shopping trip (28% overall)?
Spend more than average (32%)
Shopped aged 65 or older (34%)
Lower income (36%)
Satisfied with nutrition at store (38%)
Don't trust restaurant food (44%)
Organic/specialty store shoppers (61%)

That 61% number for organic/specialty store shoppers is more than double the overall average. Whole Foods and Wild Oats simply offer a better experience than other stores.

On the issue of store satisfaction: On a scale of 1 to 10, the average satisfaction score consumers gave their primary store is 7.9, down from 8.0 in 2006 and 8.1 in 2006. More troubling is the fact that 19% of shoppers rate their primary store at 6 or lower, up from 13% last year and 9% two years ago. The FMI says those most satisfied at "matures" (8.4) shoppers in the Midwest (8.3) , those who are loyal to organic/specialty stores (8.4) and those who like to shop for groceries (8.6).

Among about 1,100 surveyed, here is a table that shows where consumers purchase produce:
Supermarket 63%
Supercenter 19%
Warehouse club 3%
Discount store 1%
Organic/specialty 3%
Limited assortment 5%
Somewhere else: 6%

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Torrey testifies

This release today from the Agricultural Coalition for Immigration Reform.....


LEADING GROWER CALLS FOR ACTION ON IMMIGRATION REFORM

Maureen Torrey, a national leader in the fresh produce and dairy industries, testified before the House Small Business Committee to warn of the dangers of continued Congressional inaction on immigration reform. Torrey, an 11th generation farmer whose family produces vegetables and milk in western New York, called on Congress to move beyond debate and to finally enact comprehensive legislation.

Torrey described a status quo full of contradiction, dysfunction, and dangers for agricultural producers, farmworkers, and local communities. Since 1981, Torrey Farms has cooperated with the New York State Department of Labor to recruit and refer workers. Every job opportunity is filled by these referrals.

Yet, cooperating with the state agency has provided no assurance of a stable or legal workforce. Last fall, Immigration and Customs Enforcement agents kicked in the door of one of the farm’s housing facilities and rounded up 34 workers who had been placed in these jobs by the state labor department. “Put simply, one arm of government recruits and refers our workforce, and another arm of government takes it away. It is a crying shame that our great nation has failed to implement a rational legal system,” Torrey testified.

The dangers go well beyond the livelihoods of individual producers or farmworkers. Torrey described the payroll, taxes, small business job creation and positive economic ripple effects that farms like hers and those of her neighbors have in their communities. She also shared with the Small Business Committee data developed in a study by New York Farm Credit which forecasts the demise of at least 900 farms and the loss of almost $200 million in production value if Congress fails to enact stabilizing reforms this year.

Torrey’s testimony came at a time when nearly all eyes are focused on the Senate, where efforts to broker a new immigration deal are underway. For agriculture, Torrey called for an overhaul of the existing H-2A agricultural worker program, and an opportunity for experienced and trusted farmworkers to earn legal status subject to strict conditions, including years of future commitment to farm work.

Such reforms are features of the Agricultural Job Opportunity, Benefits, and Security Act of 2007, or AgJOBS (S.340 and H.R.371). AgJOBS, first negotiated in 2003, enjoys broad bipartisan support as the agricultural element of a comprehensive immigration reform solution. “In my own state, we have the support of almost all our Republican House members, and both our Democratic U.S. Senators. We urge Congress to finally get the job done, this year,” Torrey concluded.


TK: Torrey has been on Capitol Hill in season and out of season in the past year. Arguably, no member of the trade has done more for this issue. If - no, when - immigration reform passes this year, Torrey's influence will not be overlooked.

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FMI Study: Shopping strategy

We are funny creatures, we consumers. The FMI released its U.S. Grocery Shopper Trends 2007 survey, and it shows we indeed are moving targets.

It is interesting to see how FMI evaluates and describes the behavior of shoppers, and I think they probably give us too much credit. For example, consider the wording of this research highlight.
From the news release:

Some shoppers appear to be adopting a dual primary store strategy, playing to the strengths of different formats. They are stocking up on most dry groceries and nonfood items at price discount stores, while buying meat, produce and frozen, natural and organic foods at conventional supermarkets.

TK: A "dual primary store strategy" has never crossed my mind. We like to shop at Hy-Vee and will occasionally hit a Wal-Mart or Aldi. Typically, not much premeditation is involved.

This new shopping pattern, combined with cost concerns, may benefit supercenters, which continue to gain ground as shoppers’ primary store, growing to 24 percent, up from 2006. Conventional stores are the primary outlet for 61 percent, down from 64 percent. Store performance ratings, however, raise questions about whether this trend will continue.

TK: A twist in the plot?

Overall shopper satisfaction with store performance declined slightly to an average of 7.9 percent, from 8.0 percent in 2006. Ratings of supercenter performance declined most significantly to 7.5 percent, from 7.8 percent in 2006 and 8.0 percent in 2005. Consumers gave conventional stores an 8.0 performance rating. The Trends report detected some erosion in the performance ratings for store features most important to shoppers. Forty percent of consumers rate their primary store "excellent" in being clean and neat — down from 42 percent in 2006 and 46 percent in 2005. High-quality produce is rated "excellent" by 34 percent — down from 37 percent and 38 percent in the previous two years.

TK: Here is the one stat that always seems to stay the same. The number one feature when consumers select a primary store is high quality fruits and vegetables. The FMI survey said that 77% of all shoppers rated "high quality produce" as very important when choosing a primary store, compared with 75% that said a "clean, neat" store and 73% who said "high quality meat."

Remember what I said about consumers being a puzzle? The following illustrates the point. When asked which is the most important factor in selecting your primary grocery store, here are the responses.
For all shoppers:
Low prices: 31%
Convenient location: 13%
Clean, neat store: 10%
Items on sales or money saving specials: 9%
High quality fruits and vegetables: 7%
High quality meats: 6%

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FMI reports on consumer confidence: Food safety

The FMI news release on their study about consumer confidence is found here.

Some highlights;
Foodborne illness outbreaks and high energy costs are significantly changing consumer shopping behavior and attitudes, according to the Food Marketing Institute (FMI) U.S. Grocery Shopper Trends, 2007.

The number of consumers "completely" or "somewhat confident" in the safety of supermarket food declined from 82 percent in 2006 to 66 percent — the lowest point since 1989 when the issues of pesticides in apples and contaminated grapes were widely reported.

Consumer confidence in restaurant food is even lower at 43 percent. "These findings send a strong message to the entire food industry," said FMI President and CEO Tim Hammonds. "All of us need to work together to be sure our consumers continue to receive the high quality, affordable food they have every right to expect."

The Trends survey found that safety concerns prompted 38 percent of consumers to stop purchasing certain foods in the past 12 months — up from 9 percent in 2006. Among those who stopped buying products, the items most often mentioned were spinach (71 percent), lettuce (16 percent), bagged salad (9 percent) and beef (8 percent). The survey was conducted in January 2007, when the outbreak linked to spinach was still in the news and illnesses associated with other foods were starting to make headlines.

TK: The FMI report says that confidence in food safety varies widely, and shoppers with children are "much more doubtful" of food safety. In addition, FMI said that consumers who shop at organic specialty stores are also more skeptical of food safety. Those shoppers with more confidence in food safety were men, the youngest and oldest shoppers, Midwesterners and consumers not concerned with the nutritional value of the foods they eat.
The restaurant numbers FMI produced were stand alone; they have no comparative figures from previous years. Still, they are staggering. The FMI survey says 10% of consumers are very doubtful and 48% are somewhat doubtful of food safety at restaurants. Wow.

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Five second rule

Did you ever wonder about the origin of the 5-second rule? You know, it is the folk wisdom that says dropped food can still be snatched up within five seconds and still be good to eat.

The New York Times has this column on the 5-second rule.

An excerpt:

I learned from the Clemson study that the true pioneer of five-second research was Jillian Clarke, a high-school intern at the University of Illinois in 2003. Ms. Clarke conducted a survey and found that slightly more than half of the men and 70 percent of the women knew of the five-second rule, and many said they followed it.
She did an experiment by contaminating ceramic tiles with E. coli, placing gummy bears and cookies on the tiles for the statutory five seconds, and then analyzing the foods. They had become contaminated with bacteria.


Later...

On surfaces that had been contaminated eight hours earlier, slices of bologna and bread left for five seconds took up from 150 to 8,000 bacteria. Left for a full minute, slices collected about 10 times more than that from the tile and carpet, though a lower number from the wood.


TK: I doubt if the 5-second rule makes it into GHPs for bagged salad facilities, but I have to admit I'm an occasional devotee of this contemporary folk wisdom.



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Orbis Container Services Partners with America's Second Harvest

Today, ORBIS Container Services announced the launch of a new program in partnership with America’s Second Harvest—The Nation’s Food Bank Network, the country’s largest domestic hunger-relief organization.
The objective of the program is to bring the benefit of fresh produce donations to America’s Second Harvest’s nationwide network of more than 200 food banks that serve all 50 states, Washington DC and Puerto Rico. This network secures and distributes more than 2 billion pounds of donated food and grocery products annually. “This agreement will remove obstacles for shippers to donate to our network”, said Rick Bella, Director of Produce for America’s Second Harvest. “With the continued increased use of returnable shipping containers, this couldn’t have come at a more opportune time for us.”
From time to time, fresh produce is rejected at retailer distribution centers, after visual inspections deem the produce as not meeting the stringent standards set by the retailers. However, this fresh produce has significant value to America’s Second Harvest, which can quickly and efficiently distribute it to those in need, via its food bank network.

As an added benefit to encourage the donation of fresh produce, participating grower/shippers are eligible for tax incentives for the value of their donation. Fact sheets, with tax information, are available at http://www.secondharvest.org/ additionally, as part of this program, all ORBIS shipping containers with the donated produce will be recovered by ORBIS, reducing costly container loss. "Enrolling America's Second Harvest significantly strengthens the network of sites that can handle rejections of produce in RPC’s for our customers. At the same time, we are contributing with our grower/shipper customers to a leading network of food banks that benefits a wide range of our country's population," stated Michelle Ziegler, Director of Sales for ORBIS Container Services.

RB: This is exciting news for our organization and offers another step in our desire to just "fit in" with the produce industry. Removing obstacles that stand in the way of food donations to help our nation's hungry only makes sense. We also have an agreement with CHEP allowing our members to serve as depots when food donations are being shipped on CHEP pallets. Many thanks to Orbis and Fraser McKenzie for making this a reality.

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Budget bummer

Agriculture Secretary Mike Johanns pointed out in his visit with United members at Chicago that Congress will not have a lot of budget elbow room in the farm bill. He was lowering expectations for a reason.

Congressional Quarterly reported yesterday that House-Senate negotiations on the fiscal 2008 budget resolution should get underway today. CQ report Democrats want to wrap up work on the resolution by early next week. The resolution sets the total amount of discretionary spending the Appropriations committees will distribute among their 12 subcommittees, CQ notes.

Senate Concurrent Res. 21 spells out the discretionary budget for the USDA this way:

Agriculture
Fiscal year 2007:
(A) New budget authority, $26,207,000,000.
(B) Outlays, $22,580,000,000.
Fiscal year 2008:
(A) New budget authority, $20,481,000,000.
(B) Outlays, $21,497,000,000.
Fiscal year 2009:
(A) New budget authority, $20,984,000,000.
(B) Outlays, $20,108,000,000.
Fiscal year 2010:
(A) New budget authority, $21,137,000,000.
(B) Outlays, $20,118,000,000.
Fiscal year 2011:
(A) New budget authority, $21,099,000,000.
(B) Outlays, $20,390,000,000.
Fiscal year 2012:
(A) New budget authority, $21,288,000,000.
(B) Outlays, $20,763,000,000.


TK: Agriculture Secretary Mike Johanns said at Fresh Marketplace that the industry must continue to "tell its story" to Congress as work continues on the farm bill. Unfortunately, prying money from a USDA 2008 budget that has shrunk from 2007 and shows no signs of expanding after won't be easy, no matter how compelling the tale.

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True believers

Yeah, you are committed to fresh produce. But are you so committed to fresh produce to run 10 marathons in 10 days? I didn’t think so…. Me neither.
So I caught the tail end of an All Things Organic workshop where Steve Shriver, an organic marketer of Eco Lips lip balm (“The best lip balm for the world”- the product is made out of organic beeswax) described how he set out to run 10 marathons in 10 days across the state of Iowa over Earth Day week because, well, … here is how he put it in his company’s Web site (www.ecolips.com) on Jan. 26:

It's not a typo. I'm going to attempt to run 10 Marathons in 10 days over Earth Day week to promote organics! The idea came about last year as I transitioned to a mostly organic diet. The following things occurred: I had more energy, I wasn’t catching as many colds. My after workout muscle soreness decreased. My joints felt better after long runs. I could keep going, but I think you get the point. I believe that a run of this magnitude would not be possible (or would be a lot harder) without an organic diet. Organic food has changed my life for the better, and my hope is to prove just how much better an organic diet is for you, and for the earth.

Leaving on his quest April 10, he was able to get five marathons in five days before his Achilles swelled and sidelined him. He did manage to squeeze marathon number 6 on Day 10, he told the workshop audience.
Another panelist at the organic seminar was Seth Goldman, president of Honest T (an organic tea company). Goldman has been nominated for the 2007 Ernst & Young Entrepreneur of the Year. During the workshop, Goldman shuddered at the recollection that his son and others on a youth soccer team were drinking Capri Sun drinks after a game. So motivated to change this sad reality, Goldman created a new line of organic drinks for kids, Honest Kids drink pouches.
His reaction reminds me of an exchange I had with Lance Jungmeyer about Sunny D in the United exhibitor lounge. We were practically high-fiving each other that Sunny D was available, and not so much concerned about the juice content, much less the organic status of the beverage.
Listening to Shriver and Goldman of Honest T (organic tea) at the All Things Organic seminar, I was struck with the thought that the organics industry would lose its essential swagger without true believers like those two.
The moderator of the session put it this way:
“That passion to effect change, to heal people, is more important to most of you over making a dollar,” she said to the general audience.


At one point, Shriver lamented that the company of an independent drink brand was bought by Coke for $250 million. The guy that created that drink line, Shriver noted, has given up control of his vision. He will miss out on the process of delivering on the mission.
I'm thinking maybe $250 million helps ease the pain.

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