Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Monday, April 7, 2008

One take on the take-out craze


One good idea someone brought up during the first Insight Forum session at the April 3-5 Produce Marketing Association’s Consumer Trends ’08: A Produce Solutions Conference in Newport Beach, Calif., came in response to Harry Balzer’s assertion that packaged take-out meals look to be the blockbuster eating trend for the 21st century. The idea centered on the creation of a special parking area for supermarket customers who want to pick up meals to go from stores’ delis, salad bars and other foodservice-oriented stations.
That’s what restaurants like Chili’s and Applebee’s are already doing, and probably part of the reason restaurant take-out sales have skyrocketed. In fact, Balzer, vice president of the NPD Group, who spoke on “Eating Patterns in America: The Scoop on Who’s Really Eating What — Regardless of What They Say,” explained that from 1984 to 2007, the average number of household take-out visits bounced from 72 to 127 visits annually. By the way, 1989 was the first year take-out visits surpassed on-premise restaurant visits. …
Something I wondered while processing all this information about Americans crawling into their holes to eat: How much of the change is out of convenience, and how much has to do with 9/11? I think some of the trends are driven by fear and anxiety felt by Americans since 9/11. By doing take-out, people can minimize interaction with strangers. The trend toward Internet shopping and online dating services would also appear to support this notion.
Dan Galbraith is sections editor for The Packer and a guest contributor to the Fresh Talk blog.

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Connecting retailers with grower-shippers


Paul Stuart, of Wegmans Food & Pharmacy Inc., Rochester, N.Y., visits with Jennifer Fancher, of Driscoll’s, Broomfield, Colo., on April 5 in Newport Beach, Calif., between sessions at the Produce Marketing Association’s Consumer Trends ’08: A Produce Solutions Conference. For in-depth coverage, check http://www.thepacker.com/ this week as well as the April 14 print edition of The Packer. Photo by Dan Galbraith.

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Seeking solutions at PMA event


Paula Fouchek (from left), of the Edinburg Citrus Association, Ben English, of Yotta Mark, and Luis Garcia, of FreshPoint, have fun while discussing ideas and networking at the Produce Marketing Association’s Consumer Trends ’08: A Produce Solutions Conference, on April 5 in Newport Beach, Calif. Photo by Dan Galbraith.

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Scenic view from PMA Solutions conference


Scenic view from the Newport Beach Marriott hotel, site of the April 3-5 Produce Marketing Association's Consumer Trends '08. In the distance is a golf course and, further out, the Pacific Ocean. Photo by Dan Galbraith.

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National Retail Report - April 4

The decline of fruit promotions and the rise of vegetable ads is reflected in retail promotions this week, the USDA report. Here is the link to the April 4 USDA's Fruit and Vegetable Retail Report. From the report:

Ads Celebrate Spring
The onset of Spring was the theme of many retail ads this week with specials throughout the store. Meat sales were common and a few retailers in warmer parts of the country were even promoting items for outdoor grilling. “Buy-one-getone-free” and “10 for $10” specials were also quite prevalent.Fresh produce ad activity was about the same compared to last week. However, fruits were featured nearly 18 percent less often with the majority of fruit items showing a decline in activity. Conversely, vegetables were featured about 19 percent more often than last week. The most notable increases were seen on asparagus, corn, and tomatoes (combined tomato items). Despite the decline of fruit ads and increase in vegetables, though, the most widely featured individual items were mostly fruits. The top 5 items this week were: grapes, asparagus, strawberries, mangoes, and sweet onions. Many retailers seem to be featuring organic items more prominently in ads recently. This week, there were a variety of ads for organic items. In addition to those in this report, ads for organic avocados, broccoli, cauliflower, bell peppers, eggplant, potatoes, and zucchini were noted.


Fruits as Percentage of Total Fruit Ads April 04, 2008
Watermelon, seedless 2%
Watermelon, mini 4%
Strawberries, organic 2%
Strawberries 15%
Plums 3%
Pineapple 5%
Peaches 1%
Pears, bartlett 5%
Oranges, navel 3%
Nectarines, yellow flesh 1%
Mangoes 12%
Bananas 0%
Apples, red delicious 4%
Avocadoes, hass 8%
Blueberries 2%
Cantaloupe 9%
Clementines 0%
Grapes, green/red 16%
Limes 1%
Honeydew 2%
Lemons 1%
Grapefruit, red 4%


Vegetables as Percentage of Total Vegetable Ads April 04, 2008
Sweet Potatoes 1%
Tomatoes 3%
Tomatoes, organic 0%
Tomatoes on the vine 9%
Tomatoes, grape 5%
Tomatoes, grape organic 4%
Lettuce, iceberg 2%
Cucumbers 7%
Corn 6%
Celery 2%
Carrots, baby organic 1%
Carrots, baby 5%
Cabbage 2%
Broccoli, organic 1%
Beans, round green 3%
Broccoli 5%
Lettuce, romaine 1%
Squash, zucchini 3%
Peppers, bell red 5%
Potatoes, russet 4%
Peppers, bell green 4%
Onions, sweet 7%
Onions, yellow 4%
Mushrooms, white 4%

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Chat - Andy Nelson

I had the opportunity to add another "chat" to the record books today. Andy Nelson, Markets Editor for The Packer and rabid Husker fan, agreed to be featured in the short Q and A format. Here is the link to the chat archive (the newest files are at the bottom). A little from Andy's bio:

Andy directs coverage for the weekly Crops & Markets newspaper in 2001 as a staff writer, and also has served as handling and distributing editor. A member of The Packer’s editorial board, he writes editorials and editorial columns for the paper’s Opinion page. Before coming to The Packer, he had worked as a staff writer for The Kansas City Star and as a reporter for The York News-Times, York, Neb.


11:05 AM Andy Nelson, Markets Editor for The Packer - thanks for taking part in the latest Fresh Talk chat
11:07 AM andynelsonthepacker: Glad to be here, Tom. Go easy on me.
me: Well, no problem. Tell us about your roots - where did you grow up and what was the most memorable thing you did before the age of 12?
11:12 AM andynelsonthepacker: I said go easy on me! Well, the first part's easy: I was born and raised in Lincoln, Nebraska, home of the greatest college football team of the past four decades. The most memorable thing before age 12...maybe getting yanked from a Little League game in the first inning. As I recall I walked three and gave up two hits. I may have gotten one out.
11:13 AM me: Little League - the source of many painful memories for all of us. I know from talking with you about your family that your dad is (was?) a lawyer. Did you think about that option before you jumped into journalism?
11:17 AM andynelsonthepacker: My dad was and my brother is a lawyer. I worked for a law firm after college and did not like it. Figuring out who to bill for every 15 minute increment of every day seemed tortuous to me.
11:19 AM me: That would be tough - where do you put all the time spent figuring out all that...And so you went into journalism - do you have a degree from UNL and a graduate degree as well?
11:21 AM andynelsonthepacker: I got my undergrad degree in liberal arts from St. John's College, Annapolis, Md. St. John's also as a campus in Santa Fe and I spent my sophomore year there. I have master's in English from Nebraska.
11:23 AM me: Impressive - I know you worked for the "consumer press" KC Star - before you came to The Packer - How do you compare those experiences?
11:27 AM andynelsonthepacker: I worked a general assignment beat at the Star, which meant I got to cover a variety of stories. That was nice. But learning a single industry while working at the Packer also has been cool. And the Star didn't fly me to Spain and Chile.
11:30 AM me: No planning committee meetings in Santiago the Star cares about? Yes that is a nice feature about The Packer. One more question and I'll let you go. Your market stories are always very well read in every readership study; how do you figure out what to write about each week? Secondly, what's on your agenda this week?
11:37 AM andynelsonthepacker: Crops tend to harvest around the same time every year. (Climate change may change that, if it hasn't already.) So the Crops & Markets schedule is much the same year after year. That said, it's an evolving industry and we evolve along with it, tweaking our schedule every year and responding to changes in supply and demand as they come. A check of the f.o.b.s on the USDA's AMS site, for example, can alter the schedule. As for this week...Southeast peaches and California tomatoes. Looks like Georgia and SC are expecting a nice crop. (Haven't started the tomato story yet.)
11:39 AM me: I'll let you get to it. Andy, thanks for taking time and we'll do it again - maybe after a freeze or flood so you can give us the latest.
11:41 AM andynelsonthepacker: Happy to do it, Tom. Please don't edit out that bit about theHuskers. Go Big Red!
me: Purple Power! Both schools have some work to do in football...

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United news: Wenzing on board


Here is fresh news that just slid across the inbox: Congratulations Claudia... reaction coming in Packer coverage.


United hires Industry Veteran Claudia Wenzing

Washington, D.C. - United Fresh Produce Association announced today that Claudia Wenzing, a member of the senior staff of Produce for Better Health Foundation (PBH) for the past 12 years, will join United Fresh April 28 as Vice President of Business Development.
“Claudia is known throughout the produce industry for her passion, motivation and commitment,” said United Fresh President Tom Stenzel. “We are thrilled that Claudia has chosen as her next career step to pursue a mutual vision to develop new programs, services and tools to help our member companies and the industry overall enhance their long-term sales and profitability,” Stenzel said.
“United Fresh has strongly supported PBH since its formation as an important avenue for our industry to encourage consumers to increase their consumption of fresh fruits and vegetables,” said United Fresh Chairman Emanuel Lazopoulos, Del Monte Fresh. “Our association is committed to continuing that support, and working with PBH to ensure a positive transition for both organizations. Our own company Del Monte is a long-time supporter of PBH, and we will miss Claudia’s great spirit at the Foundation. But, while I’m sad to see her leave the Foundation she has served so well all these years, I’m also pleased that she has chosen to launch the next stage in her career still in the fresh produce industry with United Fresh. Truly, we are all one team to grow produce consumption, and it’s great to have Claudia continue to provide leadership to this effort,” he said.
"I am very grateful for the experiences I was afforded through my affiliation with the Produce for Better Health Foundation,” Wenzing said. “I am extremely excited about this new career chapter and finding new avenues in which to give back to the produce industry."
Claudia served as PBH Development Director from 1996-2000, and since that time as Vice President of Development. She has been responsible for both annual and special campaign fundraising, planned giving, and working with industry members to support the Foundation through ongoing sponsorships of activities and programs. Previously, she worked in fundraising and development for Youth Services International, a residential academy serving at-risk youth, from 1993-1996. She earned her bachelors degree in psychology Magna Cum Laude from Towson State University in Maryland.
At United Fresh, Claudia will work with President Tom Stenzel in serving the needs of both the association and the United Fresh Research and Education Foundation. For United Fresh, Claudia will work to help member companies by developing programs and linkages that boost overall produce sales and profitability. For the United Fresh Foundation, she will work to continue strengthening the Foundation as a primary source of education and training, food safety programs, and leadership development to help the produce industry better serve the consuming public. Claudia, herself, is a graduate of Class 9 of the United Fresh Produce Industry Leadership Program.
With Claudia’s expertise and knowledge of our industry, she will hit the ground running at this year’s annual United Fresh 2008 convention in Las Vegas, May 4-7.
"I'm looking forward to seeing all my friends in the industry at the convention, and having this unique opportunity to help grow this great business,” she said.

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AMS Report Changes

Via the Red Book staff, here are some of the changes to the USDA AMS Web site over the weekend. I can't say if I like having to go through the portal for some of these reports - it adds a step without giving any more value to the reader. I'll try to get my links updated later today. By the way, here is the link to the Retail Report:

From the AMS Webmaster:

AMS News Releases http://www.ams.usda.gov/news/newsrel.htm
Will change to http://www.ams.usda.gov/News.

Fruit & Vegetable Truck Rate Report http://www.ams.usda.gov/fv/mncs/truck.pdf
As of Friday, April 4, 2008, this report will only be available through the Fruit and Vegetable Market News Portal, which can be found at http://marketnews.usda.gov/portal/fv. You’ll have to use the portal to find this report.

AMS National FOB review http://www.ams.usda.gov/fv/mncs/fob.pdf
As of Friday, April 4, 2008, this report will only be available through the Fruit and Vegetable Market News Portal, which can be found at http://marketnews.usda.gov/portal/fv. You’ll have to use the portal to find this report.

Fruit & Vegetable Inspection Offices http://www.ams.usda.gov/fv/fpbstates/map.htm
Will change to: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&navID=RequestanInspection/ContactanOffice&rightNav1=RequestanInspection/ContactanOffice&topNav=&leftNav=&page=Federal/StateGradingContacts&resultType=&acct=freshgrdcert

AMS portal http://marketnews.usda.gov/portal/fv
Will stay the same.

PACA office directory http://www.ams.usda.gov/fvpaca/office.htm
Will change to:
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&navID=PACAOfficeDirectory&rightNav1=PACAOfficeDirectory&topNav=&leftNav=CommodityAreas&page=PACAOfficeDirectory&resultType=&acct=paca


PACA license search http://www.ams.usda.gov/pacasearch/
Will change to:
http://apps.ams.usda.gov/pacasearch/


Weekly shipment reports by commodity http://www.ams.usda.gov/fv/mncs/weekship.htm
As of Friday, April 4, 2008, this report will only be available through the Fruit and Vegetable Market News Portal, which can be found at http://marketnews.usda.gov/portal/fv. You’ll have to use the portal to find this report.

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Meeting the farm bill deadline and other priorities

Here is a link to audio clips collected from Harkin and Chambliss by AgNet on the state of the farm bill talks.


Here is a good summary of this week's outlook on Capitol Hill from National Journal. Among the highlights:
* Continued work on negotiating the farm bill
* Iraq's top soldier and diplomat for U.S. to deliver progress report to Congress; Democrats want to know why oil from Iraq isn't being used for reconstruction efforts
* The Colombia Free Trade Agreement will be sent to Congress by President Bush, NJ's sources say. Bush wants the agreement part of his legacy but battle is expected, as Democrats want a beefier trade adjustment assistance package. Congress must act within 90 days once President Bush sends it to Congress.

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USA Today's take on Fresh & Easy

Here is a link to USA Today coverage of Fresh & Easy's American venture. The story comes off less gloom and doom than many we have seen, though the Pundit's "downbeat" assessment is noted. Look for this quote in the story from one of those "test consumers" Tesco closely studied before their launch. "We're arrogant enough to think we can set them straight." Right on.

From the story:


Backing Fresh & Easy is U.K.-based Tesco, the world's third-largest retailer. Tesco's audacious plan is to change the way Americans shop and, in the process, take on rivals from Whole Foods to Wal-Mart. Instead of megamarkets, it's opening small Fresh & Easy stores that offer quality food and low prices. They're about the size of a Trader Joe's with lots of Whole Foods-type natural foods and prices that can seem Costco-esque.

But the unfamiliar combination — and a rather sterile store décor — seem to have left American shoppers confused about just what the chain is. As a result, Tesco is finding it harder than expected to make its mark on the nation's $500 billion grocery business.

Fresh & Easy's early U.S. sales are below expectations so far, and Tesco has paused its once-rapid store expansion until July to regroup. In the past year, however, 59 Fresh & Easys have popped up in Southern California, Las Vegas and Phoenix. Plans for Northern California were revealed last month. And few doubt that Tesco's aim is to give rivals all the way up to Wal-Mart a run for the grocery dollar in a very un-Wal-Mart way.

The stores are simple, bland and tiny by supermarket standards at about 10,000 square feet. The Fresh & Easy name signals the two things it wants shoppers to think of it for: freshness and convenience. All fresh food is dated — even the produce. And the stores are easy to shop.

Perhaps more important, however: price. They're up to 30% cheaper than conventional market chains, reports TNS Retail Forward, a research firm.

Fresh & Easy store-brand goods account for about half the products on the shelves — and have been created to contain no artificial ingredients or preservatives. But the store also carries name brands from Coca-Cola to Kraft.

"We've created the 21st century market for the 21st century American," says Tim Mason, CEO of Fresh & Easy, who is overseeing the chain's U.S. expansion from offices in El Segundo, Calif.

Results lag behind projections

Sales to date have been a letdown. Tesco won't reveal results, but a report by Piper Jaffray analyst Mike Dennis estimates weekly sales per store have been $170,000 instead of the projected $200,000. Analyst Jim Prevor is more downbeat, saying in a report that his research indicates weekly sales may be averaging less than $60,000.

Prevor cites lack of cultural understanding as one major problem, and that must be enough to drive Tesco crazy. It has invested more time and money trying to understand Americans than just about any other outsider entering the market.

Mason says sales aren't what Tesco had hoped — particularly sales of major brands, he says. "There's been some surprise and some disappointment."

But analysts say Tesco is a company that fixes its mistakes and will only grow stronger.

"If it's not performing to expectations, it will make all the changes to assure that it does," says Jennifer Halterman senior consultant at TNS Retail Forward, which projects Fresh & Easy will have U.S. sales of $10 billion by 2015, putting it in the top 10 grocers.

While it may take U.S. shoppers awhile to embrace the Fresh & Easy model, by 2020 the company could have 5,000 U.S. stores with sales of $60 billion, projects Bryan Roberts, global research director at planetretail.net. That would be larger than Safeway.

Food retail guru Kevin Coupe, founder of MorningNewsBeat.com, minces no words: "There isn't a place in the world where Tesco has gone one-on-one with Wal-Mart and Tesco hasn't won."

While they may not yet be familiar, some of Fresh & Easy's distinguishing concepts are turning heads. Notably different — and cool: Shoppers are encouraged to taste before they buy. They may take almost any product to the "Kitchen Table" area of the store — be it chips, pizza or soup — and a staffer will open it or cook it and dole out samples.


Other Fresh & Easy features:

•Natural products. Fresh & Easy brand items have no added preservatives, artificial flavors, colors or trans fats. Eggs are from cage-free chickens; milk does not contain the growth hormone rbST.

•Low prices. An analysis by TNS Retail Forward found the total for a basket of eight Fresh & Easy products beat market chain Vons by 30%, Albertsons by 32% and Ralphs by 23%.

•Produce expiration dates. Fruits and veggies are mostly locally sourced — and come wrapped in plastic trays with expiration dates. The packaging, however, pleases some shoppers and seriously bugs others.

•Limited inventory. Fresh & Easy sells about 3,500 items vs. 60,000 at a typical supermarket.

•Low shelves. You can see from one end of the store to the other.

•No loyalty cards. No swiping cards for the price breaks.

•Wide aisles. Aisles are wide enough for three carts to pass.

•All self-checkout. To cut costs, there are no cashiers.

•Limited advertising. The chains buy no TV or newspaper ads. When it enters a market, it mails $5 coupons to area residents.

•Green design. Stores are designed to use 30% less energy than typical grocery stores its size, and recycling is a priority.

•Show the food. Most Fresh & Easy brand products are packaged so shoppers can see what's inside.

•Wine guru. The chain employs an accredited Master of Wine (one of 265 in the world).

For all of Fresh & Easy's planning, it's had some glitches in the early going, such as its distribution system failing to prevent some stocking shortages. The chain also has taken heat from Los Angeles activists, who say it has opened fewer urban stores than promised, and faced union anger over its non-union stance.

Studying how we live

While some problems are to be expected in such an ambitious rollout, some misjudgments about U.S. consumers are more surprising — given how much it studied them in their natural habitat.

Before the first U.S. store was built, Tesco hired a specialty research firm to help it peer into the lives of 60 American families in Southern California and Denver.

It spent hours in their homes. It took video of them cooking. It took video of them shopping in grocery stores. It even shot video inside their refrigerators and pantries.

Still the store design has confused some shoppers. "It's not as organized or as customer-oriented as I'd hoped," says Rick Sanchez, who was disappointed by what he saw at the Long Beach store's grand opening. When the first U.S. store opened, it didn't sell milk in gallons — something quickly corrected, says marketing chief Simon Uwins.

One of its most surprising issues so far — given its research — is that while it learned early on that natural foods are a major draw for U.S. shoppers, it underestimated how much Americans want their grub ready-to-go. Sales of prepared foods have been twice what it expected, Mason says.

That's one reason the company hired chef Michael Ainslie. He figures he's created 110 grab-n-go products over the past year, roughly one new product every three days. A point of pride: Mac 'n Cheese. "This was not easy to create with 100% natural ingredients," he says.

The families Tesco observed — who were paid about $300 each — were not initially told who was watching them.

"We didn't have a clue," says Sharon Catlett. The Burbank mother of twins and law firm administrator and her stay-at-home husband "thought it was a couples counseling service, because they kept talking to us separately." Catlett shops at whichever of six grocery stores has the best deals. The observers shopped with her, then went home with her and watched her cook dinner with what she'd bought.

She says she now has slight misgivings about giving too much information to the Brits. But she concedes, "We're arrogant enough to think we can set them straight."

Which is what Tesco — known for testing and retesting — wants her to do.

Touring the model store

Tesco also built a mock Fresh & Easy store in a warehouse in Hawthorne, Calif., long before the first real store. Focus groups were paraded in to help tweak everything from the logo to operation of the self-checkouts.

Some non-grocery products were tested — and died — there.

"People just didn't think Whiffle balls belonged in the store," says spokesman Roberto Munoz.

While a reporter was shown the mock store, access was denied to the super-secret, 820,000 square-foot distribution center in Riverside, east of Los Angeles, where Tesco creates and packs most Fresh & Easy brand foods.

Tesco brought key U.K suppliers to its Riverside fortress. A second such facility is planned in Northern California.

Competitors are eagle-eyed but closemouthed. Wal-Mart would not comment on Fresh & Easy, but it plans to test a similar store dubbed Marketside near Phoenix. Whole Foods had no comment. Ditto for Trader Joe's.

Safeway CEO Steven Burd has said, "We'll watch the entry of Tesco closely."

Opening day lessons

Fresh & Easy tries to make a grand entrance. At openings, top executives (in casual dress) show up to hand out free tote bags. They work the floor, as they did at the Long Beach opening last month when 250 shoppers rushed in when the doors parted.

One arrival, Jennie Kwan, a retired grandmother from Hong Kong, mistook Uwins for a local store staffer and asked the marketing chief where to find coconut extract. He couldn't find it — but found almond extract. It wasn't what Kwan had asked for, but she snatched it up anyway, saying, "That's a very good price."

Uwins smiled at a small victory. On his blog last week, however, Uwins said Fresh & Easy would take a break from opening stores for three months "to kick the tires, smooth out any wrinkles and make some improvements that customers have asked for."


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