In an age when consumers are increasingly shifting toward fresh, “no bad stuff” foods, it is more important than ever that retailers and manufacturers are transparent in their process and ingredients while also practicing social responsibility. In 2017, fresh foods including meat, produce, deli, bakery and seafood accounted for $140 billion in sales, up 1.5% since 2013. The opportunities within the fresh category are greater than they have ever been, and if a retailer or manufacturer can become a trusted resource for consumers by providing clear, multifaceted communication strategies across fresh departments, the opportunities to win are ripe.
Since 2015, IRI has looked across market performance sales and consumer behavior data to identify the most powerful trends affecting fresh foods today. Essential to these results has been the integration of both fixed and random-weight items across data sets and also combining that data with consumers’ responses from surveys and online videos. The result: IRI’s Top Trends in Fresh series, which identifies and validates the critical factors driving fresh and affecting the total store.
The Importance of Food Transparency and Cultural Alignment
Most recently, we looked at the critical importance of food transparency and cultural alignment within fresh foods, including consumers’ desire to know how and where food was grown or made. In our most recent survey, one in three consumers mentioned “the absence of the bad stuff” being much more important now than a few years ago.
We see it in our national sales data as well. Since 2015, primary claims in meat and produce strengthen sales. For example, antibiotic-free chicken has more than doubled in sales over the past few years, with 28% of total market sales driven by major commitments from leading suppliers. Additionally, social listening data showed that suppliers that adopted antibiotic-free chicken claims also saw increases in positive social media sentiment, which correlated with sales growth across their brand. Retailers won as well, with the average basket size, including antibiotic-free meat, topping out at $105 per trip—double the store average.
Overall, our social listening data saw an uptick in consumer online conversations discussing food production with animal welfare, GMO, fair trade and food waste, with marked increases in the past 18 to 24 months. GMO, in particular, is top of mind with younger consumers, with 54% of the 5.9 million GMO social media mentions in 2017 posted by people ages 25 to 44.
Organic remains an in-demand claim in the produce department, even as organic choices are popping up across the store. In 2017, more than 17 fresh produce categories had organic sales share greater than 10%—double the number just two years ago.
Food Transparency’s Halo Effect
Food transparency can also drive department growth for retailers, a halo effect in performance overall. The top 25% of retailers for organic produce grew their total produce department sales 22% faster than the national average. Similarly, retailers who are leading in antibiotic-free meat grew their total meat department 166% faster and generated a full percentage point more of total store sales. Our study also found strength in sustainable seafood programs: Retailers who have invested in sustainability programs are outpacing those who do not.
While our study found consumers across the age and income spectrum engaged in food transparency and social responsibility, a greater concentration comes from millennials. In our 2017 Fresh Foods Shopping Survey, 68% of millennials were more likely to care about the social and cultural aspects of their fresh foods, with 67% actively seeking out locally sourced products. This has evolved to be much more than organic; only 33% said they are more likely to opt for that now mainstay option.
Overall, local availability was one of the highest motivators in determining where to shop, with 30% of consumers looking for locally sourced fruits and vegetables, and 21% seeking locally farmed meats and poultry. Beyond finding selection, consumers reported availability of locally sourced meat and produce makes them feel the store cares about the overall welfare of others and the local community. There is great opportunity for retailers and growers to partner in order to win more consumers both in the store, online and in the media.
Value for Manufacturers
For manufacturers, there is value in being a first mover vs. a fast follower within transparency and social responsibility claims. The shift toward transparency and social responsibility will only accelerate, with our study showing marked increases in just two years. Consumer focus is amplifying quickly; it is critical to evaluate your variety and assortment to see where the rapidly expanding, wide spectrum of key claims and benefits fit in your portfolio and company strategy.
Jonna Parker has been a fresh-foods innovator for nearly two decades, driving the evolution of consumer-centric decision-making and big data analytics throughout the perimeter. She leads IRI’s Fresh Center of Excellence, leveraging deep fresh expertise with IRI’s fully integrated fresh and center-store data. For more information, visit iriworldwide.com/insights, or email email@example.com.