Store Brands

FEB 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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www.storebrands.info / February 2017 / Store Brands 5 5 Category Intelligence: Frozen/Canned Fruits and Vegetables They have their place Canned and frozen fruit and vegetables face competition from their fresh counterparts, but retailers that deliver on-trend private brands could increase sales By Kathie Canning espite their quest for health and wellness — and ever-increasing awareness of the critical role many fruit and vegetables play in attaining it — Americans aren't necessarily packing their plates with extra strawberries and spinach. According to an October 2016 report from USDA's Economic Research Service, per-capita consumption of fruit fell from a high of 132.1 pounds in 1999 to 119.9 pounds in 2014. And per-capita consumption of vegetables fell 7 percent during the same timeframe, notes "State of the Plate," a 2015 report from the Hockessin, Del.-based Produce for Better Health Foundation. However, three longtime fruit and vegetable staples that have fallen out of favor with some health-conscious consumers — orange juice, potatoes and head lettuce — account for much of the decline, USDA reports. Canned and frozen fruit and vegetables, meanwhile, continue to face stiff competition from their fresh produce cousins, which many consumers believe to be more healthful. Recent shifts in consumer preferences adversely impacted growth within the canned produce segment, in particular, between 2011 and 2016, reports IBISWorld. "However, rising fruit and vegetable prices have convinced more cost-conscious consumers to pursue lower-cost canned produce," IBISWorld states in its May 2016 "Canned Fruit & Vegetable Processing in the US" report. And frozen fruit remains a bright spot. "Frozen fruit has benefitted strongly from assuring consumers that the freezing process preserves fruit's taste, texture and nutrients," states William Roberts Jr., senior food and drink analyst for global market research firm Mintel, in the company's July 2016 "Fruit — US" report. Add protein; go organic To grow private brand sales within the canned and frozen fruit and vegetable segment, retailers will need to focus new product development on new and emerging consumer-centric trends. One such trend worth pursuing on the frozen vegetable side is that toward protein, notes Jay Caton, director of sales and marketing for Hanover, Pa.-based Hanover Foods Corp. "Plant protein blends that include protein-rich ingredients are on-trend," he says. "Plant proteins like beans not only fulfill nutritional expectations, but leave consumers feeling full." Such blends also recognize the fact that many U.S. consumers, particularly millennials, aren't eating the traditional three square meals a day. Instead, they are eating four to six smaller meals, Caton notes, and are looking for options that not only are nutritious and taste great, but also can be prepared quickly. Retailers will want to consider adding organic prepared fruit and vegetable items, too. Organic products will continue to see double-digit growth annually over the next five years, maintains Andy Russick, vice president of sales and marketing for Pacific Coast Producers in Lodi, Calif. Caton adds that organic options are of high interest to millennials. "Cost-conscious millennials are still willing to spend more on foods that are considered a healthier alternative such as organic frozen vegetables," he says. "Frozen vegetable organic sales continue to outpace category growth." There is also the trend toward no artificial ingredi- ents and simple ingredient statements. Russick points to high consumer interest in ingredient statements Do consider millennials' need for nutritious, portable mini meals. Don't forget to call out benefits such as "low sodium" and "GMO-free" on packaging.

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