Cross-promoting center-store items with produce could boost sales, FMI study finds

By Elizabeth Crawford

- Last updated on GMT

Cross-promoting center-store items with produce could boost sales

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Manufacturers could boost the struggling sales of shelf-stable products sold in the center of the store by co-branding and merchandising them with related, high-velocity produce, sales of which are outpacing those of the total- and center-store, according to new research released June 9 from the Food Marketing Institute. 

FMI’s inaugural report, The Power of Produce 2015, found consumers bought 40.4 billion pounds of produce in 2014, representing a 0.6% increase in volume and a 4.2% increase in sales worth more than $60 billion compared to the previous year. The upwards trends should continue in 2015 with first-quarter sales already up 3.3% and volume up 0.8% compared to the same time last year, the report adds.

These increases are striking when compared to many other categories, most of which struggled to grow in today’s market, according to the report. It noted in 2014, total store units were off 0.1% compared to produce, which was up 0.6%. Likewise, sales of produce in 2014 added $2.4 billion in new dollar sales for the retail industry.

But these increases are not necessarily a threat to products sold in other categories. Rather, Nielsen Perishables Group suggests in the report that the strong performance of produce categories highlights new opportunities for growth.

CPG manufacturers and retailers could “parlay the success of the produce department to lift the stagnant sales of center store grocery categories by merchandizing and advertising items together,”​ the group said.

For example, Nielsen Perishables Group notes that produce staples like potatoes, onions and bananas are connected to more than half of total store sales for more than 10 departments and 120 categories.

More specifically, bananas are directly associated with cereal, and could easily tout on a sticker on the peal the nutritional benefits of adding the fruit to a co-branded RTE cereal. Bananas also are a good choice for co-branding because they often are the genesis for a quick trip to the store that turns into a stock-up visit, the report says, noting that Americans make 15.1 trips annually to buy bananas.

Increased consumer interest in less well-connected produce, such as a fast-growing cooking greens and avocados, also offer “tremendous opportunities to grow other items as the same time,”​ according to the report.

Cooking greens could be tied to pasta or dairy juices for easy meal solutions and smoothies, while avocados could drive snacking purchases if paired with deli dips and chips, the report suggested.

One way to make that connection for consumers is to print and stock in the produce section recipe cards featuring branded products from the center of the store to inspire shoppers and drive increased foot traffic, the report suggests.

According to the study, 41% of shoppers said they “absolutely”​ would be interested in suggestions for meals and 48% said “maybe”​ they’d be interested.

Shoppers most likely to respond positively to such a campaign would be young shoppers, those with children and those who work full time, the study notes.

It adds that because these consumers tend to be younger, they likely are less experienced cooks and would need more explanation and direction. Also, it notes they would be more interested in meals that are ethnic, take 20 minutes to prepare, use one dish or are value-stretching. 

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