“Early on in the pandemic, we saw shoppers indulging in more comfort foods,” said Jonna Parker, Team Lead Fresh for IRI. “But 64% of shoppers started 2021 with New Year’s resolutions, according to the IRI Consumer Network survey conducted in January 2021. More than one third, 35%, aim to eat healthier, in general; 35% want to get more exercise; and 29% plan to save more money.” This is good news for the produce department, with its strong health halo and favorable pricing.
The first four weeks of January saw a recovery of trips to slightly above the levels of a year ago while the basket size remained highly elevated. This resulted in high gains over January 2020 levels for total edibles, which is all food and beverage related items including fresh foods, at +12.7%. This is up significantly from a subdued December retail growth (+8.1%).
January produce department sales for the five weeks ending 1/31/2021 increased +9.7%, excluding online-only and delivery e-commerce sales that would have been significantly higher than in 2020. IRI shopper research finds that 16% of shoppers are ordering their groceries online more, with 62% opting for click-and-collect fulfillment versus direct-to-home delivery or pure-play online with no physical store. At retail, produce added $576 million versus the comparable period in 2020 for the total fruits and vegetables across the store. As seen throughout the pandemic, frozen fruits and vegetables had the highest growth, but are also the smallest sales of the three temperature zones in retail.
Fresh produce generated $6.3 billion in sales during the January weeks. This reflects $198 million in additional fruit sales and $383 million in additional vegetable sales.
In 2019, fresh produce sales represented 80.8% of total fruits and vegetables sales across the store. That share fell as low as 76.9% during the first quarter of 2020, pulled down by the March panic buying weeks when many dollars were diverted to frozen and canned. The fresh share briefly recovered in the second and third quarters but as the number of new Covid-19 cases spiked once more in November and December, the fresh share once more dropped to 77.7%. January 2021 showed a slight recovery of the fresh dollar share to 78.1%.
Fresh produce dollars versus volume
Fresh produce dollars have been outpacing volume since the onset of the pandemic — pointing to inflation as well as premiumization of purchases. In January 2021, the gap between volume and dollar gains widened to 2.7 percentage points, up from 1.6 in the fourth quarter of 2020.
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