Produce Sales Mushrooming : Supermarkets Strike Gold With the Green in Fresh Food Sections

Green and white signs are sprouting among the mounds of fresh fruits and vegetables that are the signature of Irvine Ranch Farmers Markets. The new signs, reporting “actual test results” from an outside laboratory, tout the nutritional value of the upscale supermarket’s produce.

One sign at the Beverly Center store called shoppers’ attention to large nectarines that contain “29% more Vitamin A than the government reported average.” Another featured green bell pepper offering a “super Vitamin C value.”

What Irvine Ranch is doing is more than old-fashioned salesmanship; its new signs reflect the rising superstar status of produce departments in the nation’s supermarkets as they vie for the $300 billion that U.S. consumers spend annually on groceries. “In a competitive market, the retailers are seeking ways to differentiate their products,” said Pamela Jones, executive director of the Alliance for Food and Fiber, a lobbying organization for farmers. “They want a marketing advantage.”

The importance that shoppers attach to fresh produce was demonstrated last January, when 98% of the consumers surveyed by the Food Marketing Institute rated the quality of a store’s produce as “very or somewhat important.” That edged out breadth of selection and meat quality (both 96%), and even low prices (93%), among top consumer concerns.

Supermarkets have responded by increasing the size of their produce departments, which have doubled in size during the past decade and now have an average of more than 150 feet of display racks. They also have nearly tripled the number of fresh items that they routinely carry to more than 200. These include such exotics as fuyu persimmons and such former rarities as the kiwi fruit and seedless watermelons. At the same time, more traditional items are being displayed in a variety of ways--carrots, for example, are offered sliced or whole and sold by the pound with or without their green stalks.

Farmers Markets Expanding

Increasing demand for fresh fruits and vegetables--and more varieties of them--also is fostering the rapid growth of farmers markets, where growers sell directly to the public. In California alone, the approximately 100 farmers markets had an estimated $50 million in sales last year, up more than 20% from 1985. The state’s farmers, who grow more than half the nation’s fresh vegetables and fruits, also have diversified their crops to keep up with consumer tastes.

Restaurateurs, too, are rushing to tap into the freshness trend by using and displaying more fruits and vegetables in innovative ways.

Sizzler’s, for example, recast its “steak-house” image by installing lavish salad bars, which now account for 60% of sales at some outlets. Doubletree Hotels offers a “high-fiber sampler” consisting of freshly squeezed orange juice, strawberries, banana, apple, dried apricots, prunes, walnuts and a prune bran muffin. It already accounts for 10% of breakfast sales. Carillo’s restaurants in Los Angeles offer a “make your own tostada” salad bar that uses fresh fruits and vegetables to counter the calorie-laden image of Mexican food.

Even cocktail lounges are capitalizing on the freshness craze, replacing salted snacks with more elaborate “grazers’ bars.” These offer appetizer portions of prepared foods as well as fresh fruits and vegetables for customers who feel like “grazing” rather than eating a traditional meal. No longer new on the East or West coasts, the phenomenon has spread to restaurants across the country, said Bill Slone, publisher of Beverage Media in New York.

Moreover, the demand for fresh fruits and vegetables is expected to continue rising faster than for other foods, according to Elmer Learn, an agricultural economist at the University of California at Davis.

The rising demand dates to the mid-1970s, according to U.S. Department of Agriculture statistics. Consumption of fresh broccoli has more than tripled, from 0.8 pounds per person in 1974 to 2.9 pounds in 1985 (the latest year for which the statistics are available); cauliflower consumption climbed from 0.8 pounds to 2.2 pounds, and tomatoes went from 11.8 pounds to 15.8 pounds.

In all, consumption of fresh vegetables rose from 75.7 pounds per person in 1974 to 91.1 pounds in 1985, a 20% increase, and consumption of fresh fruit went from 186.1 pounds to 210.5 pounds, up 13%.

To be sure, consumption of so-called junk food is also on the rise--and often among the same people who are buying more fresh produce. “We’re eating more healthfully, but when we want to treat ourselves and splurge, it goes heavily into the Haagen-Dazs (ice cream),” suggested Nancy Tucker, a vice president of the Produce Marketing Assn. in Newark, Del.

In any case, grocers are competing intensely through their produce departments.

That’s particularly so in Southern California, which many experts consider to be the nation’s most hotly competitive retail food market. No single company commands even 20% of the market in Los Angeles and Orange counties. Ralphs last year led the field with an 18.8% share, followed closely by Vons at 17.6% and Lucky with 14.5%. (The other big chains and their shares include: Alpha Beta, 8.9%; Safeway, 6.9%; Hughes, 5.9%; Boys Markets, 4.5%, and Albertson’s, 3.6%.)

Irvine Ranch Growing

Competition notwithstanding, Irvine Ranch has managed to find room to grow from a single roadside produce stand in Orange County to a dozen supermarkets today by emphasizing the freshness, flavor and variety of its produce. It also offers some unconventional consumer services such as “Farmer Fred” Goldman who, clad in overalls, circulates among the customers at the Beverly Center store, answering questions and offering tastes of some of the exotic produce. Cutting into a small green fruit the size of a tiny cucumber one day recently, Goldman displayed a seedless avocado. “This is a miracle of nature,” he proclaimed, “an immaculate conception!”

In a further effort to maintain its niche, the company recently began exploiting one of the newest tactics in the produce-marketing war: the use of independent testing to monitor the quality of fruits and vegetables. Irvine Ranch has signed on with NutriClean, a 3-year-old Oakland company that claims to be the nation’s first independent produce-testing laboratory.

“We were looking for a way to quantify our claim that we sell only the best,” said Deralee Scanlon, a nutrition consultant to Irvine Ranch. “We know our fruits and vegetables look good and taste good, and we want our customers to know they contain all the nutrients they’re supposed to contain.”

Stan Rhodes, NutriClean’s president, added: “We all know about the tasteless tomato--nothing much there but water. But you can grow plants that are nutrition-dense if you want to, and we help Irvine Ranch locate them.”

While Irvine Ranch emphasizes the nutritional information that NutriClean develops in field tests with growers, a larger NutriClean client in Northern California, Raley’s, is exploiting another, more touchy, theme: the safety of its produce.

Raley’s, which operates 50 supermarkets in Northern California and western Nevada, began “getting our feet wet on the pesticide issue” with NutriClean about 10 months ago, said Frank McMinn, vice president for merchandising, marketing and sales promotion.

Raley’s began its marketing campaign Jan. 11 with a full-page color ad in the Sacramento Bee promoting oranges from Wrigley Orchards near Ojai as “extra-rich in Vitamin C and grown without the use of pesticides.” The company hit the pesticide issue head-on in a May 24 ad detailing “what Raley’s is doing to help protect your family from pesticide residues in fresh produce.”

While grocers watch Raley’s pesticide promotion warily, there is little doubt that it strikes a responsive chord with many consumers, warranted or not. The Food Marketing Institute found that 76% of the 1,007 supermarket shoppers it surveyed last January consider pesticide residues to be a serious health hazard.

But some growers fear that such marketing tactics could ultimately backfire and turn shoppers away from fresh produce.

“We assume the public is not going to stop eating,” said Ted Batkin, manager of the Fresh Market Tomato Advisory Board. “But it doesn’t take a massive drop in consumption to dramatically affect the economics of the fresh (produce) market.”