November 2021 picked up the place October left off: grocery buying and meals consumption patterns remained in flux, particularly as vacation purchases began a lot earlier.
Mixed with record-setting inflation and substantial provide chain constraints, the market has but to discover a new and constant degree of steadiness.
IRI, 210 Analytics and the Produce Advertising and marketing Affiliation (PMA) have teamed up since March 2020 to doc the ever-changing market and its impression on contemporary produce gross sales.
Meals continued to be home-centric in November. Jonna Parker shared some insights from the November IRI main shopper survey. “The share of meals ready at house stays round 80% regardless of extra folks working away from house and many of the nation’s faculty youngsters being again to in-person schooling.”
Whereas retail costs for many classes rose to their highest level in lots of a long time, the associated fee for consuming out rose even quicker. Restaurant inflation sometimes ends in extra at-home meal preparation however these ranges have already been elevated because the onset of the pandemic.
Parker famous that consumers are very conscious of the widespread inflation: 90% of main consumers reported grocery merchandise costs being a little bit (42%) or a lot (48%) increased. Amongst customers who famous increased costs, 92% are extraordinarily (41%) or considerably involved (51%).
“This interprets into 83% of main consumers being conscious and anxious of the inflationary situations,” mentioned Parker.
Shoppers chosen classes throughout the shop as areas the place they’ve famous increased costs, led by the meat, produce and dairy classes. In response, 61% of customers have made adjustments to their grocery choice. Searching for money-saving measures, together with stocking up, is the most typical response, adopted by chopping again on non-essentials and switching to retailer model options.
Past inflation, COVID-19 continues its grip on buying patterns. In the course of the early months of the pandemic, as many as 20% of journeys had been on-line, based on the IRI survey tracker. This dropped to a low of 11% in July of 2021 and the share has ticked again up each month since. In November, the net share of journeys elevated to 17%.
But on-line buying stays a complementary journey for many customers. Solely 4% of survey respondents consider they may purchase all their groceries on-line within the subsequent month. This compares to 19% who will solely purchase some or a little bit on-line. Whereas buying in particular person, fewer folks browsed for brand spanking new gadgets or concepts and 17% spent much less time within the retailer than pre-pandemic.
“This underscores the significance of cross-merchandising, eye-catching shows, suggestive promoting and extra to verify contemporary produce stays on the patron radar,” added Parker.
November gross sales are sometimes dominated by the Thanksgiving vacation, which tends to push an above-average share of {dollars} to the contemporary departments. In 2020, Thanksgiving was very home-centric. Many fewer folks traveled, events had been smaller and Thanksgiving gross sales patterns had been vasty totally different.
Within the October 2021 IRI survey amongst main grocery consumers, extra folks deliberate to rejoice Thanksgiving this 12 months and occasion sizes had been anticipated to be larger. On the similar time, celebrations remained largely home-centric although many eating places and grocery deli’s provided turnkey vacation meal options and consumers deliberate to buy earlier. The Transportation Safety Administration (TSA) reported its highest passenger quantity because the onset of the pandemic, at about 88% of the pre-pandemic quantity.
12 months-to-Date Gross sales
The primary 11 months of the 12 months introduced $633 billion in meals and beverage gross sales —up 1.3% over 2020 and 15.6% over the 2019 pre-pandemic regular. Nonetheless, inflation performed a major function with year-on-year unit gross sales nonetheless down 3.5%. Perishables, together with produce, seafood, meat, bakery and deli, had the best year-over-year progress throughout the first 10 months of 2021, at +1.8%. Frozen meals had the best improve versus the pre-pandemic regular of 2019, at +22.8%.
Inflation
The buyer value index elevated 6.8% in November 2021, the biggest year-over-year improve in 39 years, based on the Labor Division. IRI-measured value per quantity additionally reveals that costs continued to rise over and above their elevated 2020 ranges for meals and drinks, indexing at 107 for every of the November weeks.
Recent produce costs are additionally increased than final 12 months. 12 months-to-date, costs for complete contemporary produce are about 6% increased than they had been final 12 months. Inflation for fruit is above common, at +8.2% year-to-date via November 28. Fruit costs throughout November 2021 had been 11.9% increased than in November 2020.
“Provide chain challenges proceed to have an effect on contemporary produce pricing and availability,” mentioned Joe Watson, VP of Membership and Engagement for PMA. “Recent produce actually just isn’t alone on this however consumers are additionally extra fluid than I’ve ever seen earlier than in switching between contemporary, frozen and shelf-stable, which suggests inflation and promotional ranges in these different areas can have an effect on the contemporary buy greater than ever.”
Inflation for frozen fruit and greens was decrease in November 2021, at +4.9% versus 12 months and shelf-stable fruit and greens noticed value will increase of 5.6%.
Week-by-Week Gross sales Recent Produce
Recent produce gross sales had been very in line with November ranges between $1.2 and $1.4 billion every week. Regardless of the excessive client demand in 2020, gross sales exceeded final 12 months’s ranges by 4.0% and remained about 16% forward of the 2019 pre-pandemic regular.
“Each the week earlier than the vacation and Thanksgiving week itself had been massive for contemporary produce,” mentioned Watson. “As we have now been seeing because the begin of the pandemic, customers began vacation purchases earlier — making the week previous to the vacation the larger of the 2. I observed a whole lot of client media protection about potential shortages, leading to some customers being shocked to seek out sure gadgets in inventory. We’ve got a possibility to obviously talk about provide chain availability and supply substitution options, the place wanted.”
November was the primary time since March that vegetable gross sales tracked forward when in comparison with 2020. Fruit gross sales progress slowed a little bit to +8.5% versus November 2020, however good points remained greater than 18% forward of the pre-pandemic 2019 ranges. Vegetable gross sales had been 14.1% forward of 2019 — for a complete division achieve of 16.0%.
Recent Share
Recent produce gross sales had been sturdy in November and its share of {dollars} rebounded from the October 2021 low level of 79.5% to 80.8%. As such, it did stay beneath summer season ranges, regardless of having the best inflation of the three areas, which might artificially increase its share of {dollars}.
In frozen, fruit represented 18.6% of frozen fruit/vegetable gross sales and {dollars} had been flat year-on-year. Frozen greens declined 6.5%. In canned, fruit additionally outperformed greens. Fruit gross sales elevated 3.7% in November 2021 versus 12 months in the past in contrast with -2.0% for shelf-stable greens. All areas are nonetheless benefiting from strong demand versus the 2019 pre-pandemic regular.
Recent Produce {Dollars} versus Quantity
September was the excessive water mark for quantity gross sales when kilos got here inside 2.5 factors of final 12 months’s ranges. In November, quantity retreated additional, at -4.4% versus 12 months in the past ranges. Pound gross sales are nonetheless 4.4% forward of the pre-pandemic regular. That is down from a excessive of 9.6% in September.
Evaluating November fruit pound gross sales versus the pre-pandemic 2019 regular reveals that the trade continues to be transferring many extra kilos via the system. Free and away from the impact of inflation, it reveals that U.S. retailers bought 5.9% extra kilos of fruit versus 3.3% extra kilos of greens in November 2021 than the identical month in 2019. Whereas quantity is down year-over-year, it reveals that the home-centric meal consumption continues to be driving strong demand for produce at retail.
Recent Fruit Gross sales in November
“On the fruit aspect, all high 10 gadgets gained versus 12 months in the past,” mentioned Parker. “Berries are by far the largest fruit, but nonetheless rising practically 9% year-on-year. Three gadgets reached double-digit good points: grapes, melons and blended fruit. Grapes had largely a flat 12 months in 2020 however gross sales have been accelerating because the third quarter of 2021.”
Citrus fruits have an enormous illustration between mandarins and oranges. Lemons fell simply outdoors of the highest 10 with $62 million and a achieve of three.3% versus 2020.
Recent Greens Gross sales in November
“Wanting on the high 10 in vegetable greenback gross sales simply conjures up Thanksgiving dinner,” mentioned Watson. “Between potatoes transferring in first place, onions and carrots having an enormous month and celery transferring into the highest 10, it’s clear that the vacation had a huge impact on contemporary vegetable gross sales this November. By and huge, gross sales elevated versus 12 months in the past, with the exceptions of tomatoes, peppers and mushrooms, which every had a robust 2020.”
Absolute Greenback Features
“The highest 10 in absolute greenback good points confirmed each small and huge classes are necessary for division progress,” mentioned Parker. “It’s at all times fascinating to keep watch over among the smaller sellers that handle to achieve in an enormous means. This month, that included blended fruit and occasion trays — a transparent signal that individuals had been entertaining this month.”
Perishables Efficiency
A glance throughout contemporary meals departments for the 4 November weeks reveals perimeter energy. All departments, excluding seafood, gained year-over-year, with the best will increase going to deli. Seafood is considerably smaller than the opposite contemporary departments and deli gross sales overtook bakery gross sales this month, with November gross sales of $3.3 billion.
Floral
Floral greenback gross sales grew by 24.5% over the primary 11 months of 2021 in contrast with the identical interval in 2020, reaching practically $6.7 billion for the 12 months. In November, gross sales exceeded $417 million, which was an enchancment of 15.9% versus 12 months in the past. It was indoor floral producing the majority of gross sales, at $388 million, which was up 17.3% versus 12 months in the past. Outside floral was down about 1% on gross sales of $28 million. The highest three largest sellers this month had been potted vegetation, bouquets and roses. Development for roses continues to be upwards of 24% versus 12 months in the past and gross sales are up an astounding 57% versus 2019. Unit gross sales for roses, then again, are up 11.7%.
What’s Subsequent?
The IRI main shopper survey discovered many examples of customers encountering inflation and out-of-stocks.
• 37% encountered points with availability on their listing journey. Highest out-of-stocks had been reported for bathroom paper, canned items, carbonated gentle drinks, paper towels and milk.
• In response to not with the ability to purchase what they got here for, 39% of consumers spent their cash elsewhere and 29% ended up not buying the deliberate merchandise in any respect — underscoring the numerous impression of out-of-stocks on gross sales.
– 29% went to a unique retailer and one other 10% went on-line and acquired it from one other retailer
– 29% forewent the acquisition
– 28% purchased a unique model or selection
– 22% returned to the shop later
Whereas the upswing in new COVID-19 instances within the latter half of 2021 has reversed among the normalization seen within the first half of the 12 months, concern ranges should not fairly what they’ve been. This explains the small reversals in areas equivalent to on-line gross sales, shopping for brand spanking new gadgets and time spent in retailer, however not wherever close to the degrees seen on the onset of the pandemic.
• 33% is extraordinarily involved — a ratio that was double as excessive throughout the early months.
• Regardless of the arrival of the Omicron variant, 78% should not any kind of fearful; 12% are extra fearful and 10% are much less fearful
• 50% anticipate to start out Christmas grocery buying a bit sooner than ordinary. Celebrations are prone to be very home-centric but once more, with solely 3% anticipating to exit to a restaurant.
Shopper mobility stays excessive, particularly within the space of digital versus in-person schooling:
• 81% of the nation’s youngsters attend faculty in particular person full time, one other 4% are in a hybrid system.
• 15% of fogeys now pack meals to carry to highschool extra usually that they did pre-pandemic. In distinction, 19% now do faculty lunch extra usually. 62% go about faculty lunch the identical means they did pre-pandemic.
• 9% of fogeys pack extra drinks to carry to highschool as water fountains stay off limits in some faculties.
Restaurant engagement, at 82%, remained excessive in November, pushed by takeout and supply:
• 58% of main consumers have gotten takeout, just a few factors increased than in the summertime, and 22% have ordered house supply.
• 50% have dined inside at a restaurant and 15% have eaten open air at a restaurant.
The subsequent report, overlaying December, can be launched in mid-January. We encourage you to contact Joe Watson, PMA’s Vice President of Membership and Engagement, at jwatson@pma.com with any questions or considerations. Please acknowledge the continued dedication of your entire grocery and produce provide chains, from farm to retailer. #produce #joyoffresh #SupermarketSuperHeroes.
Date ranges:
2019: 52 weeks ending 12/28/2019
Q1 2020: 13 weeks ending 3/29/2020
Q2 2020: 13 weeks ending 6/28/2020
Q3 2020: 13 weeks ending 9/27/2020
This autumn 2020: 13 weeks ending 12/27/2020
Q1 2021: 13 weeks ending 3/28/2021
Q2 2021: 13 weeks ending 6/27/2021
Q3 2021: 13 weeks ending 9/26/2021
November 2021: 4 weeks ending 11/28/2021
