Organic Trends. March 2 nd, 2017

Transcription

1 Organic Trends March 2 nd, 2017

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3 Largest Processor of Salads & Vegetables Largest private label value added produce processor in North America Largest land base in North America Dedicated resources for each specific segment Organic and Conventional Salads Organic and Conventional Salad Kits Organic and Conventional Bulk Salad Options Organic and Conventional Veg Party Trays Organic and Conventional Bagged Veg Commodity Produce (Item Specific) Organic and Conventional Clamshell Veg Cut Fruit

4 Product Offerings

5 FRESH GROWTH CONTINUES TO OUTPACE CENTER STORE FRESH DEPARTMENTS CENTER STORE FOOD DEPARTMENTS Total Fresh Produce Sales $46.9 BILLION 7% 5% 5% DOLLAR GROWTH VOLUME GROWTH 6% DOLLAR GROWTH VOLUME GROWTH 4% 4% 4% 3% 2% 2% 1% 1% 0% 1% 1% MEAT PRODUCE DELI BAKERY SEAFOOD FROZEN GROCERY DAIRY -2% Source: Nielsen Perishables Group FreshFacts 52 weeks ending 9/27/15

6 Vegetables are the future of American Cooking VEGETABLES ARE BECOMING CENTER OF PLATE; pushing animal protein to the side of the plate, or off of it entirely The American diet is evolving to include more vegetables Health concerns - heart health, weight loss, allergens Growth of farmers markets Semi-vegetarian, flexitarian diets 33% of consumers eating at least 1 meatless meal per week 33% of consumers are trying to eat a plant-based diet in general Technomic Reports; Baum & Whiteman 2016 Food Trend Report

7 THREE MACRO TRENDS IMPACTING PRODUCE 1. Healthy, Convenient Solutions - Continued focus on health and wellness, convenience & solutions 2. Transparency - Increased consumer engagement and demand for traceability 3. Organic Popularity - Continued growth in Organic Produce will outpace the total category

8 ORGANIC PRODUCT SALES - $43 BILLION Source: Nielsen Fresh and Organic Trade Association 2015

9 TOTAL U.S. ORGANIC SALES & GROWTH

10 THE ORGANIC MARKET LOOKS LIKE A HEALTHY PLATE FARM FRESH FOODS account for MORE THAN HALF of total organic food sales 13% of PRODUCE sold in the U.S. is ORGANIC ORGANIC DAIRY accounted for $6 Billion in sales Source: Nielsen Fresh and Organic Trade Association 2015

11 Organic Salad Segment Dollar Growth Total US Supermarkets Ttl US Organic supermarket Salad Volume Has Increased by 377% over 10 years Including club volume organic salad dollars equal $1,350,000,000/yr $726,801,000 $839,271,900 $944,625,600 $1,058,000,000 $602,793,300 $520,750,000 $440,277,000 $359,322,544 $329,991,000 $281,239,

12 TOTAL US - SALAD SEGMENT MOMENTUM Overall Salad Category Growth is Healthy Organics and Kits are driving category growth Organics and Kits are about 50% of total category sales Organic spinach and 50/50 represents ½ of total organic salads SEGMENT $-CURR 52wk $-CURR 24wk $-CURR 12wk $ Shr- CURR 52wk $ Shr- Curr 24wk $ Shr- CURR 12wk % Chg YAG- CURR 52wk % Chg YAG- CURR 24wk % Chg YAG- CURR 12wk SALAD KIT $1,363,857,509 $650,676,902 $325,693, % 26.6% 27.4% 21% 20% 19% ORGANIC SALAD $1,301,609,948 $571,004,020 $276,974, % 23.4% 23.3% 6% 1% 1% SALAD BLEND $1,066,270,612 $469,861,802 $226,242, % 19.2% 19.0% - 3% - 3% - 3% CLASSIC SALAD $551,491,060 $242,408,643 $116,714, % 9.9% 9.8% 1% - 1% - 2% SPINACH SALAD $531,199,468 $229,656,045 $113,083, % 9.4% 9.5% 0% - 1% - 1% PREMIUM CLASSIC $283,462,971 $123,809,996 $56,626, % 5.1% 4.8% - 15% - 14% - 18% GREENS $185,418,352 $78,815,779 $41,605, % 3.2% 3.5% - 1% - 4% - 5% COLESLAW $174,632,487 $75,683,296 $33,878, % 3.1% 2.8% - 1% - 3% - 5% Grand Total $5,457,942,406 $2,441,916,483 $1,190,820, % 100.0% 100.0% 4% 3% 2% Nielsen Scandata ending 12/17/2016

13 YOY Growth by Product Type Sales Growth YOY (Organic) Sales Growth YOY (Conventional) Organic growth much stronger than conventional across every category. Consumers trading up for organic! Angel Slaw - Angel Slaw 9% Power Greens 6% Power Greens 2% Arugula 6% Arugula 2% 50/50 10% 50/50 0% Baby Kale -1% Baby Kale -7% Spinach 13% Spinach 0% Baby Butter - Baby Butter 1% Spring Mix 4% Spring Mix -5% Romaine Hearts 8% Romaine Hearts -1% Herb Salad Mix -10% Herb Salad Mix - Romaine Blend -1% Romaine Blend -8% Italian Blend 5% Italian Blend -5% Turnip Greens - Turnip Greens 5% Bok Choy - Bok Choy 64% Salad Kit 310% Salad Kit 20% Cut Veg 18% Cut Veg 4% Nielsen scandata 52 weeks ending 1/14/17; XAOC

14 The Organic Consumer What do they believe? Who are they? Why are they buying it?

15 The Organic Shopper: What they Believe Organic is better Believe organic is healthier Products do not contain unnecessary ingredients, chemicals, or pesticides Viewed as less processed than non-organics Organic is not a trend it s a lifestyle. 50% of consumers trust organic product labels 46% agree organic products are worth paying more for 33% of consumers say organics would influence them to purchase more salads 34% of consumers say they want to avoid toxin in their food that they perceive is unhealthy Source: Mintel Group Ltd., Marketing to Millennials May 2016; Organic Trade Association

16 FAMILIARITY WITH CONSUMER PACKAGING SEALS + LOGOS

17 The Organic Shopper: Who are they They are driving category growth: Organic is the primary driver of produce and fresh growth 13% of produce sales in US are organic, predicted to rise They are a more conscious consumer: Motivated by a variety of reasons Education, health, finances, culture, advocacy, environmental issues, etc. They are willing to spend more: the organic consumer spends the most per shopping occasion $150/wk (organic grocery shopper) vs. $121/week (non-organic grocery shopper) They are mostly: Parents (w/ kids under 18); Millennials & Gen Z 81% of families w/ kids have purchased organic products Children raised on organics more likely to become long-term organic shoppers Younger Millennials and igeneration fully committed to organics born into sustainability era Source: Mintel Group Ltd., Marketing to Millennials May 2016; Organic Trade Association; Nielsen Consumer Research 2016

18 MILLENIALS CHOOSE ORGANIC MORE THAN ANY OTHER GENERATION AMONG PARENTS: 5 in 10 ORGANIC BUYERS are Millennials Source: Nielsen Fresh and Organic Trade Association 2015

19 Organic Shopping Trends Merchandising & Shopper Insights

20 MORE THAN HALF OF CONSUMERS CHOOSE THE CONVENTIONAL ALTERNATIVE If ORGANIC is not available what do consumers do?

21 Organic buyers show flexibility when it comes to Produce Of the categories, shoppers are most likely to LEAVE a retailer to purchase ORGANIC Grapes, Oranges and Potatoes at another store if only the conventional variety is available Of the categories, shoppers are most likely to switch to the CONVENTIONAL variety of Bananas if the ORGANIC variety is not available at that retailer % Of Response For Organic Produce Purchasers by Category Packaged Strawberries Blueberries Rasp Apples Carrots Tomatoes Bananas Grapes Oranges Mushrooms Potatoes Salads Purchase a different organic product instead 16% 14% 15% 16% 14% 11% 12% 10% 18% 20% 14% 17% 18% Purchase the non-organic version of this product instead 71% 68% 69% 64% 68% 74% 73% 80% 61% 61% 71% 59% 66% Go to another store instead to buy the organic version 8% 10% 9% 10% 10% 8% 9% 5% 10% 11% 6% 14% 9% Not buy anything 5% 8% 8% 10% 8% 6% 6% 4% 11% 8% 9% 10% 7% VA Veggies *PRELIMINARY RESULTS- Survey in field through 6/30/2016, results reported 6/21/2016 **Minimum of 882 respondents purchasing organic for each category Source: Omnibus HomescanPanel Survey, June 2016

22 Shopper Insights: Organics From a total department perspective, more retailers are integrating their organic products. 41% of retailers polled in SN s annual Whole Health Survey said they integrate natural and organic products with their conventional items a jump from 33% last year. 14.7% of retailers said they focused on a dedicated space or a store within a store approach, also up from 11.9% last year. A separate department works in the beginning of a trend when you want to specifically call attention to a new assortment. Pure integration works best to maximize sales. Organic has gone mainstream and shop ability is increased when integrated. Supermarket News Annual Whole Health Survery, March 2016

23 The Future of Organics o Where will the increase come from?? Increasing health consciousness Growing awareness about the benefits of organic foods Rise in organic farming Manufacturer collaboration with leading retailers Increasing accessibility and visibility in retailers across channel Significant rise in online purchasing of organic food products Capturing Millennials

24 THANK YOU