PACKAGING + PRODUCE. Exploring Consumer Perceptions, Challenges and Areas of Opportunity for In-Store and E-Commerce Channels

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1 PACKAGING + PRODUCE Exploring Consumer Perceptions, Challenges and Areas of Opportunity for In-Store and E-Commerce Channels

2 Hello! 20+ years as a Qualitative Research Consultant Experience includes research for products, packaging, services, marketing and advertising in many categories including CPG, pharma, medical device, real estate, financial, telecommunications and dining among others. Intensely curious I ask a lot of questions. Kaylor Hildenbrand Principal Consultant Eerily intuitive have been accused more than once of reading minds. Passionate about packaging, especially form and function and if that makes me a packaging geek, so be it. PARK Research Partners PackageSPEAK

3 PACKAGING + PRODUCE + PEOPLE How and What We Learned o Consumer research with shoppers in Chicago, December o Focus group sessions complemented by online video ethnography (they took us shopping and into their homes via video). Here today as a thought-starter! Consumer research sponsored by and shared on behalf of

4 PRODUCE + PACKAGING What s happening today?

5 The produce section is the final frontier where loose items reign over packaged. Merchandised as a place where the food is the star and freshness is on display. Shoppers look, touch and often smell items as they shop the section.

6 Here, packaging is generally seen to offer containment, convenience and protection for some items.

7 Packaged produce is a known entity in terms of price.

8 With produce, one package size does not fit all.

9 And when there is one bad apple... Just as shoppers want to inspect individual pieces of produce, they also inspect packaged produce as best they can. One bad piece seen in the bunch means the package remains on the shelf.

10 Does packaging belong in the produce section? Sure, if it brings value. o o o o Extending shelf life and minimizing food waste seemed to be a tipping point to sway packaging minimalists. Could mean fewer preservatives in the food (if packaging does the work). Packaging can save time and steps (produce remains clean, protected). Recyclable materials or bio-plastics makes it easier for some to say Yes to packaging produce. Fruits and vegetables, in addition to generally being healthful, have a tendency to bruise, brown, wilt, oxidize, ding, or discolor and that is apparently something American shoppers will not abide. For an American family of four, the average value of discarded produce is nearly $1,600 annually. (The Atlantic, references a Guardian report 7/2016)

11 PRODUCE + PEOPLE How do they shop?

12 In store, they shop using all five senses. In store, the produce department can be inspiring and overwhelming. Shoppers look, touch, thump, smell and yes, even taste items, especially fruit, in an attempt to pick the best. Fruit and salad items seem to get the most scrutiny since these are typically eaten as is versus cooked.

13 Online, they search by item, choose a quantity and cross their fingers. Concerns over quality are more prevalent than concerns over the handling of the items. Buying packaged goods from a known brand is one thing. Buying fresh produce online was called a crapshoot.

14 Convenience, cleanliness and care are key considerations. I don t like a lot of packaging. But I ll use the bags if I am grabbing more than 3 or 4 of something. I don t want my fruit on the belt where people have touched it or put things like chicken packaging on it. I like that they bagged each item separately. That s how I would do it so it shows me they took time and care with it. (Online shopper) I counted 13 bags in my order. That is too much. (Online shopper)

15 Retailers have a lot at stake as well. A store can be judged harshly if the produce is not fresh.

16 FOOD WASTE How bad is it?

17 Shoppers formulate strategies, almost like a quarterback for the household whose game plan is to avoid food waste.

18 Kathleen schedules her family s fruit consumption to avoid waste. We have berries for breakfast Mondays and Tuesdays. We always have to eat the berries first. Grapes can sometimes last toward the end of the week, but we know we always have apples, kiwis and bananas and those will wait until the very end when we are out of the good stuff. My daughter is like, I know, Friday I get apples. It s annoying."

19 Even with all the planning, food waste is unfortunately a common theme. Beth feels ripped off. It s always the strawberries. I feel like they are bad wherever I get them. They go bad so quickly. They look fine in the store then two days later, they are moldy and gross. It s frustrating."

20 Concern for food waste impacts behaviors. I would love to be able to buy more on sale but I know it will be wasted. o Buying less o Taking extra steps o Second-guessing themselves on what needs to be used first I line my produce drawers with paper towels because I know there will be that one cucumber. I started putting kitchen towels in the bottom of the drawers because inevitably there will be a nasty puddle of something that used to be fruit. Monika

21 Beth purchases her produce based on her travel schedule to avoid waste but misses out on certain things. I live by myself and travel often. I have to think like, I m only here for three days so I can t buy this. In a perfect world, the berries would last the entire month and it would be great. No chemicals, and I could take them with me when I travel that would be the best scenario...i realize it [concern for food waste] limits what I buy. I don t eat as much healthy food as I d like or as I should.

22 PRODUCE AT HOME How is it managed?

23 At home, produce is stored in the refrigerator and on countertops. o Some items are out on display. Some are refrigerated. o Bags provided by the store can be helpful but a cluster of nondescript bags does little for identification and items can be overlooked. o Paper bags can are sometimes used to help with ripening. o Produce that comes packaged is generally stored in the original packaging.

24 Too hot, too cold or just right? A challenge for online shoppers. Online shoppers are often given a window of time for delivery but a delay in getting to their order and getting the items properly stored can mean produce not at its peak of freshness, especially in urban areas where some deliveries are left outside no matter the weather. Ice packs are sometimes used but if the ice pack is in direct contact with delicate produce for an extended period of time, it can lead to damage. They use insulated bags but what if I miss my train and it sits out too long? There are ice packs but if they are right on top of my spinach, it can damage it.

25 To wash now or later that is the question. Some like to wash and cut items right away for convenience, the easy grab for a healthy snack. Others believe this practice means fresh items won t stay as fresh as long and prefer to wash items just before consumption. Nearly everyone feels fruit and veggies should be washed before use even if the items are packaged. Bagged salad and such that is pre-washed seems to be the exception. When you say wash, you mean just rinse, right? Some also debated the merits of special fruit and veggie washes. While most use water, some will add vinegar to the wash to cut down on bacteria they say can hasten spoilage.

26 OPPORTUNITY AREAS What could packaging solve beyond containment?

27 Whether shopping in the store or online, the key word is UNCERTAINTY. Online shoppers are unsure how their items will be selected and some are anxious about the quality of the products they will receive. In store, shoppers take time (sometimes a lot of time and sometimes reluctantly) to inspect fruits and vegetables. Still, many admit that they really don t know what they are looking for and remain uncertain they are making a good choice until the final test at home where they can evaluate taste and see how long the items stay fresh. I act like I know what I m doing but I really don t.

28 Beth and Alice attempt to select a good melon but say it s no guarantee. Melons I don t know how to tap them. I don t know enough so it s hit or miss. Beth I smell the belly button of the melon. Sometimes it works, sometimes not. Alice Michael questions basic logic. Considering there is an expiration date on my bottle of water, I think some sort of indication of freshness for fruit would be expected. Michael

29 And UNCERTAINTY continues at home. Is this still good? How much longer do I have to use this? Should this be refrigerated? Is it best to wash everything now or just before I eat or use it? (A raging debate!) Which ones are the fresh ones and which ones did I buy last week? These are really good, but I don t know if the next ones I buy will be. It s not like a brand where I know what to expect. Where were they from anyway??

30 Solve for UNCERTAINTY and good things happen. SHOPPER CONFIDENCE PRODUCE SALES FOOD WASTE

31 How do you solve for UNCERTAINTY? A 3-step packaging approach LABELING Shoppers want expiration or best by dates so they know what they are purchasing is fresh, and they have a target date to consume it before it goes bad. Labeling TECHNOLOGY Through innovative film technology, extend the shelf life of produce and give consumers a heads up when time is short. BRANDING Let packaging tell the brand story and through story and consistent standards, consumers will find appeal and grow more confident purchasing the brand (a key online component - building trust). Technology Branding

32 Packaging that instills confidence gives shoppers permission to enjoy. Quantifying an unknown with freshness dates and promoting a brand with story (origin, mission, standards) and accountability goes a long way in minimizing risk for the shopper, in-store and online. When shoppers can select produce with greater confidence, experience longer shelf life and less food waste, they are more apt to purchase fresh items in greater quantities.

33 Marco freely admits to uncertainty around selecting produce and imagines a better, more convenient way. I often buy produce online because I m not very good at picking out my own produce. I ll order online because they tend to pick it out better than I do. And it s convenient With more (branded) packaged items, I would imagine you d begin to be able to rely on it like I do with home delivery because it has been packaged with a recent date and it s clean and fresh. I don t have to stand there pretending I know what I m doing. I can just grab it and go.

34 A longer shelf life for produce equals freedom for Kathleen. (Yes!) I could go and buy a ton of fruit if it is going to last 10 days!...i wouldn t have to plan everything I d go all in! Eating what we want, when we want! And bulk buying power for Rose. Buying in bulk is popular If there is a way to buy produce in bulk and have it stay fresh, that would be nice.

35 Dennis, Kevin and Magdalena look to branding to indicate consistent quality standards which leads to trust. A brand would mean expectations of consistency. I would have confidence I could grab a package of whatever and not have to be concerned whether it is good or bad. I would know it is good if it is a good brand. Dennis I always go to a certain kale and the same package of spinach. I can t tell you what brand it is, but it s good and I go to it every time. Kevin A brand puts a face on it and now someone is accountable. Magdalena

36 More opportunity? Keeping produce at the proper temperature can also impact shelf life and perceptions of freshness. And how items are packaged for transport translates to caring for the food. Help online shoppers order produce more confidently knowing it will make the trip in good condition, even if they are delayed unpacking their order. And carefully packed orders with items separated and protected shows attention to detail. Can packaging serve as protection, insulation or provide temperature control? Again, confidence gives people permission to enjoy.

37 More opportunity? Securely protecting produce from contaminants, tampering, and keeping pre-washed items clean could save consumers a step and take the guesswork out of when to wash. It might have taken some a while to trust pre-washed lettuce, but now that they do, it s a tremendous time saver. And people debate when is the right time to wash produce will doing so too early lead to spoilage? Can secure packaging of pre-washed produce save people a step and extend shelf life? Can this add to the convenience of online produce delivery?

38 More opportunity? Consider cooking fresh vegetables in the bag and how that might deliver on convenience and authenticity. Sure, there are options to cook frozen vegetables in the bag, but for some, that does not feel as authentic as cooking from fresh. When discussed, being able to roast vegetables in the oven in the bag (or a bag that unfolds into a baking sheet, as one suggested) seemed more appealing than a quick spin in the microwave. Could this become a component of meal-kits? I don t think cooking in the bag makes it not a home-cooked meal or less healthy. And to not have to wash a giant sheet pan, that s great. Magdalena

39 Even more opportunity? It seems all good things must come to an end and packaging has a play there as well - and for smoothies! Some consumers move items that are nearing expiration from fridge to freezer to extend shelf life. Kale and berries were mentioned as prime examples ironically, also key ingredients for smoothies! With fridge to freezer packaging, it saves a step and saves the consumer from having to purchase and use their own freezer bags meaning less packaging overall. I move fruit to the freezer. It preserves it and I can use it in the blender later. Not having to transfer it would mean less garbage for me. Convenient. George

40 For packaging to play well in produce It needs to let people do what people do, as much as possible. In-store, visual inspection is most important. Being able to feel for firmness is important in evaluating some produce, too. Pack size and defined per pack pricing are also variables to consider since one size does not fit all. It needs to showcase the appealing aspects of the produce, not detract. Food must remain the star. A sense of freshness and authenticity should be maintained and communicated. Technology cannot overtake the natural aura around produce. Branding will come with expectations of consistent quality, in-store and online. Transparency, protection, accountability.

41 PARK RESEARCH PARTNERS KAYLOR HILDENBRAND Principal Consultant T Kaylor@PARKresearch.com PackageSPEAK on Facebook