Supermarket Perimeter - January 2020 - 58

SPOTLIGHT

by John Unrein
THE LATEST QUARTERLY EARNINGS REPORT for Del Monte
Fresh Produce, Coral Gables,
Florida, revealed a notable jump
in fresh-cut fruit sales - indicative of the promise of this fresh
convenience category. Del Monte
reported third-quarter net sales
of $145.3 million for fresh-cut
fruit, an increase of 10% over the
prior year period.
"Positive trends continue for
Fresh Del Monte with a strong
ﬁnancial performance in the third
quarter of 2019," Mohammad
Abu-Ghazaleh, who has served
as Del Monte's chairman and
chief executive officer since 1996
and was instrumental in cementing the company's role as one of
the world's pre-eminent fresh,
fresh-cut and prepared fruit and
vegetable producers and distributors, said on an earnings call. "We
are emphasizing value-added
margin growth in all product

lines, generating momentum
with global partnerships, introducing trend-forward products,
and are opening new state-ofthe-art facilities in Mexico and
Japan. Our retail store concept in
the U.S. will be coming soon."
Value-added fruit offers such
promise for Del Monte that the
company plans to open its ﬁrst
fresh food and beverage store
in the United States, planned for
Coral Gables, during ﬁrst quarter
2020, Abu-Ghazaleh said on the
call. Del Monte opened its ﬁrst
retail store in May 2015 at Abyat
in Riyadh, Saudi Arabia, where the
Del Monte Fresh Market features
grab-and-go food and beverage
options including smoothies
and salads.
Looking at the macro picture,
a new Nielsen report reveals
that the success of "fresh retail
superstars" in the US supermarket
industry points to the fact that

"fresh is the growth engine of the
store, as gains in these perimeter
departments translate to total
store success." The superstars are
succeeding by taking freshness to
the next level.
For the most successful retailers, produce (up 2.6% in 52-week
sales ended Aug. 24, 2019) and
deli (up 4.9%) departments provide the greatest contribution to
total perishable sales, according
to Nielsen. This debunks the
long-standing belief that the
meat department contributes the
highest impact to the success of
the perimeter of the store. It likely
reﬂects, Nielsen reports, consumers' changing wellness needs, as
well as their growing demands
for convenience. With more than
three-fourths of deli sales coming
from random weight items, top
fresh retailers have honed a more
authentic, ready-made feel.
"Entertaining at home is

A smorgasbord of choices

Sales of fresh-cut fruit ticked up 10% in the third quarter for Coral Gables, Florida-based Del Monte
Fresh Produce.
58 - JANUARY 2020

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Walking the exhibit ﬂoor of the
Produce Marketing Association's
2019 Fresh Summit convention
and expo, the variety of fresh-cut
fruit options available to today's
retailers proved impressive. Pears,
mangoes and even jackfruit were

JOHN UNREIN/SOSLAND PUBLISHING CO.

FRESH-CUT FRUIT

increasing, and demand for party
trays is increasing," points out
Doug Burris, executive vice president of sales and procurement
for The Woodlands, Texas-based
Fresh Food Group, which offers
cut fruit (including sliced apples)
under its Country Fresh and Sun
Rich companies. "Convenient
packaging has caught up to the
fresh produce industry, and consumers have more choices now."
For fresh retail superstars,
according to Nielsen, success
hasn't come from necessarily
carrying more (or fewer) items,
but from having the right items in
fresh. Today's consumers value
health-conscious food options,
and top performing fresh retailers
have responded by featuring
nearly three times as many
different plant-based offerings
as lesser performers - a savvy
move, considering nearly 60%
of U.S. consumers value dietary
balance between animal and
plant foods.
It's important to remember
that produce purchasing remains
a necessarily tactile, in-person
experience for many consumers.
Leading fresh retailers understand this and signiﬁcantly
outperform lesser ones in avocados, apples and berries. These
produce items are among ones
where consumers look or feel to
conﬁrm freshness. Consumers
crave a destination, not just a
store to stock up. Experience,
personalization and convenience
win. In fact, foodservice offerings
are up 10% in sales year over year,
Nielsen reports.

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Supermarket Perimeter - January 2020

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