The annual Food Marketing Insitute (FMI) Prevention magazine "Shopping For Health 2008" consumer survey, the results of which were just released at the recently-ended FMI convention in Las Vegas, Nevada, found that only 9% of the 2,700 adult shoppers polled by research firm Harris Interactive on behalf of FMI and Prevention would purchase store-packaged produce over either locally-grown or organic bulk produce.
Nearly all of the fresh produce sold at Tesco's current 61 Fresh & Easy Neighborhood Market small-format, convenience-oriented grocery stores in Southern California, Arizona and Nevada is pre-packaged by the grocer in plastic tubs or bags for sale in the stores.
The FMI-Prevention consumer survey, the results of which are followed closely by nearly every major grocery chain in the U.S., also concluded that "locally-grown" produce is the new organic produce in 2008.
When cost is the same, 50% of the 2,700 adult consumers surveyed said they would choose localally grown produce over organic, even if the local produce is grown conventionally using pesticides, insecticides, herbicides and synthetic fertilizer.
The only instance in which the shoppers surveyed said they would buy packaged produce over bulk, is in the case of strawberries, which are sold at nearly every supermarket and grocery store in packages or containers anyway.
This is only the case however if those packaged strawberries are less expensive than the locally grown or organic varieties. If the packaged strawberries are cheaper, 45% of the consumers surveyed say they would chose store packaged, 34% say they would still choose locally grown even if more expensive, and 22% would buy organic strawberries even if they cost more than the packaged ones.
Keep in mind that for much of the year, strawberries sold in U.S. supermarkets are imported from places like Mexico and Central America. The local U.S. strawberry crop season is only about 4-5 months long at best. Therefore, since all of the imported strawberries offered for sale in U.S. stores are pre-packaged, American consumers are already used to seeing and buying them that way for the majority of the year. In other words, it more the rule than the exception anyway.
The key figure is that 34% of consumers are willing to pay more for bulk, locally-grown strawberries even though the packaged berries might taste just as good. This finding demonstrates the growing power of local foods, as well as the primacy U.S. consumers place on buying bulk produce over packaged.
one conclusion of the shoppers' surveyed proclaiming locally-grown as the "new organic" is the freshness factor. American consumers percieve bulk, locally-grown fresh produce to be far fresher than any alternatives. This is a long known fact in American food retailing.
The survey also probed the minds of consumers who said they used to buy organic produce but no longer do so.
The top three reasons given by these shoppers for no longer buying organic produce are:
>It's too expensive. A full 70% of those surveyed said they no longer purchase organic produce because it is too expensive for their budgets.
>A significant 39% of the 2,700 consumers polled said they no longer buy organic produce because they see no differnce between it and non-organic produce, especially locally-grown.
>A solid 33% say they are concerned about the safety of organic produce. This is a surprising finding in that one of the key propositions of organic produce is that it's "safer" than conventionally-grown because pesticides, fungicides, herbicides and synthetic fertilizer aren't used in growing the food crops. The organic produce industry and retailers should pay close attention to this finding, as it points up the need for better consumer education.
The annual FMI-Prevention consumer survey also asked consumers about their health and diet behavior. A key finding in the health category is that American consumers say they aren't doing as good a job as they should in terms of eating healthier.
However, many of the 2,700 shoppers surveyed said they would be willing to trade out many of the less healthy foods they current buy for healthier ones but the results are a mixed bag in terms of the real trade offs consumers are willing to make.
You can read more about the health portion of the survey here.
The survey also asked consumers about restricted food diets. More than one in three of the shoppers surveyed say they began a diet in 2007. Out of those who did so, 66% reported they were still on the diet by November, 2007.
You can read more about the diet portion of the survey here. It's towards the bottom of the page.
The two key findings of the annual FMI-Prevention "Shopping for Health 2008" consumer survey as it pertains to Tesco's Fresh & Easy Neighborhood Market grocery stores is the finding that only 9% of the 2,700 consumers surveyed would choose store-packaged produce over bulk.
We've been arguing for months that Fresh & Easy's packaged produced is a barrier to the grocer's goal of being a primary and even a solid secondary food and grocery shopping venue in its respective market regions.
The second key finding, that locally-grown produce is the new organic, demonstrates argument, which we make often, that Fresh & Easy is missing the boat by not carrying more local foods in its stores and touting that fact in all of its marketing and merchandising communications.
As we've said before, FMI's other consumer surveys regularly find that one of the top-three reasons American consumers site year after year for choosing their primary grocery store is a strong selection (lots of variety) of bulk, fresh produce.
We've also say regularly that "local foods", especially in the Western U.S. where Fresh & Easy stores are located, is becoming the consumer hot button that organic and premium were for the last decade. Premium and organic aren't going away, far from it. However, local is the emerging hot button and our analysis is that it will even grow hotter and stay that way for some time.
The FMI-Prevention survey shows consumers are thinking the same as Fresh & Easy Buzz is. That's not a surprise, as we base most of our trend analysis on what consumers say and do, rather than what retail chains attempt to make happen in a push marketing and merchandising-oriented way.
We aren't sure who conducted all that research Tesco always touts it had done for a two year period before the first grocery store opened. But,whoever did the research, if they really did do it, missed the boat by a thousand acres of locally-grown arugula when they decided to "advise" Tesco to pre-package nearly all of its fresh produce for sale in the Fresh & Easy stores.
We think the thought and decision making process probably went something like this: Trader Joe's stores are a big success in America, and all of its produce is pre-packaged. And, our Fresh & Easy stores are modeled in-part on Trader Joe's stores. Therefore, since there are operational and economic advantages to store-packaging all fresh produce, and since Trader Joe's is a successful small-format grocery chain, lets pre-package all of our fresh produce too.
The problem with syllogistic reasoning and the resulting policy making such as that is: It forgets to put the consumer square in the middle of the conversation. And, since American consumers for about 50 years, right up until now, keep saying in survey after survey, as well as voting with their pocketbooks, they prefer bulk produce over pre-packaged, the results generally fail. The consumer is always right, remember?
Trader Joe's can get by with selling pre-packaged produce because its positioning and goals as a food retailer are different than Tesco's with Fresh & Easy.
Trader Joe's positioning is to be a secondary and even tertiary grocer, and it makes tons of money doing so.
Tesco's entire strategy however with Fresh & Easy is to be a primary and in some cases secondary food and grocery shopping venue for consumers. Or, as Tesco says, "The stores are for everybody."
Majority pre-packaged produce is a barrier to entry for Tesco in converting consumers into primarily primary and partly secondary shoppers for their Fresh & Easy stores in any meaningful numbers in our analysis.
But don't rely on our analysis. Just do a survey and ask the American consumer like FMI and Prevention did. Maybe instead of only 9% voicing a preference for store-packaged produce over bulk local and organic, the number might be doubled, to 18%.
We doubt it though, we're being generous. And even if 18% said they would take store-packaged over bulk, that's still a very poor percentage. That's why you don't find America's oldest and most successful supermarket chains selling the majority, or even half, of the fresh produce items in their stores in packages and containers. It's been tried in the past, and has failed.
The consumer always has the last word. That's why it pays to listen very closely when they speak out, whether in surveys or with their hard earned dollars.
By the way, if 50% (1,350 shoppers) of the 2,700 adult consumers in the survey say "local" is the new "organic," while only 9% (about 260 shoppers) voice a preference for store-packaged fresh produce, does that mean "store packaged" is the new "Ford Edsel?"