As the US unemployment rate hit 13 percent and will likely to continue to climb, an increasing number of Americans are watching their wallets and scrutinizing how to spend their grocery dollars. “I have concerns. It’s always more expensive to eat healthy than it is to eat canned or frozen food or a bag of Doritos,” says Brett Baker of United Apple Sales of Lyndonville, NY.
So, what do soaring unemployment rates mean for produce buying in the US?
Value is key
Due to the effects of COVID-19 in North America, certain produce items have emerged to see more demand than others including apples, onions, potatoes, oranges and more.
Photo: United Apple Sales
However how these items are being purchased has shifted somewhat. “We’re seeing stronger movement in bagged items, though we’re not seeing a decline in the loose apples even though the bags are doing better,” says Baker. With families at home, bagged items make for an easy shopping grab and also puts smaller apples back into play, he adds. (Smaller apples can often be used in foodservice contracts with schools and other institutions—many of which have shut down because of COVID-19.)
Over at New York Apple Sales Inc. in Glenmont, NY, Jim Allen sees more movement as well to larger bags such as 5 lb. or 8 lb. “It is quicker to restock bag displays than loose, and also bagged apples are perceived to be less vulnerable to consumer contamination than loose,” adds Allen.
Foodservice’s effect
As many in the agriculture business know, the strong decline in foodservice business may also influence what consumers pick up at the grocery store. “While pricing on onions is a mixed bag, large yellow onions that typically are used for foodservice are oversupplied and the market reflects that,” says John Harris of Fort Morgan Co.-based Paradigm Fresh. “Most medium-sized onions are in shorter supply as they’re being bagged for retail and retail movement on these items is up it seems.”
Photo: Paradigm Fresh
Tighter purse strings also may mean sidelining some products. “Definitely some items, especially exotic fruits in our case, are basically out of the picture as the emphasis is placed on the essential items that are not only more affordable, but sustainable,” says Alan Goldberg of A&B Tropical Produce in Miami, FL.
Goldberg adds that the panic buying that is still happening somewhat has an effect on fresh produce purchases. “With so many people out of work, shoppers need to be extremely diligent about what kinds of food, not only produce, they will be able to purchase,” he says. “Panic buying of non-grocery items puts additional pressure on the household budget, as it most likely takes away from what families would otherwise spend towards produce.”
Evolving demand patterns
As a result of all of this, some uneven demand patterns have emerged in the grocery stores. “Once warehouses were stocked and actual foot traffic at stores slowed, demand diminished and it actually dropped below the pre-COVID-19 time,” adds Allen.
Photo: New York Apple Sales
Of course, the newfound shopping habits of consumers also factored into the issue. “The fear of going into stores frequently is also a detriment to fresh produce purchases as people are gearing towards less perishable grocery items and stocking up on frozen vegetables for shelf life purposes,” says Goldberg.
And whether they’re in the store looking at produce or filling their e-carts with items, choices for consumers have also become limited. “While the sales of higher priced fresh foods scaled back, apples stayed somewhat steady. Varieties like Gala, Fuji and Red Delicious are affordable,” says Allen. “But movement on higher priced club varieties or managed varieties slowed to a snail’s pace because of price. Retailers also only have the time and the labor to stock the most popular skews.”
What now for growers?
So where is all of this leaving growers? This too is a mixed bag.
While Goldberg points to growers in South Florida for example who are eyeballing rotting crops or packing up and moving produce at open prices in hopes to recoup the bare minimum, others like apple marketers are keeping watch. “We certainly have cut down on production because the orders aren’t there right now. We just have to be ready to react,” says Baker.
It also makes for an uncertain future. “I doubt we will see general trends in the marketplace return to normal until possibly this time next year,” says Harris. “Right now, my leadership team is strategizing on how to fit in with the new market conditions and creating a plan to bring value to the newfound needs of this current market. Hopefully we’ll create some new opportunities that didn’t exist before all of this.”
For more information:
Brett Baker
United Apple Sales
Tel: +1 (585) 765-2460
[email protected]
www.unitedapplesales.com
Jim Allen
New York Apple Sales
Tel: +1 (518) 477 7200
[email protected]
www.newyorkapplesales.com
John Harris
Paradigm Fresh
Tel: +1 (970) 775.2049
[email protected]
www.paradigmfresh.com
Alan Goldberg
A&B Tropical Produce
Tel: +1 (305) 805 1530
[email protected]
www.abtropical.com