Anne-Marie Roerink on changing consumer dynamics and their impact on produce

Speaker A: Foreign. Welcome to the Produce Retail Podcast. I'm your host, Ashley Nicholl, and I am delighted to have returning to the show today a listener favorite, Annemarie Rorink. She is the principal of 210 analytics and renowned for her fabulous produce presentations. But in the last couple months, she's actually been at events for all different parts of the store, from meat to seafood to frozen to candy. And with that in mind, Anne Marie is the perfect person to visit with about what's happening broadly with the consumer and how it impacts produce. So, Annemarie, thank you so much for taking the time. Welcome back to the show.

Speaker B: Oh, glad to be back. Uh, I look, I always enjoy our conversations, so fire away. I am ready.

Speaker A: Super. Well, seems like the obvious place to start is we're seeing this continued price sensitivity among consumers. Just being very cognizant, I would imagine, even just top of mind for so many people when they're making that meal plan, when they're making that grocery list, looking at that, I mean, if you're online shopping, looking at the cart total as you add things to the cart and thinking, um, do I want to be here, do I want to be there? What can I take off? Just more scrutiny, I think, as it relates to the budget. So I'm curious, how are we seeing that manifest in produce sales in particular?

Speaker B: Yeah, I love. Scrutiny is a great word. I tend to use recalibrating. Right. Because we're not seeing consumers exit categories altogether. Like if you look at the household penetration of chocolate or, um, apples, whatever, like, we haven't really lost households in anything. But what we are seeing is people are making changes to how often they're buying something and, and how much they are buying something. So you mentioned all these different categories, and they all have one thing in common. Right. We see consumers be much more, um, going into the store with a list being planned, being, uh, ready to not look at anything, impulse, really stick to that list. And with all of that in mind, where are the sales promotions that I want to capitalize on and how do I prevent food waste? So big emphasis on every dollar I spend has to be in dollar enjoyed and whether that is meat or produce, fruit, what have you. Um, so that's an important thing to keep in mind. And yes, you're absolutely right. We're seeing, uh, a lot of pressure on income, A lot of pressure on today is my paycheck, um, how am I going to make it to the next paycheck kind of mentality. Uh, now the interesting thing is if you Think about it. From a society, there are those who are economically well off and they don't have to worry about living from paycheck to paycheck. They don't really have to worry about even realizing how much they just spent at the grocery store. So that is an important thing to keep in mind. If we look at all consumer spending in the US the 10% of the highest household incomes represent 49% of spending. So 10% of household represent virtually half of all consumer spending. That is up from about a third in the 1990s. So we see that continued growing influence of high income.

Speaker A: That is remarkable. Oh my goodness. And this, this might be a layer. Two, this might be a layer too far. So tell me if it is. But that 10%, what is, what's like the bottom of that 10% range? As far as like household income, do we know kind of like what that 10% is? Kind of like what, what kind of earnings is that?

Speaker B: So that highly depends on region. And that's honestly the hardest thing to do when you're doing surveys. If you think about, say a $200,000 salary in new York City is probably middle income and you can't live very largely that, but $200,000 in a Midwest city would be very, very different. So, uh, they do look at that a little bit to understand relative to cost of living. But, uh, by and all, yes, that top 10%. And the interesting thing about that is if you think about the consumer sentiment index, you look at it a lot. University of Michigan, the conference board, I do the same thing. In indexes like that, every vote counts equally. So Whether you make $1,000 a month or you make $10,000 a month, or you make $100,000 a month, everybody's votes in these consumer sentiment index counts equally. But when you go to the store, votes don't count equally. And you see across categories where higher income consumers always over index for all categories. And the same is through produce. Now we don't see that top 10% representing 50% of all produce sales, but there is a huge over index where higher spending. And why is that? Well, they buy what they're in the mood for. They don't necessarily look at promotions. They buy at, uh, different stores where they feel the quality or they get the attributes that they're looking for. And so we tend to see very different spending among that lower income, financially strained type of consumer than we do among that wealthy consumer. And that is why we continue to see growth in things like organics and uh, value added and what have you is because we are in such a K shaped economy is what it's called, where, um, it is not a race to the bottom, but it is a very divided world, uh, if you will, where some are spending freely and others truly have to watch their pennies.

Speaker A: Well, and I'm curious what we've seen in terms of price perception when it comes to produce. Because when I think about say, snacks, where theoretically you've got options in every part of the store if you really wanted to. Right. In any department. Um, when it comes to occasions like that, to me fresh produce seems very affordable compared to center store when it comes to most snacks. Now you might have a little more prep depending on what you pick and all that kind of stuff. And obviously you got a big range, uh, of what the dollar ring is on different snacks. But I'm curious about produce perception from that reason because for me it feels like a good deal more now more than ever. But I don't know that that's necessarily the case just because of how people are looking at food prices broadly.

Speaker B: Yeah, it's always astounding to me because to your point, um, it is a very reasonable price per pound price per unit. Uh, certainly compared to items like chips and more traditional snacks that have gone up tremendously. Um, and that's the other interesting part. Fresh produce has among the lowest inflation over the last five years of all departments. And yet when you ask consumers about their value perceptions of frozen, of canned, of fresh, fresh produce always get dinged for being expensive. And uh, I think in part, maybe what plays into that is the money you pay, but also the money of what you maybe throw out because you didn't get around to eating it. Um, maybe it is a perception of, well, this is the high quality and therefore, um, maybe I pay more. I have no idea where that perception comes from, but it's been very sustained. We've been asking that question on fresh versus frozen kind of thing for many, many years. And we always hear consumers say that, well, fresh produce, it's very expensive. And uh, the more we can do to figure out how to tackle that value versus price I think is very important.

Speaker A: Well, and it, when we talk about kind of speaking to the value or other kinds of messaging that hopefully would change that perception or evolve that perception a little bit for consumers. Um, one of the things I noticed when I was looking over the Power of produce report, um, from FMI and the Southeast Produce Council that you recently presented at Southern Exposure, one of the things that it showed was the increase in fixed weight produce over the last five, six years. And I was curious what we'll start broad, what the implications of that are for fresh produce.

Speaker B: Oh, so many, um, actually you mentioned me going to many different conferences. One was candy. And in a way, candy and fresh produce have something in common. And that was bulk used to be very common in candy. And it's really all gone to prepackaged products. If you think about the candy aisle and think about how many grocery stores have bulk candy left. Well, if you think about the produce department more and more fixed, uh, weight, to your point, that means it's packaged, right. Ah, it's sold at as an each versus you grab your own potatoes or oranges or what have you. Um, now it has pros and cons. We know that when you have say an apple display, that people might just buy one or two if they just want one or two. We also know that if you put some bags next to it with five or six apples, that a lot of people who are in a hurry will grab that bag and spend a little bit more money. So there's, there's definite, uh, advantages to having pre, pre packaged product in the sense that people might buy something bigger than they actually need or had intended. On the other hand, in an economy where people are truly pressured for money because they have to spend four or five dollars on said apples, maybe if they could buy just one or two and spend a dollar or two, maybe they would buy apples instead of foregoing them and buy them a little bit more often, those kinds of things. So I believe there is still a lot of opportunity in bulk. It certainly also creates a beautiful visual which we know draws people to the store, we know drives impulse purchases. So in part I completely understand, uh, the prepackaged. It makes it easy in self checkout lanes, it makes it easy in e commerce. Um, but I would definitely, um, be hesitant to move away from bulk too much.

Speaker A: Well, and we've talked probably over the years about the upside of packaging is you have this real estate on which to market the product. And I thought about this the other day because my husband got gushers at Sam's club. And right at the top of the package it says a good source of vitamin C. And my eyes about bounced out of my head. Excuse me, you're trying to convince me that gushers is the right source of vitamins. I about lost my mind. But I thought, goodness, how often is that not necessarily visible on all these packages of fresh produce?

Speaker B: 100%. And, and people, you know, obviously fruit is nature's candy. People love it. But the more we can give them reasons to love it a little more and see all these nutrients in there and fruit and veg, uh, whether that's vitamin B, D, C, potassium, um, whatever, uh, I think that's extremely important. And to your earlier point, a lot of consumers realize citrus fruit equals vitamin C. Like that's, that's their little knowledge of the prod department. Uh, but many do not understand that, uh, bell peppers have a lot of vitamin C as well or, or what have you. And so I think that is actually the ideal example for this TikTok world that we live in, right, where we hear these little facts in a funny way or a way that sticks with us. And, uh, you're absolutely right. I think one of the biggest benefits of packaging is that real estate, uh, not just for branding, that we're seeing coming into the department more and more, but certainly storytelling as well. I think increasingly we live in a world where data tell but stories sell. And the more we can focus, uh, on that, who was the farmer behind it? Where did it come m from? Use the imagery, use the nutrition also. What does the nutrition do for you? We're seeing that in the dairy department really strongly where meat might now put protein call outs and say this steak has 22 grams of protein. But what we're seeing a lot in dairy is milk has, making this up 10 grams of protein, drink a glass after a workout or before a workout kind of thing. So they're tying together that idea of protein, muscle maintenance, muscle building. Uh, and that is, I think, something that produce can definitely learn from because we offer such a wide variety of nutrients. And what do those nutrients do for us? Do people really realize what is potassium and do we need it or which ones have iron or whatever it might be?

Speaker A: Well, and I'll, I'll contradict my earlier commentary about packaging because I know that, for example, the, the whole fiber maxing trend, right. You would think produce fits easily right back into that, but I know it takes a long time to change. It might take, uh, there might be a significant lag time to update your packaging and even doing something like having a sticker and applying it to existing packaging. Okay, well, who's doing that? What's the cost of the labor and the sticker and you know, the added things to even do things like that. Which is, I think, where we sort of get back to the, the old school. You know, signage in stores and people talking to the folks walking through the department and, you know, maybe you've Got a big old sign in the entire department. Welcome to the department of fiber. I mean, uh, it could be anything, right? But like I'm trying to think about how, how does produce kind of tap into some of these broad things that seem like they might actually be a really great fit.

Speaker B: Yeah, well, and I agree, I think it does start with signage. If I think about just walking around, like Hannaford for instance, produce trips, uh, tips everywhere on like, the color of the leafy greens is an indication of the types of nutrients or what have you. But you know, if you take that a step further and you think about all the in store media that is available right now with TVs and screens and rotating messages, it becomes a whole lot easier to rotate through quite a number of messages. I remember years ago I saw this long stretched screen that was over the berry display and it had a rotating message about where the berries came from, what types of nutrients berries have. And then it rotated through just some usage occasions. Putting berries on ice cream, putting them on pie. Um, and so as a consumer is standing there, maybe picking their berries, those are the kinds of things where I think we can have a lot of, uh, fun and certainly use all those new technologies. And I mentioned certainly, uh, TikTok and Instagram and all those different social media platforms can tie back to what we're seeing in the store. Uh, the QR code. I have to be honest, I go back and forth on it. It's a very easy thing to slap on the package. But we know ultimately, um, the usage rate isn't amazing. But at the same time, if it's a dead corner of your package, why not put it and bring people potentially to all those, um, sources of information relative to the farm, to grow or to wear, to watch. And what can you do with it? Sure.

Speaker A: Well, we, you mentioned protein and we talked a little bit about Fiber magazine. What are, what are other trends you're seeing? And I'll stop there and then I have a follow up on that.

Speaker B: All right, so I'm going to actually answer that one a little bit more broadly because I think, uh, there's a very interesting trends happen. We talked about affordability. The other huge trend is what I call the changing of the guard to slap a fancy label on it. All of that means is for the last 30 years, the boomers have been our majority consumer. We know them, we know what they buy. They buy all sorts of different veggies and fruits, but they buy in the same store the same day. They probably go to the same checkout. Lane, we know them. What is happening is over the next year or two, we're going to have Millennials take over as our majority shopper, meaning they have the largest share of units and dollars. Well, that comes with a host of differences. Millennials are more focused on organic, on convenience, on sustainability, on taking care of the community. Uh, they cook very different meals, which is. I finally get around to your actual question. Um, if you think about a Boomer meal, it often is still a true center of plate, piece of meat, be that pork chop, be a steak, whatever, A, uh, veg and a side. If you think about a very typical Millennial meal, you're thinking fall, you think in tacos, you think in, uh, pasta meals. And so certainly, uh, vegetables and fruit fit into those, but they're very different or different items. And that means we're going to see those trends ripple through a lot of what is being bought and what is being done with it. So that is something to keep in mind. Like the younger generations, Gen Z and millennials, they represent 60 to 70% of the unit growth these days. Well, if they're more into, say, Asian dishes and you don't have some of the basic Asian veggies, uh, or in Asian, like, um, like a, uh, stir fry kit kind of thing, or even items to throw in ramen or sushi, those kind, like what goes with sushi, those kinds of things, you might be missing out. And so for, for that matter, I think we can go down to the protein and the fiber maxing and types of, uh, trends, but I think there is actually a trend that sits above that, which is what type of meals do we believe will be. Will flow to the top here over the next five years?

Speaker A: Well, and I'm curious, too, even the state of assembly in which people are buying their meals too, how much are we seeing people still go for individual ingredients versus either meal kits? I noticed, uh, the retailer that I frequent, they have these meal kits. And. But it's. There's not really any preparation required. It's. It's the noodles, it's the vegetables, it's the chicken that's already been cooked. And, you know, you start. You start by throwing in the veggies. You let those go for a few minutes, you throw in the chicken, you let that go for a few more minutes, and then you throw in the noodles and the sauce, and it sort of feels like cooking, but you've done no preparation. Everything is ready and in portion, and it takes 15 minutes. And so I'm curious that now, again, that's my household. Right. So I don't know about everybody else, but I'm curious too, in terms of like, stages of preparation, how we see that flow into things too.

Speaker B: Oh, and 100% that is, that is the other part of it, right, Is not just what are they cooking, but how are they preparing it. And if you think about those Gen Z and millennial households, especially the M. Millennials, they are coming into more income, but also tend to now have a larger household size, which, as you and I well know, means a lot of pressure on time, A lot of pressure on constantly figuring out that time puzzle. And that's where solutions like that come in. So if we look at, um, do you cook every individual item of the meal from scratch or do you combine items? Or is most everything a meal like you just described? What we're seeing is the vast majority of consumers are preparing what I would refer to as a hybrid meal. So maybe I buy the meat from the meat department, um, but I buy a frozen veg and a zappable, um, uh, potato dish or something like that. And that kind of tends to rotate. So while often as a retail focused, uh, individuals here we think of fresh versus frozen, A consumer tends to very much blend those two. Like they might be cooking the meat and the pasta from scratch, but dump in mixed veggies from the frozen department or the other way around, they might buy, um, a chicken Alfredo from the frozen aisle, but they might buy a salad from the produce department. And I think that is such an important lesson and question actually. Like, how does a consumer approach the meal rather than our siloed view of the world where, uh, we chase people from a, uh, prepared salad to a marinated chicken breast in the meat department, to maybe a side dish in the deli department. And they've now walked 10,000 steps instead of us putting that together in a solution like you just mentioned.

Speaker A: Yeah, well, the, the, the way you ran that down made so much sense. And what I think of, um, yeah, our family, we'll get the, we'll get the two pound thing of broccoli, or the two pounds, the large thing of broccoli that's fresh cut or it's, you know, cut broccoli. It's the broccoli florets and they're fresh. But all I have to do is pour them into the bowl, season them up, and, you know, cook them, and then I'll get the prepared chicken Alfredo and then we'll put a bunch of broccoli into the chicken Alfredo. That was that. I didn't do anything other than put it in the oven. So I do think of that. Yeah, that dynamic of we still want to. We still want to give the family good, like meals that taste good and that have nutritional value. But that time pressure. Yeah, that time pressure is the real deal.

Speaker B: It is the real deal. And, um, uh, the frustration of shopping in store, all these different departments that are very siloed. And that's, I think, where, to your point, online wins as well, where it's a whole lot easier sometimes to even click on a recipe, add all the items to cart instantly, uh, or just, you know, with a click of the keyboard, you're in the next department without having to move to physical space and be tempted by all sorts of items. So, um, but I think the whole idea of clean, uh, store policies, I get it. It is a nicer shop, for sure. Uh, it's also operationally very difficult to bring produce items into other parts of the store. But we know it works. We know that if you put av. Avocados next to the tortilla chips, they will sell. If you put potatoes and corn next to steak, it sells. But, um, figuring that out is very difficult to do. And I know we've talked about this before. Um, but if you think about that dollar moving from a boomer shopper who has a lot of time often and enjoys going to the grocery store, it's a social activity to a large extent now to the dollar skipping over Gen X. But going to Millennial are extremely stressed for time. Addressing that idea of making shopping easier, planning easier, being part of that mental load and solving that problem for them, I think is extremely important.

Speaker A: Yeah. Well, and. And again, I'm, I'm, um. We're probably on that, you know, little higher income threshold that Millennial, you know, the people with kids at home. Right. Like all those, all those boxes. But man, like prepared meals, it shapes where we, where we shop now, prepares meals and still produce because the best value with really good quality produce, that still wins. But I think prepared meals, that meat, prepared meals, I think is like, that's our trio. So I think there's. I think there's probably a lot of people in that bucket. But to your point, it's so interesting for all these grocers because you do sort of have two ends of the spectrum. You have, I'm looking at every dollar I need to make it go as far as it can. And then you have. I'm still looking at every dollar I want to make it go as far as it can. But convenience and quality are still really important to me. So trying to serve those two simultaneously, that's a big task.

Speaker B: It is a big task. And also keeping in mind that all of that is done under a lot of time pressure. And I truly believe that that is one of the reasons why we're seeing such strength in fruit among millennials. They over index for fruit, but they also are growing fruit at twice the rate as vegetables. And that's really behind why we're seeing kind of softness, flatness in vegetable sales, but growth in fruit sales. So we dug into that a lot in the SCPC study, uh, in the fall. And what a lot of millennials said is like, you know, we're, we're on the go to fast meals. And with fruit, you wash it, you chop it up sometimes, sometimes you just literally wash it and put it on a plate. And at the end of the day, um, while I was raised in, you need vegetables and you sat at that table until the vegetables were consumed. A lot of millennial parents are like, you know, as long as it's fresh produce and people have consumed, the kids have consumed fruit or veg, I don't care. And uh, a lot of the meals eaten in the car as well, where, you know, again, fruit is a lot easier. So, uh, I think a lot of those patterns we have to look at our who in addition to what does the who do to what is being bought, what is being prepared with it. And you know, what are all of those together driving the trends in the produce department? Mhm.

Speaker A: Well, and I know we, we talked about this, as you mentioned the last time, with something else that occurred to me about the, um, you know, that the growing disparity between the pattern for fruit and the pattern for veg is when you talk about food waste, when you have all these people who are parents and there's nothing more discouraging than you make this meal, you put out this food, and the kids maybe chew on it, get some saliva all over it, and then they don't eat it. And you're like, well, that was $3, thank you very much, you know. Yeah, yeah, agreed. Fruit's an easier sell. And it's a, it's like a higher percentage that the kids are actually gonna eat it and it's not gonna go bad because goodness knows you gotta buy enough because you can't run out if people actually like it.

Speaker B: Right.

Speaker A: Yeah. I wonder if that factors in as well in terms of like, we gotta get it used, the kids are going to be hard sell to eat it.

Speaker B: 100%. Yeah. When, uh, interviewing a lot of consumers, uh, for the meat department, but very relevant here, it was all about price and, you know, what do you do at home to manage your budget. And a lot of consumers mention more meal planning as we talked about, uh, really going into the store with a list and sticking to that list. But also several of the mothers in particular mentioned preparing meals and buying items that I know my family will eat. And that all goes back to reducing, uh, shrink in a way, um, as in I'm gonna buy it more often so I don't have to actually deal with shrink. But also I'm going to buy what the family will eat so I don't throw it away because the kids are not eating it. And those are very important, uh, lessons, I think, for us, because at the same time, we know people get, get very bored with eating the same old. And even though the kids might like broccoli, try to serve it three times a week, and you probably are going to get some pushback. So variety has always been our superpower. But how do we create an environment where they know what the texture will be like, what the flavor will be like? Maybe how to prepare it in such a way that the kids believe it's a little better than maybe? I mean, the one that comes to mind in mine is always the Brussels sprouts that my mom would cook the smithereens and had this white sauce over the top, and they were these meal ball things. And I could have sworn I did not like Brussels sprouts. And I love them made in the. Roasted in a skillet with some bacon, etc. So it is sometimes, uh, knowing what the texture can look like and how you can prepare something differently.

Speaker A: Yeah, I think there's. If you as a business, either either a retailer or a supplier focused on, have, like, what's a. What's a lineup of, um, things that we could make that has vegetables and that kids like? I think you would do well with that could be wrong. But I just. Man. Uh, and now I will say my kids have had Brussels sprouts and broccoli successfully in the last two weeks. So not like, that's the only. But I was very. I was very excited. We actually, we had some leftovers. They had it within the same meal. They were saying, can I have broccoli after I finish my Brussels sprouts? And I'm like, it was amazing.

Speaker B: Look at me. What a good mom. No, but I think you're right. And, uh, you know, getting kids involved continues to be important. Uh, I know a lot of retailers have discontinued their cooking classes and such, but there is social media, there are many platforms in which you can, uh, you know, maybe, uh, at Halloween times, how do you make a fruit platter that, that is something Halloweeny or what have you. And those are always, when kids have prepared something themselves, they're much more likely to eat it. But on the note of social media, I think one of the funnest stories, uh, in, in the past year. So the most Googled recipe in 2025 was the hot, uh, honey bowl they call it. And so it's a bowl that has ground beef, cottage cheese, yams, sweet potatoes, and then hot honey all over the top. That is the most googled recipe. So I got to looking at the sales numbers and yams are up double digits and they just continue to be in the top 10 growth items month after month. Who would have ever thought that? Same for cottage cheese, it's up like 15% in volume. Ground beef is up on honey is up. So that really shows, like how hard would it be to put together that particular recipe in a little island refrigerator, uh, in the store kind of thing, uh, or just simply amplifying big trends like that on your own social media. Um, and that's where I think now we brought yam into a household that maybe wasn't eating sweet potatoes before simply because it is such a big hit on social media. Tropical fruits. Same exact way. A couple years ago we asked, hey, have you ever discovered something new on social media in the produce department? And Dragon Fruit was answer number one. So this year I was curious, you know, is that a. I tried it once and I either liked it, don't like it, but it was just a trial kind of item or do people continue to use it? And lo and behold, if you look at the volume sales of Dragon Fruit and many other tropical fruits, they just continue to grow every year. Which is as we talked about earlier with the Asian veggies near these tropical fruits. That's the millennial and Gen Z impact. And if you don't have those in your store, you might be losing out on what could have been a whole new usage occasion, um, for a new shopper.

Speaker A: Yeah, it is, it is. Like you said, it's, it's probably not talked about enough, but how that generational shift is going to shift what's being bought overall. Just the assortment of things.

Speaker B: Exactly, yeah, yeah. Because even if I compare. So I asked a question. What is your all time favorite meal? And um, you see pizza on both lists, on Millennial Boomer. You see steak, but you know the number of times it's referenced, very, very different. But if you dig a little bit deeper, so you see Asian foods on both lists, but you look at the boomer list and it's like Chinese, right? Probably your beef, broccoli or fried rice or something like that. But you look at the examples provided by Gen Z and Millennials and they are very, very specific. Uh, it's not even curry, but it's like which particular type of curry or it's pho or ramen or and often like birya biryana, like very specific examples. And that just shows that um, there is greater sophistication in those areas and that uh, Italian isn't Italian anymore or Mediterranean isn't Mediterranean anymore. It is much greater sophistication, often driven by social media. And uh, the problem I think earlier is we talked about how do you balance everything between high income and low income. Well, same for these kinds of things. The big, big commodities, your, your potatoes, your tomatoes, your bananas, they're always going to be your big commodities. And you know the challenge there is how do you keep household penetration up, trips up, how do you keep the bigs, the bigs because they cement your success. But the growth can come from items like your sweet potato bowl or your dragon fruit or those items that really drive an additional at home occasion among those younger consumers that otherwise might go to food service.

Speaker A: Yeah, that's super interesting. Another thing sort of happening within retail decision making. We saw that the, the percentage of produce sales happening on promotion remains quite a bit lower than obviously pre Covid and I was curious because I know uh, again with, with the scrutiny on budgets, there have been a lot of retailers who are trying to kind of have a larger assortment of things that are everyday low price rather than sort of the high low strategy. How much do you think that plays into this and what do you think is other, other factors going into that? You know, less promotion than in previous years?

Speaker B: Yeah, we know from the consumer perspective they are definitely looking for promotions, but to your point they aren't as widely available and if they are available they tend to not be as high low as they used to be. And I think in part it is just retailers playing around with margins, but it's also in part retailers reading the marketplace overall. Because if you look, look across all categories, we do see that mass and club and hard discounters have gained share over time. Well, what do they have in common? Their everyday low value or everyday value formats. And so you know Maybe the writing is on the wall that a lot of younger consumers, Gen Z millennials, don't necessarily have all the time or, or the effort or the desire to, uh, study all these promotions. And they just go to a format where they know the price is good and yes, maybe they could buy items cheaper at a high, low format, but overall they're happy with that everyday value. So that's where I think a lot of the big commodities in particular, we're seeing a lot more aggressive everyday value, um, and then still promoting when it makes sense. But, um, there are commodities where promotions are not bringing a ton of incrementality if you have a lot of business sitting in a particular segment and is going to buy it anyway. Um, so I think there's a lot more sophistication happening around promotions. When do you promote, what do you promote, how deep you go, and how does that compare to everyday low prices?

Speaker A: Another thing that makes me think of, uh, when it comes to assortment is we talked about the shifting share of the produce dollar broadly. I'm curious how much of a difference is there in that when it comes to something like potatoes versus berries versus dragon fruit or, you know what I mean? Like is, are, uh, the banana dollars and the potato dollars shifting more to these other formats than the berry dollars or the grape dollars or things where maybe you're a little more quality sensitive, there's a little more seasonal sensitivity and things like that?

Speaker B: Yeah, that's just the beauty of our jobs, right? Where if we look at overall berries, you're like, my God, they are so big and they are still growing and it's incredible. And then you go a level deeper and you look at who is growing them, and that's very much the Gen Z and millennials, as you well know. The kids love any kind of berry, really, and it makes it super easy to get great nutrition in them. Um, but then you look at low and high income and you look at region and you look at all these different levels. And so, yes, depending on the commodity, there's a huge difference. Like, for instance, if you take potatoes, just about every household in the United States buys potatoes at least once a year. So it is not household penetration that is driving differences in are you a core potato household or just a peripheral household? But it is the number of trips. And so then you start to dig into that and say, well, who is, who is buying them more often and who is buying a larger pack sizes? And then, for instance, you're seeing that Asian households tend to purchase potatoes less often or they tend to buy just smaller pack sizes. So that then becomes a clue to say there are many Asian dishes that do include potatoes, but it all depends on which Asian culture you're looking at. And can we, you know, maybe create a dish or have a recipe that does use potatoes? And um, this potatoes came to mind. But uh, you're absolutely right. There is huge differences based on how it's shifting, uh, who is into those categories. Um, and that's really what provides the rich background and the tactics then on the back end that follow.

Speaker A: Well, and I'm curious on the channel level too, because I thought, I wonder if there are things that are so commoditized that someone thinks it's okay to buy this at Walmart, but other things that they think, no, I'm gonna go to my slightly higher end, my traditional grocer or my slightly higher end place to get these kind of things. So I know that's, that's a little bit deeper. So I don't know if you had that off the top of your head.

Speaker B: But I, I would say, uh, in the past we saw a lot of what I would call dual store shopping where uh, mass, um, in particular would get a lot of the center store purchase and then people would undertake a second trip to what would have been a traditional grocery store that was really known for their meats and their produce. That gap has closed quite a bit. Uh, and I would say a lot of consumers start at mass club discounters. Uh, but if we take Aldi for instance, right. You never know is there going to be produce? How is it going to look like there's days you come and literally there's three apples left and that's about it. So I would say the strategy now is often that they start at the everyday value format and if they can't find what they're looking for, they end up shifting to those high, low formats. Now that's where there's huge differences between the generations as well. Boomers still, by and large shop at traditional grocery stores and been very loyal to those. Oftentimes as long as they haven't moved, they have gone to the same store for a long, long time. Then we look at um, uh, millennials, uh, in particular, um, and certainly if I think back over my last ten, um, you know, when you have to buy the diapers and everything else, all of a sudden you end up shopping completely different stores. And then while you're there you end up purchasing items. So if you, you place yourself in the shoes of the Gen Z and Millennials and where they are in their life stage, you're going to see that a lot of their dollars flow to mass and club just simply because of the types of items that they're looking for.

Speaker A: You bring up an interesting point that I've been thinking about recently, which is some of these different behaviors. Whether it's where you start your shop, whether it's how much are you shopping online versus in store. I wonder how much of it is age driven and whether that's separate from, you know, life stage. Like is it the fact that I'm 35 or is it the fact that I have two kids at home? You know, I'm, I'm curious if those are, it's all kind of the same or if there's differences there.

Speaker B: Well, um, it largely overlaps simply because of when people tend to have children. But yes, when you look at what are truly life, what are truly changes that drive behavioral differences, be it in where you shop, what you buy, what you prepare, how often you eat at home versus eating out. The two big ones are definitely going from a single household to living uh, with somebody. And then the biggest, biggest one is always the arrival of children. So that's where we often see people get into organics, for instance, children still tend to be a big entryway to organic purchases. Uh, more meals at home, you know, you're looking for that stability, you're looking for that home prepared meal. And that's the important thing to keep in mind. So if you think about that total millennial generation that's almost 20 years, the oldest 10 tend to now have children and be in that very, uh, busy, I need help on the time end more than the cost end. But if you look at Gen Z and the younger millennials, they are still very much in their family forming years. And so we're going to have a whole other bubble coming up there in terms of consumers that will likely shift dollars around, meals around, trips around. So it's going to be a very interesting next 10 years for sure.

Speaker A: Well, and even the, the changing dynamics of um, when in their life people get married and have kids and so kind of the elongation of some of those different life stages or the repositioning of those throughout, you know, the timeline of a, uh, of a lifetime, I guess that's sort of an interesting factor maybe in there too.

Speaker B: For sure, for sure. And then, you know, if you look at the boomers, they are still 32% of total spending. But when you have to look at it through a quite brutal lens, you know, the average lifespan in the US is 78 and the oldest boomers are now 80. And so we are, um, going to see some of those dollars fall away and also shift. If you think about maybe boomers moving into retirement homes or moving in with their children, uh, that all is going to relate to shifting dollars from retail to food service or two different households as well. So on both ends of the spectrum, I think, uh, we're going to see some tremendous change. And with that change, then comes the what are people buying? What are they doing with it? We haven't even talked about appliances yet. I can't believe we've had a conversation without talking about our air fryers. Um, but yeah, that's the whole other thing, right? It's uh, the oven becomes less prevalent and instead people are using air fryers, microwaves and what have you. And all of that, again, has an impact on what you're gonna sell in that grocery store.

Speaker A: That's a great, that's a great point. Is what takes a long time to cook. Because as you get more younger, people getting, becoming that older end of the spectrum. Well, the things that take a long time, that might be a harder sell or you have to figure out new ways to format them or all that kind of thing too.

Speaker B: Yeah, exactly. And, and that's where I think Brussels sprouts always come to mind. And it's, it's kind of an overused example, but such an easy one where, yeah, if you had to cut up your own to roast them in the pan, that'd be difficult. But, um, you know, because of all the different formats that are now available, uh, it becomes a much easier sell, I would say, from a time perspective, for sure. And that's where I would argue too, that we're seeing vegetable dollars leak to the deli department. If you think about the ever growing set of deli solutions in those microwavable or air friable, um, if that is a word, dishes, uh, where, you know, there's like a steak, a baking potato and, and maybe a stuffed mushroom or asparagus or broccoli, whatever it might be. I've seen Asian lines where you have lo mein, but broccoli, um, so all of those dollars used to sit in the produce department, but they are now dispersing throughout the store a little bit more.

Speaker A: That's a great point because. Yeah, what, what I, what I, when I think of our household, it's the most, the variety of vegetables, like things like the broccoli florets, those are coming from the produce department. The Bell peppers, things like that. But when we get sugar snap peas or, you know, bell peppers already cut up, or mushrooms or stuff like that, it's generally because it's part of a stir fry meal kit or it's the Brussels sprouts that have already been cut up and seasoned and they're in the thing ready to go into the oven or. And the good thing is now, you know, from the permanent department, you got to figure out, um, can we, you know, can we do things with our suppliers where some of this we still get credit within the produce department or, you know, we talk about total store sales is the measurement that everybody gets rewarded on rather than, you know, siloed. But that's a whole other conversation. But, um, yeah, oh man. On the veg side, anything that adds that convenience that, that cuts, cuts down haha. On that prep factor. Yeah, I think it's so, so huge. And I know a lot of suppliers have, you know, been trying to go that direction for a long time. But man, I hope retailers give, uh, because I, I would see some different kind of innovative vegetable things, even like the stalks of broccoli and cauliflower that were cut into these little tiny pieces. I'm sure I've shared this example before, but I would put them into the Hamburger Helper so that when the kids had the Hamburger Helper, like, they're actually eating tons of vegetables, which was amazing. And then that product went away and I was like, those were our vegetables.

Speaker B: You know, my hidden veggies are now gone now. I think you're absolutely right. It is about convenience. And on the other hand, then we've talked about, uh, consumers wanting to prevent food waste. Well, we know that the minute you cut a piece of fruit or a vegetable, the shelf life is going to be less than the whole item. And that's something else to keep in mind. So with that message of convenience, we always need to focus on freshness, on quality. Um, oftentimes we buy things and we don't get around to preparing it that same day. So, uh, giving consumers, um, the shelf life, if you will. I always say in this day and age, shelf life belongs with the consumer as much as we can. Uh, a little easier to think about it through the lens of the meat department. Right. If you have two weeks on, on a ground beef package or a brick package, you know, try to move that as fast as you can so the consumer has most of that two weeks rather than it sitting in the store. And you know, we don't necessarily have due dates slapped on our produce. Uh, but it's the same exact, that uh, concept where the faster we can move it, the fresher the items are. That really becomes a point of differentiation when consumers are looking to reduce food waste while still wanting that value, uh, added item.

Speaker A: Well, and the, the dates on the product, because you're right, a lot of things obviously don't have that on it. But when you think about like if it's a bag salad or if it's those broccoli florets or different things, it is, it's an interesting deal because like, I'm sure there's something that drives you. You have to have it on there. Some kind of, uh, some kind of rule. But I've found myself if that, if that bag of broccoli florets has set there for a while and I might have forgotten about it. And then I look at the date and I think, ugh, okay, it says Best Buy. Does. How many days do I have from when it's Best Buy? Okay, it looks okay. Okay, it smells okay. But like we're five days past the Best Buy date. Is it still okay? Like the dates on things like that can sort of be a double edged sword a little bit because it's nice to have some clarity, but it doesn't feel like full clarity. And maybe I'm just, maybe I've missed some piece of education over the years. But, uh, I wonder if that, I wonder how that plays into things too. As far as the shelf life food waste conversation, you actually remind me of something.

Speaker B: Years ago I was in the UK marketplace and they had a big, big, big, uh, to do about the fact that they had moved, removed the Best Buy date from a bag of apples. And uh, they just said that that was a preventing food waste measure. Just because of the story you just told. Right. Because even if the apple, say, shrinks up a little bit, you can still use it in applesauce and apple pie. It's probably still safe to eat. It might just be a little mealy or what have you. But, uh, that was one of the measures that they took to say, why do we have uh, a Best Buy date on apples? And you know, I'm sure that is a, that in certain cases, like a bagged salad or something like that, it's absolutely necessary. Um, and I'm, um, sure the laws here in the US would be different in the UK as well. But, um, that is an interesting thing to talk about. Or for that matter, um, education, uh, on what do you do if, um, you know, your apple is not looking too hot anymore. Or grapes or anything like that. I remember years ago, somebody said, oh, if the grapes are going soft, getting a little bit old, throw them in the freezer. Frozen grapes are great. And that's what we do now. Rarely do grapes actually go old in our household. But yes, uh, it's little tricks like that that I think can really drive loyalty among consumers too.

Speaker A: Yeah. Well, I've even thought about certain. Not defects, but like as things age, like cauliflower.

Speaker B: Right.

Speaker A: Like when cauliflower starts to get a little brown. Like, at what point? Because I. And I end up googling. Right? Like if. And it says, you know, if it's not slimy and it doesn't smell funny, then you're probably fine. Right. But like, just. I don't know if there's even like a little. You just think about little bits of produce wisdom that are probably super common, but not necessarily with everybody. And it does end up being like these little hindrances or these little barriers to being like, all in and having that total confidence. Because I think a lot of people are not particularly confident when it comes to any number of different produce items. And so trying to get that information across, you know, in a way that resonates in a context that makes sense, um, there's just all kinds of opportunity there.

Speaker B: Oh, for sure, for sure. Especially again, as we think about that dollar moving from boomers to millennials.

Speaker A: Yep. Well, Anne Marie, I know we're almost, almost at time, but as you think about all the different departments of the store that you have investigated here in recent months, anything that we haven't talked about yet that you think we should be thinking about? Ooh.

Speaker B: Um, actually, yes. Texture. Oh. Um, if I look at what is growing in candy, it is that freeze dried candy. Uh, so you take an original peach ring, but it's free dried, and it becomes this big poofy thing, and it's just a completely different texture. You think about Dubai chocolate and you could say, well, that's a global thing, but it's also a very different texture. Then you think about the meat department and how people are talking about, oh, I make my steak in the air fryer now, because it makes it nice and clean, crispy. And then you think about produce and you think about which apples are trending from your honeycrisp to your cosmic crisp, and they have that bite to them. Same for grapes, for that matter. So, long story short, texture has become a really important thing. And that is all, again, driven by Gen Z and millennials, where a lot of the influencers will sit in their cars. I have no idea why they sit in their cars, but that's where they seem to be needing to try their foods. But this whole idea of texture and, um, just the way things look, interacting with the food, uh, that's a whole other level. And we have so many fun, different textures in the produce department. Um, but also, you know, think about an English cucumber and a regular cucumber. Like, is texture a way in which you can describe the difference and get somebody to buy, you know, whichever variety they don't normally buy? Um, so those. Those are fun things to think through, for sure.

Speaker A: Oh, that's very interesting. All right, I'm going to be thinking about the texture of my foods for the rest of the week.

Speaker B: Well, there you go. I need a report card.

Speaker A: Well, Emery, as always, I could talk to you all day long, but thank you so much for coming on. We'll thank our listeners as well, and we'll see everybody again next time on the first.