Protecting Profits for Your Top Three Produce Items

Scott Schuette
,
Former VP of Produce and Floral, Fresh Thyme Market
Scott Schuette
Former VP of Produce and Floral, Fresh Thyme Market

As any grocers’ most strategic department, building a delightful experience in fresh is pivotal. Every fresh department carries critical products that account for the highest dollar sales, sell the fastest, or make up the most tonnage sold in the store. And in most produce departments, fresh fruit wins customers’ hearts and wallets with bananas as the highest tonnage, avocados as the fastest seller, and berries as the biggest profit-driver. 

When it comes to these fruits, fresh departments need to make sure product stays stocked and fresh every day of the week, and that requires maximum attention from procurement teams, operations leadership, and store-level team members. Here’s how to make it happen:

Bananas: Creating customer loyalty with the highest-tonnage item in fresh

Care and handling, inventory management, and shrink control are key to keeping ripe (but not too ripe) bananas in stock. Here’s what store teams need to know about banana quality and the supply chain:

  • Make sure wholesalers are using the correct ripening cycle for bananas. Green bananas that are ripened at lower temperatures and for longer periods of time ripen more gradually, which results in better flavor and extended shelf life. Organizations that use quick-ripening techniques decrease the longevity of bananas, increasing losses for both retailers and shoppers.
  • Handle bananas carefully once they arrive at the store. Fresh teams should treat bananas like fragile eggs—don’t stack or crush them, merchandising the fruit one layer at a time and on a well-padded display. Keep all backstock well ventilated and cross-stacked to allow the natural ethylene gas to escape quickly.
  • Keeping bananas within the optimum temperature zone is a must. Bananas love consistent temperatures of 58 to 62 degrees Fahrenheit. So that means employees can’t set them in the freezer.

Avocados: Building basket size with a fast-selling customer favorite

The fastest seller in most fresh produce departments is the avocado, which has seen a three-fold increase in popularity since 2000. Similar to bananas, avocados have a ripening cycle that commands perfection. Here’s how to protect your customers’ favorite fruit and build basket size in the process:

  • Understand how avocados ripen to keep stores are stocked with the variety customers want. Displays need to include plenty of guacamole-ready soft fruits, as well as firmer options for slicing into salads and greener avocados for use in a couple days. 
  • Know how to handle avocados based on how they’re ripened. Pre-ripened, pre-conditioned, and green fruit avocados have unique requirements to help limit bruising and over-ripening. While stores that receive unripe, green avocados can keep more product in stock and build larger displays, those that sell pre-ripened avocados should allocate less space for displays due to a lower retail-level shelf life.
  • Leverage technology that maximizes sales potential and minimizes shrink. Meeting both financial and sustainability goals requires intuitive technology that suggests accurate replenishment quantities based on the characteristics, company goals, and current inventory of each specific item. Without data and AI, order writers may not be able to accurately gauge how much needs to be ordered on any given day, inevitably leading to stockouts or shrink.

Berries: Boosting profitability with the top sales driver in fresh

The winner for highest year-round sales dollars is berries. Coincidentally, berries are also one of the most perishable products fresh departments carry, leaving little room for error. Use these best practices to drive maximum sales while minimizing shrink too:

  • Ensure cold chain protection from farm to shelf. Fresh berries do best when stored between 36 and 40 degrees Fahrenheit. If delivery trucks, warehouse coolers, backroom storage coolers and sales floor displays aren’t holding temperature properly, valuable shelf-life is being lost every second.
  • Allocate proper space for each individual type of berry. A display that features strawberries, blueberries, raspberries, and blackberries should never have equal space given to each flavor. For example, strawberries being sold at normal seasonal retail prices will need larger space allocation than the slower-moving blackberry or raspberry.
  • Utilize tools that accurately forecast item-specific demand. Since berries have such a short shelf-life, leveraging an AI-driven ordering and inventory solution can help teams build truck-to-shelf orders and create forecasts that take display size, sales movement, and current stock into account when ordering.

Improvements to the banana, avocado, and berry categories will pay off in dividends

In the grocery industry, we often say: As your top performance categories go, so too goes the entire department. Bananas, avocados, and berries are featured as front page staples for weekly grocery ads, drawing customers into stores and setting the tone for their shopping experience. Research shows that customers stick around for freshness, with 65% saying they’d shop the store again when produce meets their standards.

Knowing which individual fresh produce categories are your top performers makes it easy to understand  what drives the department profit and loss up or down. And while most stores share bananas, avocados, and berries as the top categories, some regions or locations may vary. Overall, stores need to prioritize these three best practices for any top item or category:

  • Place truck-to-shelf orders that keep backstock at a minimum
  • Understand item-specific ripening characteristics and storage needs
  • Build displays based on each product’s perishability and sales levels

Better grocery store technology enables store teams to leverage best practices

Bananas, avocados, and berries are on almost every customer’s shopping list, and that makes these three categories worth investing in. Optimizing inventory, ordering, forecasting, and merchandising for these categories will boost profits and build customer loyalty that lasts. Grocery retailers that are ready to transition to better tech should turn to Afresh’s Fresh Operating System. It’s the only solution on the market today that helps grocers’ fresh departments stay stocked with the items customers want, no matter what tops their list.

Tired of seeing food waste rise while margins and profitability shrink? You need the Fresh Operating System. Request a demo today!

Scott Schuette is a retail veteran of more than 36 years and was most recently the vice president of produce and floral for Fresh Thyme Market. He has been named Produce Retailer of the Year, Specialty Food Retailer of the Year, and Retail Deli of the Year over the course of his decades of service to the fresh perishable industry.