Market research conducted during the 2009 season on behalf of the Northwest Cherry Growers shows that cherries maintain the number-one retail produce spot during the month of July, with an average dollar per square foot contribution of $208, possibly the highest number that retailers see all year.
The Northwest Cherry Growers, the promotion arm for sweet cherry growers from Washington, Oregon, Idaho, Utah, and Montana, took advantage of last year’s large sweet cherry crop to collect data that will be useful in the coming years as production increases. NWCG collects annual category performance data, but took the opportunity last year to expand the type of market research and update a shelf-space study last conducted in 2002. NWCG spent $133,000 on the market research, which was conducted by The Perishables Group.
James Michael, promotion director for NWCG and the Washington State Fruit Commission, said that last year’s abundant crop gave them reason to see if consumer demographics had changed due to the larger volume of cherries available.
Overall, during the 17-week cherry season last summer, produce sales were down 2 percent, Michael said. But even during the tough summer, the cherry category increased its dollar-volume contribution to the produce department by 9 percent compared with the previous year.
“Since our last in-depth shelf-space study, cherries have increased their average shelf space by more than 600 percent nationwide,” Michael reported recently to the Fruit Commission board of directors. “That number itself is astonishing, yet cherries still have the second-smallest shelf space of the top ten summer produce items.”
While cherries generate the most sales per square foot in July, the berries category, which includes blueberries, strawberries, and cane berries, is a growing challenge to the cherry category. In other months, displays for berries average 44 square feet and generate $182 per square foot, compared to the season average for cherries of 21 square feet that generate $155.
“We continue to use the shelf-space research to remind retailers of the significant impact cherries have every year in the produce department,” Michael said. “The retailer message is that by increasing space given to cherries in July and August, produce managers can increase their sales.”
He pointed out that the shelf-space study also shows cherries to be the only produce item with strong correlation of increased space and increased sales volume for the months of July and August. “Some produce items actually lose money if you increase the shelf space.”
Results gleaned from the market-basket research show that cherries are an affordable luxury item. Shopping baskets containing red cherries have an average ring of $94 compared with baskets without cherries that ring up $66; baskets with Rainier cherries ring up even higher. Additionally, the market-basket research showed that picnic food items were likely to be in a cherry shopper’s basket. This information will be used to encourage retailers to cross-merchandise cherries with other picnic items and use cherries in picnic-themed promotions.
“A key finding was that we saw an increase of 75 percent in the market penetration or number of consumers buying cherries from past studies,” Michael said. “This was while cherries were averaging $2.82 per pound in July and $3.26 for the season average, proving that we can gain legions of new consumers while still maintaining a price that gives a healthy return to growers and the land. It’s a strong weapon against the 99-cents-per-pound mentality.”
A study of secondary cherry displays found that the extra attention was a valuable return on investment, creating additional shelf space and consumer sell-through. Although shippers and retailers have increased the use of secondary displays, Michael said they wanted to determine the dollar efficacy of secondary displays as an alternative to traditional in-store promotional activities.
In conjunction with a West Coast retailer and the Perishables Group, NWCG created a full color, high-resolution, branded display sleeve for wrapping around a stand-alone display that the retailer could set up quickly for use outside the produce department. The sleeves were tested within and outside the produce department.
The study found that the high-resolution, branded sleeves increased cherry sales significantly more than nonbranded secondary displays. Michael added that the results correlate with other research showing consumers shifting toward private labels. He believes that for cherry marketers coordinating secondary displays with retailers, it will be more effective to have some type of brand— Northwest cherries, private label, or the individual fruit marketer—on the display.
Overall, the Northwest Cherry Growers branded sleeve showed the greatest lift in store volume and dollars, Michael said, noting that the sleeve increased cherry volume by more than 13 percent and dollar volume by more than 22 percent. For Rainiers, the branded sleeve displays increased volume by nearly 40 percent and dollar sales by 31 percent.
“The branded sleeves increased attention to cherries, which we know are an impulse buy,” he said, adding that they will work this summer with retail partners to use secondary displays. “When displays are located near the checkout lines, they remind consumers in the last ten feet of the store to buy cherries.” Also, locations outside the produce department can reach younger consumers who are quickly in and out of stores.
Demographics compiled by the Nielsen Company helped the Perishables Group understand today’s cherry consumer. Historically, cherry consumers have been affluent, empty nesters. The new profile data shows a shift toward bustling families and the “millennial group” of people born between 1981 and 2000. “This is good news for our industry. The bustling family, with lots of mouths to feed, is sharing cherry eating with young kids and teaching them healthy eating habits. And, the millennial group is a powerful, up and coming demographic.
“Knowing who our customers are gives us opportunity to use marketing as efficiently and effectively as possible,” Michael said. “You’ve got to know who and where to target your efforts.”