Last year’s record Northwest sweet cherry crop of more than 23 million boxes is proof that consumers are ready for more cherries, says a representative of Nielsen Perishables Group.
In the last two decades, the volume of Northwest cherries has been on an upward trajectory. The growth trend reflects increased plantings and new orchard systems with dwarfing rootstocks and densely planted trees.
The most recent census from the U.S. Department of Agriculture estimated that the West Coast states of Washington, Oregon, and California had more than 85,000 acres producing sweet cherries. (Related story: Bigger crops are coming for cherries)
The rapid increase in West Coast cherry acreage has also spurred investment in millions of dollars of new sorting technology at West Coast cherry packing facilities.
Accompanying the trend has been a nagging fear that volume will exceed demand and deflate the cherry balloon, but last year’s impressive crop movement and strong retail sales of Northwest cherries should quiet any naysayers.
“With the help of last year’s record volume crop, 45 million extra pounds of cherries were sold last year between late June to mid-August compared to the previous year,” said Chris Balzer, associate client director for the Chicago-based Nielsen Perishables Group.
Cherries accounted for 1.3 percent of produce dollar sales for the year ending October 2014.
“That’s a great story,” Balzer told growers attending the annual Cherry Institute meeting in Yakima, Washington. “The strong volume suggests that demand has not reached a plateau. It shows that consumers are ready for more cherries.”
Balzer has worked with fresh produce commodities for more than eight years, first for the Perishables Group and now for Nielsen, which acquired the Perishables Group three years ago. In the produce arena, Nielsen tracks what consumers are buying in 18,000 stores across the country and analyzes buying habits and consumer interaction in the market.
Cherries did great last year, he says, but can the momentum continue?
Balzer believes that by better understanding consumers—their needs and values—the cherry industry can reach even more customers in the future.
In looking at U.S. grocery store trends, Balzer said outstanding growth is occurring in products located in the store’s perimeter in departments like produce, deli, bakery, salad, and breakfast bars.
But sales are flat in the dairy department and in core grocery food aisles.
“Companies with food items in the center aisles are trying to ‘freshify’ their products and ride the benefits of produce. That’s why you see new products like avocado-flavored ice cream, vegetable-infused baking mixes, and frozen veggie-blend puree for cooking.” Six of the top ten fastest growing fresh categories are from produce, he said.
This renaissance in produce has occurred from new packaged items, value-added produce (such as kale packaged specifically for making chips and bulk carrots packaged for juicing), new varieties, niche products, and specialty items.
“The consumer is always looking for new and different things,” he said. “Even within the apple category, there’s been significant growth from new varieties like Honeycrisp, Ambrosia, and Jazz.”
But he said the most significant impact of the produce renaissance is that all food retailers are getting in the game, wanting to carry fresh produce. Produce sales are growing in places like super centers, dollar stores, convenience stores, and club stores. Even food service is grabbing some of the produce action—Balzer used the example of McDonald’s putting Clementine oranges in children’s Happy Meals.
He urged the Northwest cherry industry to think about getting cherries into other parts of the grocery store and build partnerships with other food categories. Data show sales correlations between cherries and stone fruit, melons, and corn—food items available in the same time frame that are located near cherry displays. “It doesn’t have to be competitive with those products. You could be building partnerships.”
He asked, “Is there a way to partner with yogurt, ice cream, and mustard?” Nielsen data show strong correlations between cherries and those three food items. “The benefit of partnering with those in other grocery store aisles is that it adds more touch points for cherries.”
Who buys cherries?
About 25 percent of the U.S. population—76 million people—buy cherries. Of those cherry consumers, some are loyal and health focused and buy all season, some are driven by low prices and promotions and buy at limited times and in limited amounts, and some buy only in the late season, unresponsive to price.
He believes the cherry industry needs to be more strategic in reaching the different segments of cherry consumers.
“You need to convert existing consumers to buy all season and purchase cherries for other reasons, like snacking or freezing.”
And what about the 75 percent of the population—244 million people—that don’t buy cherries? “They represent a huge opportunity,” said Balzer.
Non-cherry consumers tend to be families on a budget who prioritize convenience, he said. “Can you reach them with a smaller package size? Show cherries as a convenient snack or match them with specific meal occasions? Large produce suppliers have done well to do just that, promoting their products as mid-afternoon snacks.”
Consumers don’t shop the store for individual categories. “They shop across the aisles to fulfill their needs of convenience, quality, health, and new taste experience,” he said.
The cherry health connection has been a priority at Northwest Cherry Growers, and the group annually budgets $100,000 for health research.
Northwest Cherry Growers, in conjunction with California’s cherry industry, have supported cherry health research since 2008 and are hoping that a major research project to be initiated next year will document the association between cherry consumption and a decrease in high blood pressure, high blood sugar levels, and chronic inflammatory diseases. •