Darren Seifer, industry adviser for consumer goods and foodservice with Circana, kicked off his GOPEX 2025 education session with a quick rundown of the state of the consumer.
Seifer said inflation has played a major role in the consumption of all goods.
“Grocery prices are, on average, 35% higher today than they were just in 2019,” he said. “When we look at how much prices are higher today versus just five short years ago, that’s the real pain that consumers are feeling right now.”
He said this pinch in the wallet causes consumers to cut back on discretionary spending — which means not adding additional impulse items. Seifer said that, in a Circana survey, those making more than $200,000 a year or more showed concerns about keeping spending in budget.
“If you consider that folks who have more disposable income than most other people are saying, ‘hey, budgeting grocery is a key challenge, you can just imagine how consumers earning less money than they do are feeling about their food budgets,” he said.
Seifer said this causes consumers to change their overall spending. One category with lower prices and higher spending, Seifer said, is travel. How travel relates to the produce industry is that these consumers want to spend money on experiences.
“How can we help consumers get that experience in the home to continue to drive consumption of your food?” Seifer asked.
Consumers continue to flock to home-sourced meals, he said, with about 86% of eating occasions sourced from home. While those consumers who make more than $200,000 a year have typically been a source of growth in foodservice visits, Seifer said that same category that showed concerns about shopping in budget have also reduced spending away from home.
“Even this group is saying, maybe it’s a better value for me to source more of my business home versus going out to restaurants the way that I used to,” he said.
Fast-casual restaurants are a bright spot in the foodservice category, with traffic growing 4% in 2024.
“They have more of an emphasis on being fresh, being customizable,” Seifer said. “This is also where I think produce shines in the food service world.”
Seifer cited perceived value as a huge driver for this growth.
In term of retail spend, mass retailers and club retailers have continued to see growth in consumers’ fruit and beverage dollars. Seifer said pure-play e-commerce — a company with products or services that are sold entirely online — is still a very small segment of fruit and beverage sales. He said many consumers are reluctant to shop for produce online, but he sees opportunity for the fresh produce industry in the future.
Another trend, Seifer said, is while basket size has remained relatively low, trips per buyer continue to grow. So, consumers are not making big “fill-up” trips to mitigate that spending.
“The challenge really is just getting the basket, making sure that you’re on the consumers’ mind,” he said. “It’s not going to just happen as naturally or organically as it did in the past. You need to work a little bit in order to make sure that they know that they need to put your products into the car to ensure that the consumption happens.”
Perishables has been performing well as a category in grocery sales, Seifer said. In fact, he said produce is the only fresh department to increase its share of sales in 2024. Fresh grapes, berries, avocados, onions, mandarins, tomatoes and deli salads all saw increases in sales in 2024.
And organic produce has shown a slight volume share increase. Seifer said organic produce nets the greatest dollar share among perishables, or around 12%.
“Consumers are seeing value in this even in today’s high-price environment,” he said. “So, we need to continue to harp on the things that drive this. We need to continue to tell consumers why is it better for us, why it is a good value to invest in these types of categories.”
Seifer said organic produce is a slight increase in cost, but not as extreme as other organic categories. Health benefits and healthfulness tend to be the main drivers in organic produce purchases, he said.
“We’re seeing that consumers are gravitating toward more premium and super premium products, which again, in this high-price environment, seems paradoxical,” he said.”
Seifer said organic fruits and vegetables are mostly consumed during the three main meals, with the largest share at dinner. He said other times of the day offer an opportunity to grow produce consumption, tapping in on consumers in interest in convenience. Organic vegetables tend to be consumed later in the day, and retailers have an opportunity to help increase morning consumption.
In terms of shopper demographics, Seifer said higher-income shoppers — those earning $100,000 to $149,000 annually and those earning $150,000 to $199,999 a year — purchase more organic produce.
Millennials, too, purchase more organic produce than baby boomers, Generation X and Generation Z. There’s a slight spike with Generation Alpha consumers. Seifer suspects that there is some carryover as Gen Alpha are the children of millennials.
“Millennials, organic produce or not, bucked a trend,” he said. “Generation after generation of boomers, Gen X, they were consuming fewer and fewer fresh produce items. But then millennials came along and reversed that trend and brought freshness back into the store.”
While Gen Z doesn’t appear to be as engaged with organic produce, Seifer said this is likely because the oldest of the generation are just entering the workforce in lower-paying jobs and the youngest of that generation are still in high school.
Social media is a tremendous tool to help boost consumption, Seifer said. Most millennials and Gen Z find inspiration to prepare and cook fresh produce through social media.
Cucumbers have been an unexpected social media star in the past year, with cucumber salad recipes driving sales. Seifer said some videos have reached 40 million views. This social media phenomenon showed huge growth in Gen Z shoppers.
“We just need to be part of that,” he said. “We need to make sure that we’re teaming up with influencers, becoming influencers ourselves, showing new and different ways that we could use the produce and make it delicious.”
Grapes, too, have experienced a similar bump due to viral TikTok recipes.
“Grapes are having a stellar year too,” Seifer said. “It’s because we’re seeing a lot of viral videos about how to make grapes more indulgent. Candy grapes is an example that we see.”
Seifer said retailers and the produce industry need to focus on consumers’ interest in preparing meals at home and capitalize on consumers’ interest in value.
“We need to show consumers that there’s quality in our products,” he said. “They can expect the same things in our products. We can make sure that they’re relevant to consumers and that we’re hitting against the different needs that consumers are expressing.”