Chilean Fresh Fruit Association Best Fruit Practices of Best Performing Retailers Berries, Grapes, Nectarines, Peaches and Plums

Chilean Fresh Fruit AssociationChilean Fresh Fruit AssociationBest Fruit Practices of Best Fruit Practices of

Best Performing RetailersBest Performing Retailers

Berries, Grapes, Nectarines, Peaches and PlumsBerries, Grapes, Nectarines, Peaches and Plums

Chilean Key Selling Season: January thru AprilGrapes, Berries, Nectarines, Peaches & Plums

Many options for retailers to maximize sales.

Key questions:

How many varieties of each category should you carry? When should you begin to sell Chilean Fresh Fruit? Should you combine different grape varieties in a single ad? Upsizing berries; is it the best way to increase sales? Stone fruit; should I promote all fruit together or run each one

in a separate ad? What is the best way to promote strawberries? By themselves

or with other berries?

• Uncovering the “High Performing Retailers” category merchandising techniques for Berry, Grape, Nectarines, Peaches and Plums.

• Quantifying their efforts & leverage the insights to improve sales of other retailers

• Discovery of best practices in each product category

High Performing Retailers: Sales gain vs YAGO Higher sales gain than CRMA

(grow in excess of other competing in-market retailers) Exceed Fair Share 2008 higher than in 2007 Benchmark category trend vs Total Produce

Objectives of StudyAnd how it was structured…

89.7%(All Other Produce)

DiscoveriesChilean Fresh Fruit - Jan-April Sales

Jan-April Dollar Share US Produce Dollars Chilean Fresh Fruit Assn Categories

10.3%(CFFA)

Grapes, Berries, Nectarines, Peaches & PlumsAll Other Produce

The data reveals that retailers who incorporate the following key elements in their go-to- market strategy had significantly better results than retailers who did not do any or only some of these tactics.

AssortmentExpand variety across each categoryUpsize berry packages especially

blueberries 18 oz unitPromote early in the seasonPromote multiple varieties at the

same timeFixed weight grape packages sell at

higher retails per pound than random weight products and growing faster than category

Pricing: Successful using hi/low or EDLP; following other best practices including promotions

Promotion: Chilean Fruit is price sensitive and customers buy more on promotion

Fresh Berry DollarsJan-April %CHG vs YAGO

BerriesOptimizing Jan-April Sales

21.6

11.4

HighPerformingRetailers

Total US

• High Performing Retailers outperformed Total US almost 2X NW Retailer Blackberries 6 oz +53% LA based retailer Raspberry 6oz +39% Mountain Retailer Blueberry 4.4 oz +41%

• Assortment included Strawberries, Blueberries, Raspberries and Blackberries

• Blueberries & Raspberries are driving the increases in pounds and dollars

• Upsize your berries… especially Blueberry 12 & 18oz & Strawberry 32oz

• Promotions Multiple berries simultaneously.

Combine Strawberries in promotional mix Early in Season promotions = best results Blueberries with Blackberries show

higher promotional response Promote your upsized packages with the

smaller packages for best impact

GrapesOptimizing Jan-April Sales

Thomp Ruby Globe

NE Retailer 14.0 3.0 31.0 SE Retailer 9.1 16.9 - Midwest Ret 6.1 8.5 -

Fresh Grape DollarsJan-April %CHG vs YAGO

TotalUS


High Performing Retailers posted double-digit gains. Total US declined.

• Select High Performing trends %CHG YAGO:

• Assortment/Variety expansive with Ruby, Thompson and Globe Begin selling Globes early Red and green seedless drive the grape

category sales with over 90% of sales Alternate red, green, and black varieties

promotions to highlight the varietals differences

• Display selected varieties to create consumer awareness and excitement

11.0

-3.5

AD

AD

Midwest RetailerGrape Dollars, Lbs & Price

1Wk Increments ending 03/27/08

Ruby

Natural Thompson Seedless

Pricing Best Practices Grapes are highly price elastic. Consumers react strongly to

retail pricing in terms of volume sold each week. Pricing of Ruby and Thompson was successful with two approaches;

• Everyday Pricing• High/Low Pricing

Similar line pricing across both Ruby and Thompson varieties during non-promoted periods.

Globe pricing and merchandising can be different from Ruby and Thompson

Merchandising Best Practices Primary Displays:

• Display allocation drives consumer planned and impulse purchases of grapes. Data suggest +25 linear feet of display area is ideal & can generate up to +63% percent more sales dollars per store.

• Quality and freshness are key to grape category sales. Product should not be stacked more than two layers high to maintain this key objective.

• Alternate red, green and black varieties for eye catching color breaks

Secondary displays• Provides additional category impulse sales.• Excellent way to highlight unique varieties or packs that

can be overlooked on primary display.



Promotional Best Practices Featured front page promotions generate approximately +70% percent increase in

sales and up to three times base volume increase. Even minimal price discounts achieve positive lift.

Alternating weekly ad activity between varieties Early promo activity = stronger category performance Ideal promotional frequency = 3 out of 4 weeks Implement Multiple pricing strategies such as 2/$3, 2/$4 Consider grape category theme

promotions such as a “Grape Extravaganza”, “Grape Spectacular”, “June in January” or “Chilean Fruit Basket” to generate customer excitement. Key components for a successful theme promotion include:

• Large promotional displays in high traffic areas • Single price point for all varieties.• Support after the theme event with a sub

feature ad to maintain store grape volume.Continue to build incremental grape sales.

• Mix up the promotional types of promotionssuch as main feature, sub feature, in store and theme events on a four week basis to create continuous customer excitement.

High Performing Retailers outperformed Total US 3X Southeast Retailer #1 +39.7% Southeast Retailer #2 +23.4% Northwest Retailer +34.7%

Assortment Best PracticesExpand nectarine variety across category to include

Yellow, White and Regular varietals Pricing Best Practices

Pricing was successful either using variable pricing format or consistent steady price format

Consistent retail pricing across each variety during seasonPromotional Best Practices

Promoting greater assortment throughout the season including “Yellow”, “White Flesh” and “Regular” significantly increased sales and tonnage.

Promote multiple varieties of each category at the same time

Chilean Fruit is price sensitive and customers buy more on promotion.

Promote early season generates stronger sales for season

Fresh Nectarine DollarsJan-April %CHG vs YAGO

NectarinesOptimizing Jan-April Sales

25.4

8.4


Total US

Fresh Peaches DollarsJan-April %CHG vs YAGO

PeachesOptimizing Jan-April Sales

27.9

5.6


Total US

High Performing Retailers outperformed Total US 4X Mid Atlantic Retailer +75.4% Southeast Retailer +44.1% Southeast Retailer #2 +24.9%California Retailer +21.6% Northeast Retailer +19.8%

Assortment Best PracticesExpand varieties to include full Yellow & WhiteEarly season sales coincide with strong results

Pricing Best PracticesPricing was successful using hi/low or consistent

everyday price Consistent retail pricing across each variety during

seasonPromotional Best Practices

Peaches are promotionally responsivePromote early in the seasonPromotional non-price events such as theme

promotions and expanded stores displays can significantly increase sales

Promote multiple varieties of category at the same timeChilean Fruit is price sensitive and customers buy more

on promotion.

PlumsOptimizing Jan-April Sales

Fresh Plums DollarsJan-April %CHG vs YAGO

-16.8

34.6

TotalUS


Assortment Best Practices Expand plum variety to include Black, Red,

Yellow & Pluots Red & Black varieties = majority of sales Early season sales coincide with strong

results

Pricing Best Practices Each variety can be priced independently. Pricing was successful using hi/low or

consistent everyday price Consistent retail pricing across each variety

during season

Promotional Best Practices Promote multiple varieties at the same time Non-price promos such as theme promotions

and expanded stores displays can significantly increase sales

Chilean Fruit is price sensitive and customers buy more on promotion.

Data suggest price promotion in one variety increases sales in other variety

Soft Fruits: Nectarines, Peaches & PlumsOptimizing Jan-April Sales

• Know your customer. While peaches are the best known by customers, nectarines are on par in terms of customers’ knowledge of variety and reflected in their sales. Tailor displays to regional preferences as well.

• Peaches and nectarines are the key category sales generators and the most apt to generate excitement among consumers.

• Contrast color and varietal differences. Alternate peach, plum & nectarine displays.• As lesser known sub segments become available such as plucots, white flesh peaches

or apricots add to the assortment to both enhance the department image as well as generate additional impulse sales.

Pricing Best Practices

Of the Chilean soft fruit category peaches and nectarines are the most price sensitive to the consumer and most likely to be compared to each other as far as retail price. Consumers will react both in terms of selecting one variety over the other as well as deciding whether to purchase the category in total.

By contrast plums are not near as price sensitive due in part to the lack of customer familiarity. Additionally due to the lower volumes there exists opportunities to price multiple varieties at a single price point which will yield additional incremental sales and trial.


Promotional Best Practices Variety is the spice of life. Multiple varieties drive more sales vs single variety promos. Consider promoting peaches and nectarines together to target the broadest range of

soft fruit users. Consider changing the promotional focus. Promote good health. Consumers are very

interested in the health benefits of soft fruit as well as information on how to select the best piece of fruit.

Explore multiple pricing strategies such as 2 lbs for $3 or 10 lbs for $10. During the winter season soft fruit is an excitement generator with the customer.

Consumers aren’t expecting to find this traditional summer time favorite. Mix up the promotional types such as main features, sub features in store or theme events to continually surprise the customer.

Theme promotions are a great avenue with soft separately such as “Soft Fruit Festival” or Tree-mendous Festival” or as part of a larger event grouping whether “June in January” or “The best from Chile”.

Consider a single price point on similar varieties. Return with a sub feature ad after the event to maintain

store soft fruit volume and build additional incremental sales.

A minimum of biweekly promotional frequencyeither a media promotion, temporary price actionor in store event yields maximum sales for the category. Impulse sales drive the majority of the consumer purchases for this category.


Display Best Practices Quality and fresh appealing soft fruit is key to driving customer impulse sales Limit handling and Keep out of the flavor “kill zone”. Rotate- identify the ripest fruit for customers. Mix colors, sizes and varieties to create an eye catching display. Display near such complementary commodities as grapes or berries as

impulse sales will increase for all categories. To grab the customer’s attention that something additional is happening on

the display add Chilean point of sale materials. According to the Point of Sale Institute a 22 percent increase in sales is generated when POS is utilized.

Providing the proper space allocation drives the additional impulse and planned purchases for this excitement generating category.

Since soft fruit is highly perishable; highly impulse driven and complementary to high traffic items as grapes and berries, display in a high volume area.

Soft Fruit Secondary Displays : Provides another opportunity to trigger

impulse sales with the consumer.

Information included herein is aimed at assisting retailers to maximize sales across Chilean Fresh Fruit from January thru April

Regional and economical differences require retailers to carefully consider merchandising techniques for their specific markets.

Good Luck! For further information, please contact:

Tom Carl Tjerandsen

[email protected]

670 West Napa Street Suite – D

Sonoma, CA 95476

(707) 938-8400 – office

(707) 938-8455 - office fax

(415) 999-6289 - cell

Documents

Chilean Fresh Fruit Association Best Fruit Practices of Best Performing Retailers Berries, Grapes, Nectarines, Peaches and Plums