Consumer Demand Trends and Issues in Quality and Safetyin Select US Food Retailers, % Change 2013 vs 2012 All FruitVeg* Freshcut Fruit Salads Fresh Cut Veg *Excludes other produce

1

Consumer Demand Trends and Issues in Quality and SafetyConsumer Demand Trends and Issues in Quality and Safety

DR. ROBERTA COOKDept. of Ag and Resource Economics

University of California Davisfor

UCD Postharvest Technology Short Course

June 20, 2014

Fresh Produce Consumption Trends

2

4.88.8 6.7

10.2

22.118.2

0.22.4 3.8

11.2

17.814.2

Weekly $ sales/store

Weekly quantity sold/store Organic Fruit Organic

Veg

Fresh-cut, Organic and Total Fruit and Vegetable Sales in Select US Food Retailers, % Change 2013 vs 2012

All FruitVeg*

FreshcutFruit Salads

Fresh Cut Veg

*Excludes other produce (such as salad dressings, toppings, etc.), which is 10% of produce dept sales dollars and 5% of quantity.

Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Consumer Behavior

• Higher income segments driving demand; their preferences lean to organic, convenience, flavor,local.

• 48 million people (nearly 1 in 7 Americans) were on food stamps (SNAP) in 2012 vs 17.3 million in 2000.

• For mainstream, positive consumer attitudes about wellness benefits of fresh produce not translating into purchases. Improved flavor might help.

• Perception that produce costs more and may be wasted. Better shelf-life might help.

3

Top 10 Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Product

Weekly $ Sales per

Store

PercentChange

vs. 2012

Weekly Vol. per Store

PercentChange

vs. 2012

AvgRetail Price

PercentChange

vs. 2012

Packaged Salad $3,286 6.7 1,235 3.8 $2.66 2.8Tomatoes $2,545 3.4 1,166 1.2 $2.18 2.2Potatoes $2,515 1.8 3,821 –2.3 $0.66 4.3Cooking Vegs $1,743 7.0 1,061 –0.8 $1.64 7.9Onions $1,564 6.5 1,581 –0.5 $0.99 7.1Peppers $1,352 3.9 623 3.9 $2.17 0.0Lettuce $1,334 5.5 724 –3.8 $1.84 9.8Carrots $913 0.9 549 1.7 $1.66 –0.7Mushrooms $826 1.2 346 0.7 $2.39 0.5Cucumbers $714 7.8 735 1.6 $0.97 6.1Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Top 10 Fruit Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Product

Weekly $ Sales per

Store

PercentChange

vs. 2012


PercentChange

vs. 2012

AvgRetail Price

PercentChange

vs. 2012

Berries $3,841 2.4 1,304 –4.0 $2.95 6.6Apples $3,072 6.5 1,915 2.4 $1.60 4.0Bananas $2,756 1.0 4,808 1.4 $0.57 –0.4Grapes $2,694 3.4 1,275 –0.8 $2.11 4.2Citrus $2,669 8.9 2,144 3.3 $1.25 5.4Melons $1,177 –1.4 2,037 –5.3 $0.58 4.2Avocados $1,071 11.7 1,036 10.3 $1.03 1.3Stone Fruit $965 5.9 571 5.1 $1.69 0.7Cherries $645 –7.8 181 –24.8 $3.57 22.6Specialty $541 11.5 537 1.3 $1.01 10.1Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

4

• More forces are in play to educate consumers about the benefits of fresh produce (MyPlate, salad bars in schools, PBH, govt and private efforts to increase awareness of the health benefits of fruits and veg, etc).

• Culinary Institute of America and Harvard School of Public Health Dept of Nutrition Initiative: Menus of Change, The Business of Healthy, Sustainable, Delicious Food Choices. This is designed to introduce more fresh produce on foodservice menus.

• In the meantime, let’s look at how important income is to produce consumption.

Distribution of U.S. Households by Income Level, Share of Total Fresh Produce Expenditures/Income Level & Ave. Fresh Produce Expenditures/Income Level, 2012

Source: Calculations byRoberta Cook from the FoodInstitute’s Demographics of Consumer Food Spending, 2014.

$478 14%

$254 8%

$409 17%

$339 13%

$ = Average fresh produce expenditures per income group

% = Percent of total fresh produce expenditures contributed by each income group

$819 31%<$15,000

15%

$15,000-$29,999

18%

$30,000-$49,999

20%

$50,000-$69,999

14%

$70,000-$99,999

14%

$100,000+19%

Share of Households

$594 18%

5

Factors affecting demand for fresh produce

• Commodity price, consumer income, prices of substitutes and complements, population growth rates, ethnicity, culture

• Quality: appearance, flavor, color, shape and size; more breeder emphasis on flavor

• Info on produce selection, ripening, recipes• Convenience in prep, usage and consumption;

packaging role• Shelf-life, postharvest technology • Consistent availability, year-round supply

Per Capita Consumption of Fruits and Vegetables, All Product Forms

• Changes in total consumption mask significant changes in:

• product form• product mix• diversity within product segments

6

0

50

100

150

200

250

300

350

400

45019

76

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

Processed Veg,Excl. Potatoes

ProcessedPotatoes

Fresh Potatoes

Fresh Veg, ExclMelon and Potato

Fresh includes fresh-cut and bulk.

Processed includes frozen, dried and canned.

Fresh includes fresh-cut and bulk.

Processed includes frozen, dried and canned.8136

Source: USDA/ERS, Vegetables and Melons Situation and Outlook Yearbook, May 30, 2014; compiled by Dr. Roberta Cook, UC Davis, fresh and processed sweet potato share of total sweet potatoes is estimated; processed vegetables includes lentils and dry peas, and excludes dry beans.

U.S. Per Capita Vegetable Utilization/Consumption,Excluding Melons, 1976-2013P, (all channels,

foodservice and retail), poundsPo

unds

per

cap

ita 380

343

145

119

U.S. Per Capita Consumption of Select Fresh Vegetables, 1985-2013P

(includes fresh-cut and bulk)

Pounds per capita P=Preliminary

Source: USDA/ERS, Vegetables and Pulses Yearbook May 30, 2014.

0

5

10

15

Carrots Bell pepper Broccoli Sweet corn Cucumber

7

Head Lettuce

Romaine

Leaf

05

101520253035

7.73.6

Lbs.

Per

Cap

ita

U.S. Per Capita Utilization/Consumption of Lettuce, by Type, 1985-2013P (includes fresh-cut and

bulk, foodservice and retail)

All-23.8

12.5

Source: USDA/ERS, Vegetables and Pulses Yearbook May 30, 2014 and unpublished ERS data for leaf and romaine.

Pounds per capita

P=PreliminarySources: USDA/ERS, Vegetables and Pulses Yearbook Data May 30, 2014.

0

5

10

15

20

25

US Per Capita Utilization/Consumption of Fresh Tomatoes (1985-2013P)

8

US Fresh Tomato Retail Market Shares (in Lbs) by Key Type, 2013: Story of Market Transformation

Source: FreshLook Marketing

Roma27%

TOV22%Grape

14%

Vine Ripe12%

GH9%

Field, excl vine ripe

7%

Mini, excl grape6%

Other3%

*Mainly mature green

Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, 2011.

0% 10% 20% 30% 40% 50% 60%

PerishabilityCost

SeasonalityLocation grown

Use of pesticidesAppearance

Preparation time neededFamily won't eat them

Unpredictable tasteGenetic modification

Fear of food safety outbreakHealth-related diet…

Do not know how to prepareNegative media attention

More FreshVegSame or LessFresh Veg

Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Vegetables

9

Fresh Noncitrus, Incl Melon

Fresh Citrus

Process Citrus

Process Noncitrus

0

50

100

150

200

250

300

350

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(frozen, dried and canned)

US Per Capita Total Fruit Disappearance/Consumption, Including Melons, Pounds

1976-2012, (all channels, foodservice and retail)Po

unds

per

cap

ita

28297

53

24108

282

7329

102

78

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 11-19-13.

Fresh includes fresh-cut and commodity.

U.S. Per Capita Consumption of Selected Fresh Fruit 1985-2012 (all have positive health messages, and all but kiwis have generic

promotion*)

Pounds per capita

*Kiwis slashed generic promotion in the late 90’s and were unable to sustain growth and capitalize on a positive health message.Source: Fruit and Tree Nuts

Yearbook, ERS/USDA, 11-17-2013

0

2

4

6

8

10

Blueberries Strawberries Kiwifruit Avocados

10

U.S. Per Capita Consumption/Utilization of Selected Fresh Fruit 1985-2012

pounds per capita

05

101520253035

Melon Orange Grape Banana AppleSource: Fruit and Tree Nuts Yearbook, ERS/USDA, 11-17-13

U.S. Per Capita Disappearance/Consumption of Melons, 1985-2012

(watermelons have generic promotion)

Pounds per capita

05

101520253035

Watermelon Cantaloupe Honeydew Others

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 11-17-13

11

U.S. Per Capita Consumption/Disappearance of Selected Fresh Fruit 1985-2012

pounds per capita

Source: Fruit and Tree Nuts Yearbook, ERS/USDA, 11-17-13

0

2

4

6

8

Mango Papaya Pear Pineapple Peach/Nect.

LIFESTYLEAffluent Modest

Cosmopolitan Suburban Comfortable Struggling Working Plain RuralBehavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume

Very High 150+

Start-up Families 143 219 101 29 41 11 108 9.30%HHs with young children only <6

Small Scale Families 130 205 90 26 37 9 97 8.90%Small HHs with older children 6+

Younger Bustling Families 120 199 82 27 36 8 86 5.90%Large HHs with children (6+), HOH <40

Older Bustling Families 147 223 106 33 46 10 127 13.90%Larger HHs with children (6+), HOH 40+

Young Transitionals 147 207 100 33 41 12 90 9.60%Any size HHs, no children, <35

Independent Singles 143 203 100 30 41 11 93 11.60%1 person HHs, no children, 35-64

Senior Singles 131 196 91 31 42 10 82 7.40%1 person HHs, no children, 65+

Established Couples 139 204 96 29 39 9 102 11.20%2+ person HHs, no children, 35-54

Empty Nest Couples 139 210 99 28 39 8 112 11.50%2+ person HHs, no children, 55-64

Senior Couples 132 202 91 28 38 8 97 10.80%2+ person HHs, no children, 65+

Total 139 208 96 30 40 9 100Percent Volume 20.80% 49.60% 17.20% 3.10% 8.00% 1.20%

High 120-150

Why Retailers Love Berry Consumers? They Spend Money

Source: Perishables Group FreshFacts® Powered by Nielsen.

Low 1-50

12

Plant Varieties and Flavor


13


Demographic Trends

14

Projected US Population

Source: www.census.gov

310.233 million 373.504 million

Black13%

Asian7% Other

2%

Non-Hisp. Whites57%

Hispanic23%

Black13% Asian

5%Other2%

Non-Hisp.

Whites66%

Hispanic16%

2010 2030

Fine Dining Chefs

Creation

Casual Theme Interpretation

Family DiningInterpretation

QSRInterpretation

Non-CommercialInterpretation

Incorporated into Consumer Meal Mix

Foodservice contributes to the evolution of food trendsand ethnicity leads the way, Authentic and Fusion,

benefiting fresh produce

Argentine

Brazilian Churrascaria

Peruvian

Oaxacan Szechwan

VietnameseThai

Taiwanese

Cambodian

Indonesian

15

Average Annual Household Fresh Produce Expenditures, by Ethnicity, (dollars), 2012

Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

261 270

409

164

307226 234

386

148

259

All White andOther

Asian Black Hispanic

Fresh Fruit Fresh Vegetables

Age and Generation Terms

• Matures = born before 1946

• Baby Boomers = born 1946-1964

• Gen X = born 1965-1980

• Gen Y = born 1981-1989

• Millenials = teenagers and 20s

Source: Lancaster and Stillman, When Generations Collide, 2002

16

Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

7%

16%

17%

20%

18%

12% 10%

4%

15%

19%

23%

18%

12%

8%$290

$445

$540 $577

$492 $502

$388

$0

$100

$200

$300

$400

$500

$600

$700

0%

5%

10%

15%

20%

25%

30%

Share ofHousehold byAge Group

Percent FreshProduceExpend by Age

FreshExpendituresby Age, $

Distribution of U.S. Households by Age Group and Fresh Produce Expenditures, 2012

Source: US Grocery Shopper Trends 2011, FMI

When shoppers plan for dinner (percent of shoppers)

All Shoppers Gen Y Gen X Boomers Matures

No plan 2 hours before dinner

Weekend 22 40 27 21 11Weekday 23 44 31 20 11

Not sure if eating in or out 2 hours before dinner

Weekend 15 28 20 13 9Weekday 12 18 15 11 6

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Changing Attitudes

Over the past decade, consumers have been redefining quality across virtually every food and beverage category

Yesterday Today Emerging

Scientific Organic, natural

Processed Fresh / less processed

Industrial Local, personal

Engineered Real, authentic

For personal health For personal wellnessFor community health

Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

18

Source: Hartman Salt, June 30, 2011

VEGETARIANS WITH BENEFITSEthical EaterA person who only or mostly eats food that meets certain ethical guidelines, particularly organically grown food and humanely raised meat, poultry and fish.

FlexitarianA person who eats a mostly vegetarian diet, but who is also willing to eat meat or fish occasionally.

NutritarianA person who chooses foods based on his or her micronutrient content.

PescetarianA person who supplements a vegetarian diet with fish.

Source: Hartman Salt, June 30, 2011

VEGETARIANS WITH BENEFITS

RawistA person who eats only unprocessed, unheated and uncooked food, especially organic fruits, nuts, vegetables and grains.

VegangelicalAn extremely zealous vegan who is eager to make other people believe in and convert to veganism.

VegivoreA person who craves or has a special fondness for vegetables.

VB6From the saying, "vegan before 6," a person who eats a vegan diet before 6:00 PM, and then whatever he or she wants after that.

19

U.S. Consumers Rank Key Factors Affecting Their Produce Purchase Decisions, Fall 2009 v. Fall 2008

Source: Lutz, Brand Performance and Produce, Produce Business, Jan. 2010.

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Fall 2009 Fall 2008

On a scale of 1-5 with 5 being most important.

“Sustainability” Trend from the Consumer Vantage Point – Hartman Research Results

• Most consumers have very limited understanding or usage of the concept of sustainability

• In general, food terms as used by the food industry are not understood: functional foods, IPM, food miles

• Sustainability is becoming an umbrella term for health, wellness, organics, environmental consciousness, fair trade, simple living, buying local, etc.

• Personal sustainability linked to environmental sustainability for some

20

Hartman Organizes the World of US Organic Consumers, 2010

18%46.5%

10.5%Source: Beyond Organic & Natural report, The Hartman Group, Inc. February 2010

25% don’t

purchase organics

Index of US Organic Fresh Produce Consumption by Spectra Lifestyle/Behavior Stage, 2010, All Channels

Source: Spectra BehaviorScape: Total Consumption/Spectra 2010 Jan/Homescan Product Library


Cosmopolitan Suburban Comfortable Struggling Working Plain RuralBehavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume

Very High 150+

Start-up Families 137 170 106 123 116 92 123 10.6%

HHs with young children only <6

Small Scale Families 118 131 79 73 90 76 93 8.7%

Small HHs with older children 6+

Younger Bustling Families 106 127 89 83 89 82 94 7.0%

Large HHs with children (6+), HOH <40

Older Bustling Families 87 117 87 68 78 82 90 9.8%

Larger HHs with children (6+), HOH 40+

Young Transitionals 115 137 81 78 85 75 93 9.9%

Any size HHs, no children, <35

Independent Singles 96 74 109 110 78 65 87 10.7%

1 person HHs, no children, 35-64

Senior Singles 86 68 72 71 78 70 74 6.8%

1 person HHs, no children, 65+

Established Couples 136 172 122 155 97 87 125 13.9%

2+ person HHs, no children, 35-54

Empty Nest Couples 164 146 131 85 117 90 124 12.2%

2+ person HHs, no children, 55-64

Senior Couples 119 135 88 74 99 74 97 10.6%

2+ person HHs, no children, 65+

Total 115 130 98 93 91 79 100

Percent Volume 15.3% 22.7% 17.8% 11.2% 16.0% 17.1%

High 120-150

21

US Consumer Reasons for Buying Organic Fresh Produce, 2011

•

Source: Fresh Trends 2011, Vance Publishing

69%

23%

20%

20%

11%

8%

7%

7%

6%

6%

6%

Too expensive

Can't tell if really organic

Only recently began purchasing organic

Not readily available

Don't really believe they're more nutritious

Don't really believe they're safer

Can't find brand(s) we like

Don't want to change from products we use

Don't stay fresh as long as nonorganics

Often do not look appealing

Certification requirements increasingly weak

Organic Users*: Reasons for Not Using More Organics

Source: Organics 2008 Report, Hartman Group

*Limited organic buyers (Primary HH shoppers who have purchased organic, but fewer than 4 product categories, in past 3 months) (n=537)

22

US Consumer Reasons for Buying Local Produce


96%

93%

89%

88%

87%

80%

69%

50%

46%

94%

89%

87%

84%

79%

59%

Freshness

Better taste

In season

Price

Confidence in food safety

Support for local community

Enviro-friendly

Connection to farmers

Organically grown

2011

2010NA

NA

NANA= not available

Definition of “Locally Grown” Products according to Shoppers, 2011

Source: US Grocery Shopper Trends 2011, FMI.

grown in my state

44%

grown within certain mile

radius41%

grown on family-owned farm13%

other2%

23

Maximum Distance a Food Item Can Travel from Source to Store to Be Called “Local”


25 miles or

less26%

26-50 miles28%

51-75 miles7%

76-100 miles26%

More than 100 miles13%

Food Safety Attitudes

24

How confident are you that the food in your supermarket is safe?

Source: FMI US Grocery Shopper Trends, various years

0.8474%

81% 85% 82%

66%

81%

89%

'96 '98 '00 '03 '05 '07 '09 '11

Completely or mostly confident

Source: US Grocery Shopper Trends 2011, FMI, 1,026 shoppers

Specific Areas of the Store and Supply Chain: “I trust the products sold there are safe”

Strongly Somewhat Somewhat StronglyAgree Agree Disagree Disagree

Fresh produce 58% 38% 3% 1%Over-counter meds. 58% 34% 2% 1%Grocery stores 54% 39% 5% 1%Fresh meat, poultry

& fish 53% 41% 3% 1%Prepared meals 41% 45% 6% 7%Pet food 37% 24% 4% 2%

25

Which food-related items constitute a serious health risk (according to US shoppers)?

Declining since 1992


US Consumer Confidence in the Safety of Fresh Produce by Source, 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Farmers' Market Supermarket Mass Retailer

Not confident at all

Mostly not confident

Neutral

Mostly confident

Very confident


26

Very, 5%

Somewhat, 44%

Not Very, 34%

Not at All, 16%

2010: How comfortable are you that food grown/produced outside the U.S.

is safe?

Source: U.S. Grocery Shopper Trends

2010, FMI.

Changes in consumer use of information technology influences marketing tactics and communication vehicles

– The fresh produce industry needs to find creative ways to communicate with consumers via cyber channels and social networks with the aim of being relevant:

– Value messaging– Cater – to health and wellness– Create – convenient and quality eating experiences

– Celebrate – cooking, preparation, social eating experiences, indulgence

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• Flavor is where it’s at!• Creative marketing and merchandising that communicates a product’s benefits to consumers

• Reaching consumers in multi-channels and utilizing mobile technology can stimulate purchases

Conclusions: Need for Shopper-Centrism

• Unmet potential for fresh produce demand expansion in foodservice channels, potentially convenience stores, dollar stores and pharmacies

• Consumption gains in some items are at the expense of others, we need to understand more about the role of substitutes and complements

• Firms need to better understand diverse consumer segments and their needs at the individual produce item level

• Consumer research is exploding due to the internet• Social media is making it much more cost-effective

and feasible to conduct micro marketing

Conclusions

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• Continuing reduction in the unemployment rate will help demand

• Changing public policy, industry-govt. partnerships like PBH, trade association and firm-level efforts may gain traction and change consumer behavior – not just attitudes; time will tell

• Tell your story, retailers will increasingly support you• To be healthy it must be safe, invest in food safety, don’t

risk relinquishing this positioning!• Consumer expectations growing for industry accountability,

making traceability, sustainability, social responsibility and food safety standards are ever more important

Conclusions

Supplemental Information

29

0%

20%

40%

60%

80%

'96

'98

'00

'03

'05

'07

'09

'11

Shoppers’ concern about nutritional content and evaluation of diet

39

67

Source: FMI Trends in the US Consumer Attitudes and the Supermarket, various years

very concerned about nutritional content

diet could be healthier


How often do shoppers use a store’s nutrition label guidance to determine which item to purchase?

Always7%

Frequently34%

Occasionally32%

Rarely20%

Never7%

30


Adoption of Social Media by Gender: Percent of Shoppers Using Various Social Networks

All Shoppers Men Women

Facebook 68 57 72

YouTube 26 30 24LinkedIn 12 13 12Twitter 12 15 10MySpace 9 11 8Blogs 8 10 7None 26 31 24


Adoption of Social Media by Marital Status: Percent of Shoppers Using Various Social Networks

All Shoppers Married Single

Facebook 68 64 72

YouTube 26 22 31LinkedIn 12 13 11Twitter 12 10 14MySpace 9 6 10Blogs 8 8 8None 26 30 23

31


Adoption of Social Media by Generation: Percent of Shoppers Using Various Social Networks

All Shoppers Millennials Gen X Boomers Matures

Facebook 68 97 83 62 48

YouTube 26 54 37 36 7

LinkedIn 12 9 27 9 2

Twitter 12 28 18 10 3

MySpace 9 12 12 9 3

Blogs 8 22 15 5 1None 26 2 10 29 49


Activities shoppers would undertake based on social networking recommendations

Try new restaurant 77%

Make new recipe 70%

Purchase new food 62%

Shop at new grocery store 56%

32


Tools to help US shoppers learn more about food must be offered in various formats

All Shoppers Millennials Matures

Percent of Shoppers Who Use

1. online/mobile recipes 93 89 73

2. paper recipes 91 95 87

3. recipes with sales specials 80 90 70

4. how to videos 54 64 40

5. cooking classes 43 65 25

6. online wine tips 41 54 25

7. in-store wine classes 32 48 13


US Consumer Sustainability Efforts, 2011

Sustainability is a macro trend that will continue to do well in the future but within limits. Green products must still befunctional, affordable and measure up to their conventional counterparts. Organic fresh produce a gateway category.

Behaviors requiring little sacrifice (reusing plastic grocery bags, recycling, reusable bags) will likely see continued growth.

• Recycling plastic rose from 62% in 2008 to 75% of shoppers in 2011.

• Paper recycling jumped from 63% to 74% of shoppers.

• Can recycling moved from 70% to 78% of shoppers.

33


US Shoppers with stronger environmental tendencies are:

• Women 66%

• Generation X, especially female X 71%

• High-income shoppers 72%

• Warehouse club store shoppers 72%

• Organic/specialty store shoppers 83%

• Highly concerned about nutrition 73%

• Highly concerned about food safety 72%

• Avid circular readers 73%

High produce consumers


Meal Preparation in US Households, 2011In households with two or more people:•Woman does all the cooking: 70%•Shared responsibility: 23%•Someone else does all the cooking: 6%.Shopper eating habits:•Home-cooked dinners: 5 days/week•Eating out: 1 day/week•Takeout/ordering in/drive through: 1 day/week.Shopper knowledge about preparing fresh produce:•Very knowledgeable: 44%•I manage, but I’m no expert: 44%•I need help: 9%.

34

Source: US Grocery Shopper Trends 2011, FMI. Survey of 2,048 shoppers.

Factors Associated with the Choice to Eat In or Dine Out, 2008 vs. 2011

Percent of Shoppers 2008 2011 Difference

Cooking DinnerTime 48 36 -12Price 12 31 +19Healthfulness 40 33 -7

Eat OutTime 30 28 -2Price 36 42 +6Healthfulness 34 30 -4


Level of comfort with foods from various sources (percent of shoppers) broken down by gender and generation

SourceVery

comfortableSomewhat

comfortable TotalTotalMen

TotalWomen

TotalMillennial

TotalMature

United States 64 33 97 97 97 96 97

Canada 48 44 92 95 91 94 93

Western Europe 17 45 63 69 59 89 49Latin and South America 12 51 63 76 58 65 51

India 6 27 34 43 29 59 14

China 6 24 30 36 28 50 13

35

Who should be responsible for ensuring that food is safe?

8%

12%

25%

32%

33%

55%

10%

10%

29%

27%

29%

51%

10%

9%

28%

28%

35%

58%

Farmers

Consumer groups

Food stores

Government institutions

Manufacturers / Processors

Myself as an individual

2011

2010

2009



Where shoppers believe most food safety problems are likely to occur (percent of shoppers surveyed)

2005 2006 2007 2008 2009 2010 2011

Food processing & manufacturing plants

30 32 45 53 57 50 54

Restaurants 20 18 11 9 8 11 10Distribution centers

11 10 9 9 9 11 8

Home 18 16 9 5 4 7 8On the farm 1 1 6 5 5 5 5During transportation

5 4 3 3 3 4 3

Grocery stores 5 9 3 4 3 2 3Not sure 10 9 1 12 9 11 9

36

Index of US Conventional Fresh Produce Consumption by Spectra Lifestyle/Behavior Stage, All Channels

Source: Spectra BehaviorScape: Total Consumption/Spectra 2007


Cosmopolitan Suburban Comfortable Struggling Working Plain RuralBehavior / Stage Centers Spreads Country Urban Cores Towns Living Total % $

Start-up Families 69 53 67 80 40 44 63 5.8%HHs with young children only <6

Small Scale Families 69 92 73 42 39 39 68 4.7%Small HHs with older children 6+

Younger Bustling Families 50 39 49 64 33 35 49 4.1%Large HHs with children (6+), HOH <40

Older Bustling Families 267 153 177 75 75 190 26.2%Larger HHs with children (6+), HOH 40+

Young Transitionals 71 29 69 77 36 46 61 6.6%Any size HHs, no children, <35

Independent Singles 198 92 135 66 51 67 125 16.0%1 person HHs, no children, 35-64

Senior Singles 45 51 58 35 34 38 44 3.4%1 person HHs, no children, 65+

Established Couples 141 91 129 105 55 61 109 12.3%2+ person HHs, no children, 35-54

Empty Nest Couples 87 132 101 47 44 56 96 9.2%2+ person HHs, no children, 55-64

Senior Couples 111 212 105 47 45 50 128 12.6%2+ person HHs, no children, 65+

Total 110 124 101 80 46 52 100

Percent Total $ 33.6% 37.3% 7.6% 16.0% 5.2% .4%

Very High 150+ High 120-150

154

Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Top 10 Organic Fruit Sales and Pricing in Select US Food Retailers, 2013 vs 2012

Organic Product

Weekly $ Sales per

Store

PercentChange

vs. 2012


PercentChange

vs. 2012

AvgRetail Price

PercentChange

vs. 2012

Berries $350 16.3 91 8.7 $3.83 6.9Apples $228 25.8 111 18.0 $2.06 6.6Bananas $102 28.0 122 26.7 $0.84 1.1Citrus $96 24.2 40 14.8 $2.37 8.2Grapes $73 20.9 25 17.4 $2.86 3.0Avocados $45 20.8 40 18.9 $1.13 1.6Stone Fruits $23 43.7 9 27.8 $2.58 12.4Specialty Fruits $23 46.0 17 18.5 $1.34 23.2Pears $21 12.7 10 2.3 $2.14 10.1Value-Added Fruit $10 35.3 3 33.0 $3.65 1.7

37

Top 10 Organic Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs. 2012

Packaged Salad $678 17.3 171 16.6 $3.97 0.6Carrots $206 12.5 107 9.4 $1.92 2.9Cooking Greens $152 40.4 54 32.7 $2.81 5.8Lettuce $145 9.3 43 3.7 $3.35 5.4Tomatoes $130 18.6 35 17.7 $3.69 0.7Onions $98 7.4 69 4.0 $1.41 3.3Cooking Veg $69 25.3 25 14.4 $2.78 9.6Celery $64 15.8 23 7.0 $2.76 8.2Potatoes $59 15.2 47 10.5 $1.25 4.2Value-Added Veg $39 25.1 12 22.6 $3.16 2.0Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

Organic Product

Weekly $ Sales per

Store

PercentChange

vs. 2012


PercentChange

vs. 2012

AvgRetail Price

PercentChange

vs. 2012

Private Label Sales of Key Fresh Produce Categories in US Supermarkets: Private Label Share of Total

Category Sales, (52 week year-ending Sept. 25, 2010)

Source: United Fresh Foundation Fresh Facts, 2011

48.2%

34.2%

20.5%

19.5%

16.3%

9.8%

7.6%

7.5%

6.2%

Prepared Fruit

Citrus

Potatoes

Pack. Salads

Carrots

Apples

Lettuce

Mushrooms

Prepared Veg

Millions

Note: Private label fresh produce sales are 10.4% of total fresh produce sales vs. 6.8% in 2005. In 2010 private label produce sales were

$3.1B in stores tracked by Nielsen.

38

Frequency of Purchase of Private Label Fresh Produce, 2011, (of the 67% of US consumers purchasing private label

fresh produce)


36%

56%

7%1%

Excellent

Good

Fair

Poor

Rating Private Brand Products at the Primary Store, 2011

Source: U.S. Grocery Shopper Trends 2011, FMI.

39

Reasons US Consumers Purchase Branded Fresh Produce, 2011


6%

8%

31%

44%

46%

57%

Packaging

Other

Trust

Coupons

Promotions

Consistency

USA Online Coupon Usage Grows

• More than 55.7 million Americans use online coupons, compared to 49 million in 2010, 25% of the population.

• Within the first six months of 2012, 28.1 million Americans have not used a Sunday newspaper as a source of couponing.

• Those who print coupons off the Internet have an average household income of $96,900, 20% more than the average household income.

•

• Digital coupon users make 23% more shopping trips and spend 50% more annually compared to the average shopper.

Source: Coupons.com

40

Importance of Local Fresh Produce to Consumers

17%4% 4%

15%

5% 6%

21%

19% 22%

27%

35%39%

21%38% 29%

2009 2010 2011

Very important

Fairly Important

Neutral

Fairly Unimportant

Not at allimportant

48%

73%69%

Source: PMA/Hartman, Identifying Consumer Trends in the Produce Category, 2011.

Importance of Local Fresh Produce at Restaurants

5% 4%7% 5%

33% 44%

33% 32%

22% 16%

2010 2011

Not at all important

Fairly Unimportant

Neutral

Fairly Important

Very important

55% 47%


41

Farmers’ Markets at Hospitals

Kaiser Permanente Farmers’ Market Program

49 markets nationally, started in 2001. As a result of coming to the market:

• 76% report having increased their intake of fruits & veg.

• 71% report consuming at least “a few more kinds” of fruits and veg.

• Working with Sysco to distribute “local” produce to their hospitals

42

Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Fruit


0% 10% 20% 30% 40% 50% 60%

PerishabilityCost

SeasonalityLocation grown

Use of pesticidesAppearance

Preparation time neededFamily won't eat them

Unpredictable tasteGenetic modification

Fear of food safety outbreakHealth-related diet restrictions

Do not know how to prepareNegative media attention

More FreshFruitSame or LessFresh Fruit


Why US consumers buy fresh vegetables, among those who report buying more vs. those who are not, 2010

0% 20% 40% 60% 80%

Eating healthier

Source of vitamins, minerals

Freshness

Cooking at home more

Low in calories

Convenient snacks

Reduce risk of disease

Reduce food expense

Tastes good

Eating less meat

Eating less processsed food

More FreshVegetables

Same orLess FreshVegetables

43

Older Generations Are More Concerned with Eating Fresh Foods

Source: The Hartman Group, Acumen, 2013

46% 45%

9%

Describes me well

Describes me somewhat

Doesn't describe me

7%

26%

67%

10%

46%

45%

10%

51%

38%

9%

52%

39%

Doesn't DescribeMe

Describes MeSomewhat

Describes Me Well

Silent Gen.

Baby Boomers

Gen X

Gen Y


Policies that US shoppers say they want from their produce providers, 2010

0% 10% 20% 30% 40% 50% 60% 70% 80%

Food safetyLess pesticides used

Only legal workersFair trade practices

Worker saftey programsSupport for local community

Reduced pollutionEco-friendly packaging

Energy conservationWater conservation

Smaller carbon footprintWorker benefits

Organic growing techniquesPublic education programs

Race and cultural diversityAlternative energy

All Shoppers

Farmers'MarketShoppers

44

64%

60%

59%

56%

55%

54%

No pesticides

No herbicides

No growth hormones

No artificial ingredients

No antibiotics

No GMOs

Distinctions Consumers Make between “Organic” and “Natural”

Source: The Hartman Group, 2013

46%

45%

49%

56%

45%

46%

Meaning of Organic Meaning of Natural


In the past 12 months, have you stopped purchasing any food product because of safety concerns?2006-2011

Percent Yes 2006 2007 2008 2009 2010 2011

All Shoppers 9% 38% 26% 31% 14% 12%

45

Source: FMI US Grocery Shopper Trends 2011

2006 to 2011: What food products did you stop purchasing in response to food safety concerns?

Peanut Products 74 - - 74 30 9Beef / Poultry 64 15 20 7 25 6Seafood 5 2 2 1 4 3Fruit / Veg – Net 8 84 34 32 23 39Spinach - 74 25 14 11 13Lettuce - 16 6 5 5 4Bagged Salad - 9 6 2 2 4Tomatoes - - - 16 2 3

Other 21 5 51 12 32 48

- =Not available

Percent “Yes” 2006 2007 2008 2009 2010 2011

US Consumers’ Primary Concerns about FFV Safety: Overall – concerns mentioned by anyone; and concerns of consumers who reported not being confident v. those confident or unsure about the safety of produce, 2011


23%

19%

13%

9%

8%

8%

5%

13%

30%

27%

10%

3%

6%

8%

9%

3%

22%

19%

13%

10%

9%

8%

5%

14%

Grower handling / sanitation

Routine pesticide use

Possible food safety outbreaks

Not knowing if food bought is subject of outbreak

Eating fresh produce raw

Time require to find outbreak source

Not knowing who grew the produce

No concerns about produce safety

Overall

Not Confident

Confident orUnsure

Documents

Consumer Demand Trends and Issues in Quality and Safetyin Select US Food Retailers, % Change 2013 vs 2012 All FruitVeg* Freshcut Fruit Salads Fresh Cut Veg *Excludes other produce