The reality that inflation has hit all sectors of the supermarket including the produce department is a surprise to no one. Separate questions are how persistent the inflationary trends have been, and what is the impact on volume as consumers grapple with higher prices.
To answer these questions, Category Partners accessed four years of Nielsen IQ produce department data. We examined trends in the total produce department, total fruit, total vegetables and the top 10 produce categories for both conventional and organic produce. For comparison purposes, we pulled the most recent 52 weeks of data through April 25, 2023. We then pulled identical data for the 52 weeks through April 25, 2020. This four-year span then provides a glimpse at the persistence of inflationary trends as well as potential impacts on volume.
As the chart below shows, across four years up to April 25, 2023, cumulative inflation has added over 20% to the price of produce. Fruit inflation has been slightly higher, exceeding 22%, while inflation in vegetables was slightly lower at about 19%. So, the reality is consumers are paying in excess of 20% more for the same fruits and vegetables than they were in the 2019-20 period.
Looking at the inflation on an annual basis, we can see that price increases across the four-year period have been both persistent and relatively consistent. The chart below shows that in 2019, the average fruit sold for $1.42 per pound while vegetables averaged slightly below $1.70. Those prices increased steadily every year. In 2023, calendar year to date, average fruit pricing is now just under $1.90, while vegetables have jumped to over $2.00.
The important question is how is this pricing impacting consumer purchase behavior across top categories and for conventional and organic produce? To understand this question, we pulled data for the top 10 produce categories for conventional and organics. We then compared pricing and performance for the 52 weeks through April 25, 2023, to the same 52-week period ending in April 2020.
The data suggests that pricing increases have had a significant impact on conventional produce volume. Within the top 10 categories, six had price increases of 20% or higher. The smallest price increase was in grapes which show a 9.5% price increase. In looking at volume, five of these top 10 categories actually declined in volume across the four-year period. Mandarins showed the largest volume decline. However, this is likely reflecting a short mandarin crop through the 2023 selling season. But the broader trend of small increases or actual declines in volume in the top 10 categories certainly indicates consumers are feeling the impact of higher pricing, and they are being cautious with purchases.
The volume trends appear a bit better for organic produce. Again, looking across the four-year period for the top 10 categories, price increase percentages were generally smaller than for conventional produce. The price increase percentages in eight of the top 10 organic categories were below the conventional products. In addition, organic volume percentage increases across this period were above conventional in eight of ten categories. In fact, only organic apple and watermelon volume dropped over the four-year period. All other organic categories increased.
With inflation in the U.S. now down significantly from its peak last year but still running relatively high, it seems likely that these long-term inflation trends in produce will persist.
• This report was compiled and developed by Category Partners, a strategic insights company focusing on fresh food, utilizing data exclusively provided by Nielsen IQ.