October 15, 2021
A new investigation finds that more than half of consumers consider it important to buy specific brands in the fresh produce section compared to unbranded products, led by two-thirds of Millennials and Gen Z respondents who think so .
Foodmix Marketing Communications’ survey of over 1,000 regular food buyers further showed:
- Almost 60% admitted to “liking” a brand of fresh produce, however, they struggled to name a second brand that they had an emotional connection with;
- Sixty-eight percent would pay more for branded products.
The food marketing agency said brands with an established history generate trust and commitment that support strong trends towards healthy lifestyles and sustainability.
A 2017 Nielsen report showed that the share of branded products in U.S. grocery stores increased 7.7 percentage points between 2012 and 2016 to 38.5 percent. Brands were seen as the top product trends, including packaged salads, diced and sliced vegetables, and on-the-go snacks. Improved branding and information packaging have also contributed to increased health awareness.
“In the past, retailers stocked products with the look and feel of a farmers market,” Nielsen wrote in the report, according to Supermarket news. “However, as consistent quality and trust gain in importance among consumers, so too does the ability to offer branded products.”
A stronger brand image also attracts more attention. In his IPO filing this year, Dole cited an IPSOS 2020 study that showed Dole had 73 percent fresh fruit brand awareness, 42 percentage points higher than its closest competitor.
The downside of a strong push towards branded products is the squeeze on margins.
Grocers have kept product prices low throughout its history by stocking mostly unbranded products. Better marketing may not be necessary amid healthy eating trends. Even by developing product brands in-house, grocers would face packaging and marketing costs avoided in the past.
In January 2021, Robinson Fresh, one of the largest suppliers of products, started to offer fresh produce under its own name for the first time in 115 years of history. Michael Castagnetto, President, said: “As we extend our brand from behind the scenes to packaging, we continue our commitment to be the people our customers and consumers can count on to deliver the best products on the market. “
DISCUSSION QUESTIONS: Do you see more positives than negatives on product shelves that turn to brands, whether in-store or in third-party versions? Would more brands and packaging accelerate or undermine the trend towards healthy eating?
“If brands proliferate in cooler areas, the only thing retailers can compete on is service – don’t even think about trying to compete on price! “