Brands and retailers can capitalize on fresh foods’ demand by ensuring their pricing and promotional strategies align with consumer expectations, explained Joanna Parker, principal II, team lead, fresh foods, Circana.
"The fresh foods category has become a pivotal growth driver, surpassing many other categories in grocery,” she added.
Fresh foods is the fourth fastest dollar growth industry with a 1% growth in total retail dollars from 12 months ending in July 2024, below health and wellness, pet care and beauty, according to Circana data.
On the category level, beef “is No. 1 of all consumers buying categories across retail,” which sold more incremental dollars in 2024 than 2023, showing 8% dollar growth, reaching nearly $3 billion, Parker said. Further, fresh beef sold $12 billion since 2019 and meat department sales increased $104 billion since 2019.
Deli prepared meats increased 10% dollars from 12 months ending in July 2024, placing 15th of all “dollar generating food,” as consumers increasingly seek convenient and ready-to-eat meal solutions, she added. Overall, deli prepared foods account for 60% of dollar share for total grocery spend and 61% of all deli units sold – and notably the category is outpacing meat and cheese, which account for 10.3% and 14.5% of dollar share in the same time period, respectively.
Fresh fruit grows thanks to increased access for SNAP recipients
Fresh fruits also performed well, driven by their convenience and increasing accessibility through programs like the Supplemental Nutrition Assistance Program (SNAP). This has contributed to a 5% growth in dollar sales, surpassing $1.5 billion, along with a 3% increase in unit sales from July 2023 to July 2024
Pounds of berries sold grew 29% since 2019, and melons, grapes and cucumbers also grew significantly due to social media trends, Parker said.
Pricing strategies for fresh food retailers
Retailers embracing innovation and leverage data-driven insights can quickly adapt to shifting consumer preferences, as reported previously by FoodNavigator-USA. A focus on value, convenience and quality will help retailers capitalize on the growing demand for fresh foods while maintaining customer loyalty.
Investing in a robust e-commerce strategy, like seamless e-grocery platforms with efficient delivery systems and digital nutrition services also will help meet the growing demand for online grocery shopping, as reported previously by FoodNavigator-USA.
