Organic Foods Boom: A Market Shift

🌱 Good afternoon, and welcome to today's fresh newsletter! 

👉 In today's email:

• U.S. Organic and Clean Label Food Market: Trends and Opportunities

• IFPA Honors Top Retail Innovators

• Washington State Pushes Forward in Legal Battle to Block Kroger-Albertsons Merger

• Dole Plc: A Global Leader in Fresh Produce, Sustainability, and Innovation

MARKET TRENDS AND INSIGHTS

U.S. Organic and Clean Label Food Market: Trends and Opportunities

The rise of organic and clean label food products is reshaping the U.S. consumer market as shoppers prioritize healthier options and seek greater transparency in their food choices.

Although a small percentage of the population consistently purchases organic or clean label foods, their influence on broader purchasing behaviors is substantial.

General consumers share similar views on food quality, safety, and health benefits, driving demand for organic and clean label options and leading to a willingness to pay premium prices for foods perceived as healthier, sustainable, and better for animal welfare.

A challenge lies in defining "clean label," which is not an official term but generally refers to products free from artificial ingredients, allergens, pesticides, hormones, and preservatives. It emphasizes the presence of wholesome, simple, and transparent characteristics.

Environmental sustainability, humanely raised animals, and company transparency are critical markers of clean label products, with consumer interpretation greatly influencing these perceptions through ingredient lists and nutritional panels.

The report notes an expanding availability of these products in neighborhoods and venues like convenience stores, raising awareness and boosting sales. As production adapts to demand, price adjustments may encourage more consumers to make regular purchases, contributing to market growth.

Foods categorized as "minimally processed," such as fresh produce, eggs, and fresh meat, appeal most to clean label consumers due to their simplicity and perceived healthfulness. Processed ingredients like butter, oils, and honey are generally accepted for home cooking, while ultra-processed foods (UPFs) face greater scrutiny.

However, some UPFs are deemed healthier if fortified with nutrients and balanced in fats and sugars.

A growing interest in plant-based alternatives is noted, even among those not seeking to eliminate animal products, with demand surging for plant milks and meat substitutes that fit the clean label image. The clean label movement is driven by health, nutrition, and an emotional experience, with nostalgia and ethical concerns prompting a preference for simple, wholesome foods.

Organic consumers seek assurances of stringent production standards and are proactive about their health, participating in cooking, flavor exploration, and staying informed on food trends.

Trust is pivotal, as distrust in "industrial food" drives consumers to local farmers’ markets and independent shops while still expecting mainstream retailers to offer alternatives to conventional products.

Convenient clean label foods, like snacks and heat-and-eat meals, are becoming more popular for their taste and convenience without artificial preservatives.

The primary markets for organic and clean label products include higher-income shoppers, younger consumers, and parents of small children, who are willing to invest in premium options and make informed choices for health.

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IFPA

IFPA Honors Top Retail Innovators with 2024 Retail Merchant Innovation Award

The International Fresh Produce Association (IFPA) has announced the winners of its Retail Merchant Innovation Award, honoring retail executives for their contributions to innovation in the produce sector.

Winners from five store-count categories will be celebrated at the Retail Awards Reception on October 18 at the Global Produce & Floral Show in Atlanta.

Joe Watson, IFPA Vice President, praised the winners for enhancing retail strategies and promoting produce consumption. The awardees represent a range of store sizes and have made significant contributions through innovative marketing, sustainability, and support for local agriculture.

The winners include:

Price Mabry, Corner Market (1-50 Stores): Recognized for his marketing influence and multiple industry accolades, including the 40 Under 40 list by Produce Business Magazine.

Joe Hansen, Wegmans (51-150 Stores): With 41 years in produce, Hansen has transformed Wegmans' marketing by focusing on berries and using digital platforms to engage customers.

Mike Emery, Hannaford Supermarket (151-250 Stores): Known for leading merchandising strategies and fostering innovation, Emery's customer-centric approach has boosted Hannaford's market share.

Ron Lovelace, Meijer, Inc. (251-399 Stores): A pioneer in sustainable practices, Lovelace successfully introduced compostable packaging for fresh produce, driving traffic and sales.

Meghan Diaz, Sprouts Farmer’s Market (400+ Stores): Diaz’s transparent leadership supports local agriculture, with notable programs like promoting Florida-grown passion fruit.

Watson commended these leaders for their creativity and dedication, setting new standards in produce marketing.

The IFPA, the largest global association for the fresh produce and floral supply chain, aims to drive growth and advocacy in the industry. This award emphasizes the impact of retail leaders' innovative strategies on produce marketing and consumer experience.

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💸 Strategies for driving holiday season produce sales | ThePacker.com

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🗣️ “Consumers aren’t as obsessed with low prices of bananas as retailers are” | FreshPlaza.com

🌻 Fall into success: Five great ideas for marketing floral businesses | TheProduceNews.com

🥒 Organic Veggie Storage Ideas | TikTok.com

KROGER-ALBERTSONS MERGER

Washington State Pushes Forward in Legal Battle to Block Kroger-Albertsons Merger

The $24.6 billion Kroger-Albertsons merger is under legal scrutiny, with a key case by the Federal Trade Commission (FTC) and nine attorneys general, and a separate lawsuit from Washington state.

The FTC’s case in a Portland court, alleging the merger will harm competition and consumers, awaits a ruling.

Meanwhile, Washington Attorney General Bob Ferguson has filed a state lawsuit claiming the merger would violate Washington's antitrust laws by reducing competition and raising prices, noting that Kroger and Albertsons operate over 300 stores in the state.

During Washington's case, Ferguson argued that Kroger and Albertsons don’t need to merge to compete against larger retailers like Amazon and Walmart, as they are already successful. In contrast, Kroger’s legal team contends that the merger is necessary to combat competitive threats from major retailers.

To address antitrust concerns, Kroger and Albertsons plan to divest 579 stores to C&S Wholesale Grocers.

However, critics doubt C&S’s ability to manage these stores due to its financial struggles, prompting Kroger and Albertsons to announce that Albertsons COO Susan Morris would join C&S as president and CEO of retail if the merger proceeds.

Beyond Washington and Oregon, a Colorado lawsuit accuses Kroger and Albertsons of antitrust violations related to no-poach agreements during a 2022 labor strike.

The outcome of these lawsuits will determine the future of the merger, as legal challenges from states, labor unions, and consumer advocates intensify the debate over market competition and corporate consolidation.

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INDUSTRY SPOTLIGHT

Dole Plc: A Global Leader in Fresh Produce, Sustainability, and Innovation

Dole Plc, an Irish-American agricultural multinational corporation headquartered in Dublin, Ireland, stands as one of the world’s largest producers of fruit and vegetables.

With a workforce of 37,400 full-time and seasonal employees, the company supplies approximately 300 products across 30 countries.

Dole operates through four primary segments: Fresh Fruit, which includes bananas and pineapples and accounted for about 35% of its 2020 revenues; Diversified Fresh Produce in Europe, the Middle East, and Africa; Diversified Fresh Produce in the Americas and other world regions, which together contributed 37% of 2020 revenues; and Fresh Vegetables, responsible for 29% of 2020 revenues.

The company’s product range encompasses bananas, pineapples, grapes, berries, deciduous and citrus fruits, and vegetable salads.

Dole’s history traces back to the mid-19th century, rooted in the foundations of Castle & Cooke in 1851 and Charles McCann’s Fish, Fruit and Vegetable Market in Ireland during the 1850s.

Castle & Cooke, established in Hawaii by Amos Starr Cooke and Samuel Northrup Castle, began as a sugar and logistics company.

In 1899, James Drummond Dole, a cousin of Sanford B. Dole—the governor of Hawaii who played a role in the overthrow of the Kingdom of Hawaii—moved to Hawaii and, two years later, founded the Hawaiian Pineapple Company (HPC).

The HPC made significant strides in the early 20th century, delivering its first shipment of canned pineapple in 1903 and pioneering technological advancements like the Ginaca Machine in 1911, which revolutionized pineapple canning.

In 1922, James Dole purchased the Hawaiian island of Lanai, transforming it into the world’s largest pineapple plantation.

That same year, Castle & Cooke acquired a 33% stake in the HPC through a lease agreement. By the end of the 1920s, the company was responsible for growing more than 75% of all pineapples globally.

Parallel to these developments, the tropical fruit trade was burgeoning in Central and South America. The Standard Fruit and Steamship Company, established in 1906 by the Vaccaro brothers and Salvador D’Antoni, became a significant player in the banana trade.

The company, which had been shipping tropical fruits since 1899, rapidly expanded, building infrastructure such as rail and telephone lines at its plantations.

In the 1920s, facing the devastation of the Gros Michel banana by Panama disease, Standard Fruit transitioned to cultivating the Cavendish banana, eventually becoming the largest banana producer in the world by the 1960s. In 1968, Standard Fruit merged with Castle & Cooke.

Meanwhile, in Ireland, the McCann family expanded their operations by opening a store in Dundalk in 1902. In the 1950s, they began consolidating with other companies, forming United Fruit Importers and later Fruit Importers of Ireland, which became publicly traded. This entity eventually evolved into Total Produce.

In 1985, billionaire David H. Murdock purchased Castle & Cooke, and in 1996, he split off Dole into its own company.

Despite financial struggles in the early 2000s that nearly led to bankruptcy, Murdock rescued Dole and took it private in 2003. The company faced various challenges, including lawsuits related to pesticide use, but continued to grow and adapt.

Total Produce, spun off from Fyffes in 2006 as a fresh fruit and vegetable business, expanded its reach across Europe, becoming one of the largest produce companies on the continent.

In 2018, Total Produce purchased a 45% stake in Dole Food Company, and in 2021, the two companies merged to form Dole Plc. The newly formed entity began trading on the New York Stock Exchange in July 2021.

Today, Dole plc operates on five continents, boasting 162 distribution and manufacturing hubs, 75 packhouses, 12 cold storage facilities, 5 salad processing plants, 11 vessels, and 114,000 owned acres of production.

The company’s vertically integrated supply chain extends globally, allowing it to grow, source, and supply a complete portfolio of the finest fresh fruits and vegetables. Dole’s products range from the familiar to the exotic and include extensive organic and value-added fresh-cut ranges.

At the helm of Dole plc is CEO Rory Byrne, with Carl McCann serving as chairman and Johan Lindén as chief operating officer.

Following the merger with Total Produce, Dole plc maintains its world headquarters in Dublin, Ireland, and its U.S. headquarters in Charlotte, North Carolina.

Dole’s commitment to quality is deeply ingrained in its operations. The company’s mission is to make the world a healthier, more sustainable place.

This mission is reflected in its dedication to delivering high-quality, farm-fresh foods and its efforts to innovate and bring products from around the world to consumers’ tables at the peak of freshness and taste.

Dole emphasizes responsible farming practices, sustainability, and empowering consumers to experience healthy living.

The company’s values focus on being grounded, collaborative, innovative, passionate, and responsible. Dole cares about the planet, produce, partnerships, prosperity, communities, people, and health and nutrition.

These priorities are pursued under categories like “For Nature,” “For People,” and “For Food,” detailed in their sustainability initiatives.

Dole plc leverages its global reach and resources, complemented by on-the-ground presence in key markets, to assure best agronomic and sustainable practices from field to fork.

This approach allows the company to offer bespoke products and services, delivering a point of difference to customers and a competitive advantage in the marketplace.

Innovation plays a critical role in Dole’s operations. The company integrates innovative processes and products across its global operations, from new varieties and technologies on farms to packaging and promotional innovations in the marketplace.

Dole believes that such innovation is essential in driving consumption of fresh produce and meeting contemporary consumer demands for healthy, convenient snacks and meal solutions.

The DOLE® brand, built on a promise of consistent excellence, is recognized and trusted by consumers worldwide. It symbolizes the best agronomic and sustainable practices and holds a special place in the hearts of consumers, particularly in the United States, where it is the most recognized brand of fresh produce.

Dole’s extensive infrastructure and global reach allow it to deliver both the best produce from around the world and the finest home-grown fruits and vegetables.

The company operates with approximately 37,400 employees across 30 countries, bringing global perspectives and local expertise to its business. This combination of global reach and local resources is difficult to replicate and represents an important point of difference for Dole plc in the marketplace.

The company’s financials reflect its significant position in the industry, with 2022 revenues of $9.2 billion, adjusted EBITDA of $338 million, and total assets of $4.6 billion.

Dole holds the number one position for bananas in North America and is a leading player in several other fresh produce categories globally.

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TIP OF THE DAY

Offer Subscription Boxes To Keep Customers Coming Back

Have you considered offering subscription boxes to keep customers coming back for fresh produce regularly?

A subscription box service allows your customers to receive a curated selection of your freshest produce delivered right to their doorsteps, making it easier for them to consistently access and enjoy your products.

Promote the subscription service through your newsletters and social media, highlighting the convenience and benefits—like seasonal variety, hand-picked quality, and potential savings compared to buying produce individually.

Offer different box sizes or themes, such as "Family Favorites," "Organic Selections," or "Chef’s Picks," catering to various customer needs and preferences.

By providing a hassle-free way for customers to enjoy fresh produce regularly, you not only secure steady sales but also build customer loyalty through the convenience of your subscription model.