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Convenient produce options pop

Thinkstock baby carrots snackable produce
Finding new ways to blend the snacking and fresh food trends could further bolster natural retail stores' already strong produce departments.

Consumer taste for healthy, on-the-go snacks is driving growth in "snackable" produce, like individual servings of fruits packaged with dips, cheeses or nuts, according to new data from Nielsen.

Packaged snack items merchandised in the produce section account for $1.1 billion in annual retail sales, with a growth rate of more than 10 percent each year between 2012 and 2016, Nielsen says. That includes fruit cups, snacking fruit (grapes, cherries, apples, baby carrots), fresh smoothies, snacking vegetables and dried fruit and nut snack mixes. While more brands are innovating in this space—like Bonafide Provisions with its Drinkable Veggies and Horizon Organic with its Snack & Go packs—Nielsen notes that private label and unbranded items are particularly underrepresented here, which opens up an opportunity for retailers to create products in-house.

Indeed, the produce section is critically important to natural retailers, as conventional grocers expand their special diet and better-for-you center-store options and online grocery sales show particular strength in packaged food categories. Shoring up fresh and convenience items in the outer sections of the store could be a key differentiator.

In the natural channel, sales of produce grew 17.7 percent to $276 million in the 52 weeks ending April 21, 2017, according to SPINS—almost double the amount of produce growth in conventional grocery stores during the same period.

Organic produce also posted an 8.4 percent growth rate in 2016, according to the Organic Trade Association, with grab-and-go salads and ready-to-eat veggies (fresh or frozen) as top sellers.

FMI’s annual Power of Produce Report for 2017 also notes robust growth of value-added produce, adding that such items are positioned for further growth through increasing household penetration and purchase frequency.

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