Where the subject may be perishable
but the insight isn’t.

Pundit’s Pulse Of The Industry:
Bigg’s Marvin Lyons

Jim Prevor's Perishable Pundit, November 9, 2006

Received a call from Bruce McEvoy, Director of Global Affairs for Seald Sweet. Bruce and the Pundit were the lone American members of the trade down at the AllFresh Conference in South Africa.

Bruce was interested in knowing about how sales at retail are progressing on spinach, bagged salads and other items in light of the food safety issues the industry has been facing. In response, we are going to run a series, starting here, of Pundit Pulses. These are interviews conducted by Pundit investigator and Special Projects Editor, Mira Slott, focused on exactly this issue.

The first one is with Marvin Lyons, produce director, of the Bigg’s division of Supervalu:

Q: How are sales of produce items holding up in light of the food safety scares?

A: Bagged salads have been down 15 to 20 percent since the spinach scare. That whole category really concerns me. Sales have been rough, but the trend is reversing and they are finally starting to pick up again.

We are seeing sales coming back slowly in bagged spinach. Consumer confidence is getting better, and we’re experiencing continuing improvement since we reintroduced it. We just got bagged baby spinach in last week, and ended up having out-of-stocks because we didn’t know how well it was going to sell. We had to adjust our inventory.

In the bagged spinach category, we only got back three SKUs out of the eight we used to carry. Right now we’re carrying Farm Fresh regular flat leaf spinach, Popeye spinach, and Popeye baby spinach because Dole is not producing yet, but we expect Dole back any time now. And we’re supposed to get some Earthbound organic baby spinach in this week. We used to carry both the 5-ounce and 11-ounce packages.

Q: Have you done any special promotions or merchandising to jump start business again?

A: We put up big signage reintroducing Farm Fresh bagged spinach and ran a front page ad with an article telling consumers it was determined safe by FDA, and we talked about it being safe. We also displayed an informational 22-inch by 28-inch poster on a floor stand, as well as posting a sign in the bagged spinach section. We felt it important to promote it and reassure customers, although some retailers chose not to do anything.

Q: You’ve focused your discussion on bagged spinach. What about bulk product?

A: We have bulk spinach back, coming off the east coast now, but that’s off probably 75 percent. It’s performing worse than bagged spinach. It just doesn’t seem like it is coming back as quickly as bagged spinach.

Q: Why would that be when the outbreak was connected to bagged spinach?

A: Some of our customers say they aren’t going to buy any spinach, bulk or bagged. Ironically, others comment that they believe bagged spinach would never be any safer than it is right now because of the extra food safety attention being focused on it.

At the same time, we ran the ad featuring Farm Fresh bagged spinach, with a spread of bagged spinach on the shelf, and the display is improving as we’re replenishing it with additional new SKUs. Two weeks ago, sales of bagged spinach were off over 50 percent, and last week just a little over 40 percent. The trend looks positive for bagged spinach to come back to the pre-recall days.

Q: Has there been any backlash in tomato sales with the news of the Salmonella outbreak?

A: Our customers did not express much concern about the Salmonella outbreak when it was linked to tomatoes, even though Ohio was listed as one of the states with people getting ill. I’m not always in the stores, but produce managers alert me of issues. If they don’t report anything, I don’t get concerned. In this case, the media made it quite clear that the outbreak was over already and there was no danger in eating tomatoes.

One always has to be cautious interpreting sales declines. As Marvin indicates in bagged spinach they have only three of the eight SKUs they used to carry. They also have out-of-stocks because they ordered conservatively, not knowing how well it would sell. So they are down by over half in SKUs, but sales are down only 40%.

If we did a study, we would probably find that because of smaller volume they also cut back shelf space.

Typically sales declines correlate closely with restricted product availability and conservative retail merchandising. It is a sort of chicken-and-the-egg situation – retailers are hesitant to put products on ad and devote large display space until they are certain the product is being well received and has strong consumer demand. But those ads and display spaces are also big pushes to consumer purchasing.

Marvin was kind enough to share with us two very interesting graphics. The first is a poster which is prominently displayed on a floor stand near the spinach. It promotes their private label Farm Fresh spinach. The second image is the front page of Bigg’s ad circular. It features Marvin’s photo and the same message as the poster.

The use of Marvin’s photo gives the ad a personal focus that is probably reassuring to families. I’m not sure the FDA would approve exactly of the wording “Determined Safe By the FDA” since the FDA may think it implies they have somehow inspected or approved of these particular bags of Farm Fresh brand spinach. What Bigg’s means is that the FDA has lifted its advisory to consumers against eating spinach.

In general, these types of specific mentions of safety and the FDA should be stopped soon, probably as soon as they have a normal complement of product. In the short term, such safety-focused messages can help address consumer concerns. In the long term, the mere mention of the subject probably brings up bad associations and discourages sales more than helps.

Much appreciation to Marvin, Bigg’s and Supervalu for sharing this with the industry. It is the willingness of good people and good companies to do this that helps the industry as a whole to advance.