Executives in all segments of fresh produce continue to grapple with changes in the industry, including more frequent extreme weather events, high prices impacting suppliers and consumers, an evolving labor pool, and the integration of artificial intelligence, among other trends. Here’s what they’re thinking at the start of 2025 and a look at the months ahead.
Expanding access
Produce suppliers are working to expand the presence of fruits and vegetables in new distribution channels.
“We’re on a relentless pursuit of everywhere,” Zak Laffite, president of Wonderful Citrus BB #:115157 in Delano, CA, noting that Halo mandarins are an impulse snack. “There are improvements needed in the cold chain and the supply chain, but we’re always thinking about how we can put our product in more places.”
For retailers, this expansion can be problematic.
“The biggest challenge, in my eyes, continues to be the spectrum of competition in the industry,” says Ashley Nickle, consultant and project manager at Ashley Nickle Growth Strategies, LLC in Kansas City, MO. “The Federal Trade Commission can say—as it has in the Kroger-Albertsons proceedings—that it doesn’t consider discounters like Aldi, club stores like Sam’s Club, and specialty grocers like Sprouts Farmers Markets to be competitors to traditional grocers.
“But anyone in the industry recognizes this viewpoint ignores how customers actually shop in 2024,” she emphasizes. “Most households split their spend across stores and channels, and what they buy in other formats does influence what they buy at traditional grocers.
“What fascinates me most as I watch the grocery landscape is which companies plant a flag and stop trying to be everything to everyone.”
Nickle cites two examples: The Fresh Market, which is about occasions and culinary inspiration, has reinforced its produce department and stores; and Sprouts, which makes innovation a priority, is working with partners to source unique produce items. “In the next five to 10 years, I expect it will become increasingly difficult for legacy grocers that don’t pick a lane.”
The impact of federal programs
The industry is watching the fates of several current and prospective government programs that could move the needle on produce consumption.
Agreement on the Farm Bill seems to be far away, despite looming deadlines. One of the main sticking points is funding for the large and important SNAP program—including the possibility of eliminating specific protections encouraging the use of the program for fresh foods—and school lunches.
“These put money in the pockets of people who buy produce, which is good for the industry,” says Daniel Scheitrum, assistant professor of agribusiness at California Polytechnic State University (Cal Poly) in San Luis Obispo, CA. “Budget cuts there would be harmful.”
One issue of note is free school lunches for all, something implemented at the federal level during the pandemic but discontinued after kids went back to the classroom.
“There’s a huge movement to push free school meals for all,” says Mollie Van Lieu, vice president for nutrition and health at the Newark, DE-based International Fresh Produce Association BB #:378962. Eight states have permanently implemented their own programs, and bills have been introduced in the U.S. Congress.
The produce prescription movement is also progressing. More states are adopting produce prescription waivers, according to Van Lieu, with the Department of Veterans Affairs, Department of Health and Human Services, and the Indian Health Service agency piloting produce prescription programs that are going well so far.
“We’ll get some good data, since these are fully integrated healthcare systems,” she notes.
This is an excerpt from the cover feature of the January/February 2025 issue of Produce Blueprints magazine. To read the whole issue, click here: https://www.producebluebook.com/#january-february-2025-produce-blueprints/1/
