Innovation is renewing a process, product, or service by applying new methods, techniques, or successful ideas. Innovation creates new value and ensures long-term competitiveness for companies. In the United States, supermarkets focus on fresh foods to differentiate themselves and attract customers, leading to innovations in new departments. In addition to refreshing food and agricultural product selections, they are implementing marketing techniques highlighting freshness. Innovation extends to supply chains and strategies to attract online buyers. Consumers seek fresh and convenient solutions, from ready-to-heat meals to packaged ingredients. Kroger, Food Lion, Sprouts Farmers Market, and Northgate Gonzalez Market, among others, have improved their private label selections and refrigerators for agricultural products. In 2021, Peru positioned itself as the third most important supplier of fresh foods to the United States, and by 2024, it is working to reaffirm itself as one of the leading suppliers of fresh foods worldwide.
Innovation in Fruits and Vegetables
According to Jeff Wells, senior editor of Grocery Dive, in his article “Innovation in Fresh Foods,” supermarkets focus on fresh foods to differentiate themselves and attract customers. This means supermarkets and food stores have oriented themselves towards selling fresh products to stand out and attract more consumers. Innovations have been seen in new departments, such as adding varieties of foods, refreshing sections of agricultural products and meats, and using marketing techniques highlighting freshness. Innovation is not limited to the interior of stores; it also includes updates to supply chains and strategies to reach online buyers. Retailers seek to improve the offering of fresh foods for omnichannel buyers, prioritizing freshness and offering solutions for different levels of meal preparation. Examples include Kroger’s refreshing private deli and bakery labels and Food Lion, which has innovative refrigerators for agricultural products. In summary, supermarkets are adopting innovative strategies to differentiate themselves from the competition, focusing on fresh products and attracting more customers.
Source: Catherine Douglas Moran/Grocery Dive
Durable Fresh Products
Meanwhile, Catherine Douglas Moran, in her article “How Food Lion’s Food Coolers Help Differentiate the Chain,” dated September 5, 2023, says, “The company has promoted the ability to keep products fresh for longer, experts say the real value is in the unique shopping experience offered by the coolers” (Douglas). This means that the company promotes the quality of keeping its products fresh in the coolers for a longer time to provide a unique experience to the customer.
Sprouts Farmers Market founded in 2002, is a specialized supermarket in the U.S. known for its fresh and natural products, with fresh items accounting for about 20% of sales in 2022. It focuses on California, with over a third of its 386 stores there. Northgate Gonzalez Market is a Latino supermarket offering fresh products focused on the Hispanic and Latino table. It is an iconic Hispanic supermarket in the United States, aiming to serve the emerging Hispanic population with fresh and traditional products and personalized services. Northgate has over 38 stores in Los Angeles, Orange, and San Diego counties. Therefore, supermarkets, whether American like Lyon and Sprouts Farmers Market or Latino like Northgate Gonzalez Market, promote the availability of recent products on their shelves to attract customers by providing them with a unique freshness experience.
Peru ranked as the ninth-largest global fruit supplier in 2021
Peru, a global leader in fruit production, experienced an increase in demand due to the Pandemic, according to Lizbeth Pumasunco, Head of Consulting and Projects at the CIEN-ADEX Center. Pumasunco highlighted the growing demand for fresh and organic products, emphasizing the importance of quality food amid health issues. The Innova 2020 survey revealed that 6 out of 10 global consumers now seek more food and beverages that support their immune health. In Latin America, Pumasunco forecasted a 29% growth in organic product consumption between 2021 and 2026. Brazil was the leading exporter, followed by Mexico, Chile, Argentina, and Peru. World food imports, including cereals, meat, fish, seafood, and other items, are also increasing. In 2021, Peru was the leading exporter of blueberries, quinoa, and grapes, followed by preserved fruits and vegetables, olives, avocados, and artichokes. CIEN-ADEX forecasts a new record of $17.5 billion for non-traditional exports, reflecting an 8.7% evolution due to the dynamic response of the agro-industry to external demand for superfoods and better prices for food and beverages. Piura’s agro-exports reached $477 million between January and July 2022, with fresh mango being the most demanded, representing 29% of the total. The United States was its leading market, with $142 million. Therefore, due to the Pandemic, Peru positioned itself as the 9th largest global supplier of fresh fruits due to its customers’ demand for fresh and healthy products.
Reliable Food Supplier to the World
The Peruvian Ministry of Foreign Trade and Tourism (Mincetur) achieved $9.807 billion in food exports in 2023, 12.3% more than the 2021 figure. The country remained a global supplier of quinoa and blueberries, grapes and fresh asparagus, processed squid, artichokes, preserved asparagus, avocados, Amazon nuts, third capsicum, frozen mango, scallops, canned hearts of palm, Wilking’s mandarin, and ginger. The director of the Research Center for Global Economics and Business of the Association of Exporters CIEN-Adex, Edgar Vásquez Vela, expects a continuous increase in food imports this year and in the following years. Global consumer trends for organic foods are observed, with sales of $294 billion for organic foods, $160 billion for vegetables, and $18 billion for naturally flavored products. Therefore, customers’ demand for organic and healthy foods allows Peru to position itself as a reliable global food supplier.
Reliable Food Supplier to the World
Peru, the second-largest exporter of fresh fruits to the United States, accounted for 12% of total imports in 2023, surpassing Mexico, Chile, Guatemala, and Costa Rica. Gonzalo Ibáñez, FDA’s representative for Latin America, highlighted Peru’s significant growth in presence in the U.S. over the years, ranking 14th among global producers. In 2023, Peru imported $2.277 billion in fresh fruits, with Mexico, Chile, and Brazil being the leading importers. Peru also represented 40% of table grape imports, totaling $992 million. Peru’s leadership was recognized during the ‘FDA Summit: Peru 2024′ event in Lima and Trujillo, organized by Adex, Senasa, FDA, and Protec. Ibáñez emphasized Peru’s potential to consolidate its products in the U.S. market. In 2023, 1,049 Peruvian companies exported agricultural and agro-industrial products to the U.S., making it the largest buyer of these products worldwide. Adex’s director, Diego Llosa, highlighted the importance of having updated information on FDA regulations for producers and exporters, emphasizing the need to avoid any goods’ retention that could affect the country’s image. Therefore, Peru can consolidate its leadership as a provider of fresh fruits to the U.S. market, not only due to the variety and quality of its fruits but also by complying with FDA regulations to avoid product rejections and maintain the country’s good image.
United States: Major Importer of Fresh Produce
The fresh produce industry, exporting and importing various fruits and vegetables, demonstrates that the United States is a significant exporter and importer of agricultural products. The certified organic area increased by over 44%, and cropland by 11% between 1992 and 1997. According to reports published after 1997, the organic area has steadily increased. The “Certified Organic Farms of California” (CCOF) estimated a 38% increase in area between 1997 and 1999, while the Idaho and Farm Verified Organic (FVO) report indicates a 55% increase in cropland area. According to the Washington Department of Agriculture, there was a 150% growth between 1997 and 1999. In December 2000, the U.S. Government finalized the development of National Organic Standards, which were implemented in October 2002.
Meanwhile, the industry is preparing to address the growing demand for organic products. Conventional retail supermarkets have begun selling fresh organic products, accounting for over 42% of total sales. The expansion of major US food companies into the organic market and the merger between natural and organic food companies will increase the advertising and promotion of organic products. As a result, American consumers will be more interested in organic products, including fresh produce. More than 12,000 retail stores in the U.S. specialize in organic and natural foods.
Additionally, over 120,000 conventional retail stores sell fresh organic products. Once the U.S. National Organic Standards are implemented, importers of fresh organic products can label their products as USDA ORGANIC when selling in the U.S. market. Although the value of fresh organic product imports is unknown, the U.S. imports over $6 billion of fruits and vegetables annually. If organic segment imports reach the current level of U.S. retail sales (2 percent), their short-term potential will exceed USD 125 million. By far, the United States is the largest importer of fresh foods globally, with a projection of $6 billion worth of various fruits and vegetables per year, catapulting it as the world’s largest consumer of organic and healthy foods.
United States: Food and Beverage Consumption as a result of the Pandemic
In the United States, as in most of the world, during periods of economic slowdown, people tend to show greater price sensitivity, leading to decreased sales of “premium” items and their replacement with cheaper options. However, a phenomenon has exceeded all expectations: despite the negative impact on the U.S. economy, the Pandemic has boosted sales of certified organic foods and beverages. The following graph shows the sharp economic slowdown in the United States in 2020 (expressed by the decline in Gross Domestic Product (GDP) Growth), while sales of certified organic products proliferated (O.G. Growth).
This phenomenon was a result of the Pandemic. According to New Hope Network, 67% of Americans surveyed last year expressed that health has been a priority since the onset of the Pandemic and that they have chosen to improve their eating habits and purchase healthier and more sustainable products. This means that the Pandemic promoted the sales and consumption of organic products for their nutritious properties and environmental care.
Growing Organic Food Market in the United States
The demand for organic food in the U.S. has reached impressive levels, positioning the country as a leader in a market whose global sales exceeded $133 billion in 2021. The organic food market is expanding in the United States, with sales of $61.7 billion, mainly due to growing awareness of health and the environment as consumers seek healthier and more sustainable options. This means that the organic food market in the United States is growing, positioning it as a leader worldwide, mainly due to customer awareness regarding health and the environment. In 2022, organic food sales in the U.S. experienced a notable increase, consolidating the nation as a global leader in organic food demand. According to available data, retail sales of organic foods in the U.S. market generated around $61.7 B, maintaining the annual growth sustained since 2000.
Furthermore, the trend is expected to increase in 2023. All categories of organic foods have experienced this increase, although sales of fruits and vegetables remain the leading category in purchasing organic products. Therefore, the U.S. organic food market is growing due to customer awareness of acquiring healthy and environmentally friendly products, which has been consolidating during 2021, 2022, and 2023, respectively.
Peru Aims to Position Itself as a Leading Supplier of Organic Foods
The Commission for the Promotion of Peru for Export and Tourism (PromPerú) reported that a delegation of 20 companies from functional product lines is present at the BIOFACH 2024 fair, the world’s leading platform for organic products, held in Nuremberg (Germany) from February 13 to 16. The Peruvian delegation intends to promote the national offer of organic products in the functional product category, especially in fresh products, coffee, and cocoa. Additionally, the aim is to establish Peru as a leading country in distributing organic, nutritious, and high-quality foods. This means that the country’s intention to position itself as a leading supplier of organic foods worldwide is a strategy of PROMPERU to showcase the biodiversity in organic, nutritious, and high-quality fruits from our country. This news is incredibly beneficial for the government because it aims to position itself as the leader in organic foods worldwide and as a strategy to showcase its incredible biodiversity in high-quality organic fruits.
Conclusion
Supermarkets are implementing innovative strategies to distinguish themselves in a competitive market, emphasizing the freshness of their products to attract consumers. Both American supermarkets, like Lyon and Sprouts Farmers Market, and Latino ones, like Northgate González Market, are focusing on showcasing fresh products as a way to provide a unique shopping experience centered on freshness. This trend is partly a response to the global Pandemic, which has increased consumer demand for fresh and healthy foods. Specifically, Peru has become the ninth-largest global provider of fresh fruits, strengthened by the increased demand for organic and healthy food options driven by the Pandemic. This shift in consumer preferences has allowed Peru to establish itself as a reliable source of products worldwide. Additionally, Peru’s commitment to offering a diverse and high-quality selection of fruits while complying with strict FDA regulations has strengthened its position in the U.S. market.
Given that the United States is the world’s leading consumer of organic and healthy foods and the largest importer of fresh products, the Pandemic has only increased sales and consumption of organic products due to their health benefits and environmental respect. Consequently, consumers’ growing awareness and preference for eco-friendly and health-oriented products have significantly driven the U.S. organic food market. This market has experienced substantial consolidation during 2021, 2022, and 2023, creating a favorable environment for Peru. This situation offers a golden opportunity for Peru to consolidate its status as a global leader in the organic food sector and promote its wide range of high-quality organic fruits, further expanding its international footprint in the organic products market.
ABOUT THE AUTHOR
Luis Henry Contreras Del Aguila
Food Industries Engineer Universidad Nacional Agraria de la Selva- Tingo Maria- Peru
Master in Agribusiness Administration ESAN University – Lima-Peru
Country Agribusiness CEO
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