Demand for healthy foods, growing or not?

In the past few years, healthy organic food has certainly become a popular alternative to traditional eating habits. People seem to be spending more money on fruits and vegetables. So why hasn't the food industry seen a substantial increase in consumption?

Source: Calculated by ERS/USDA based on data from various sources

Source: Calculated by ERS/USDA based on data from various sources

While consumer demand for healthy foods seems to be expanding, fruit and vegetable sales in the U.S. grew just 14 percent from 2008-13 and much of that growth was the result of higher prices rather than increased consumption (see chart). Michigan State University Extension has several educational programs promoted to healthy eating; however those programs only reach a small portion of the population. In the past few years, healthy organic food has certainly become a popular alternative to traditional eating habits. People seem to be spending more money on fruits and vegetables. So why hasn’t the food industry seen a substantial increase in consumption?

One reason for this might be convenience. Consumers are increasingly interested in finding convenient shortcuts in preparing their fruit and vegetable dishes. Nearly four in ten (38 percent) consumers buy pre-packaged salad mixes and more than a quarter (26 percent) of consumers buy pre-cut, pre-packaged fruit and vegetables. There has been a significant drop in fruit and vegetable use during family dinners. To increase the usage of fruit and vegetables, producers may want to incorporate recipes in their packaging. This marketing tactic would show consumers how they could easily implement fruits and vegetables into their daily diet. The recipes could be distributed as fact sheets or as QR codes at supermarkets, farmers markets or other marketing channels.

Some good news for Michigan producers is that two small segments of this industry, frozen fruit and dried beans, have experienced exceptional growth from 2011-13. While the processed fruit market was relatively stagnant, frozen fruit grew 34.6 percent netting $911 million in sales for 2013. Similarly, while dried beans represent a small percentage of the overall vegetable market, sales have grown by 21.7 percent netting an impressive $597 million in 2013. Both of these trends present exciting opportunities for Michigan producers since the state is a major contributor of both fruit and dry beans.

Looking to the future, expansion in fruit and vegetable sales will depend heavily on market players’ abilities to appeal to consumer demand.

Photo source: Calculated by ERS/USDA based on data from various sources

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