What’s The Cost of a Bad Apple

A few years ago, I spoke at a national retail grocery conference. My presentation was titled, Revolutionising The Produce Shopping Experience – What Does a Bad Apple Cost Your Business? 

It raised questions about how we measure and evaluate a produce department’s success. Given the fantastic audience feedback, I realised this topic hit a nerve.

Do KPI’s Effectively Measure a Produce Department’s Success?

Most produce department’s measure their success using key numeric criteria: percent of store share, gross profit, percent wage cost, percent waste, etc. It is uncommon to find anything other than numbers as success measurement tools.

  • What if numeric evaluation is only a minor indication of whether a produce department is successful?
  • What if quantitative, numeric calculations miss the essence of what makes a produce department successful?

Which leads me back to this blog’s theme – how do you measure the cost of a bad apple? How does a floury/mealy peach impact profits? Not just in terms of lost sales – but also customer dissatisfaction? What is the opportunity loss for repurchase?

Fresh Produce Is Unique and Very Influential

I believe we give away money/miss sales opportunities by not focussing on the produce shopping experience we give consumers.

We can’t expect to maintain or grow our ‘share of stomach’ if we don’t offer products that meet consumer expectations.

It is well documented that produce departments influence where consumers choose to shop. This tells me we need to be looking at more qualitative ways to measure the success of a produce department by better understanding what makes produce unique.

Fresh Fruits and Vegetables Are Alive and Perishable

Think of the food sold in a typical supermarket. How many products are actually still breathing? Not many. Produce continues to breathe/respire on shelf and this has implications.

Most of it is never going to get any better than the day it was picked. Granted, some fruits’ ripen and their flavour improves, but in terms of shelf life, it’s all downhill.

This means fresh produce is in the shelf life management business.

So why doesn’t produce act like it’s in the shelf life management business?

In supermarket meat, deli, bakery and chilled aisles, there is a strict code of conduct plus many laws that dictate how a product’s shelf life is managed.

It’s why retailers don’t sell out of code date milk; or milk that’s been stored at the wrong temperature. It’s why they discount meat and cheese and dips that are about to reach code date. They use best practice and they manage shelf life.

Produce Departments Have a More Flexible ‘Best Practice’

In produce, best practice is more like a theory, not a rule.

Consider these examples. Some produce managers store tomatoes in the refrigerator – even though it is well documented refrigeration ruins their texture, taste and flavour. Many stores put not-ripe stone fruits in refrigeration – another great way to ruin texture and flavour.

I’ve seen stores willingly selling sell black avocados that are suitable only for the rubbish bin. And talking with a specialty fruit grower the other day, he commented often 50% of his fruit on the shelf is past its best.

What’s happening?

Fresh Produce Has A ‘Salvage’ Mentality

When I ask produce managers why they sell product that’s past its best, they always tell me, “Someone will buy it.”

Yes and that someone is our consumer.

  • The one we work so hard to design creative packaging to      entice.
  • The one we work so hard to grow a perfect, blemish free apple      for.
  • The one we spend hours and thousands of dollars designing      delicious recipes for.

So what is the cost of a bad apple? When only quantitative, numeric measurements are used, the cost is simply unknown. And that will be costing you sales…and value.

Food for thought, isn’t it.