Cool comes to the humble produce aisle

Yes Apples leans on its packaging to showcase its brand online and in grocery stores.  (Yes! Apples)
Yes Apples leans on its packaging to showcase its brand online and in grocery stores. (Yes! Apples)

Summary

A wave of branded fruits and vegetables are landing on e-commerce sites and in grocery stores across the country, using snazzy fonts and bright colors that promote their provenance and sustainable credentials.

First cottage cheese got a glow-up. Then canned fish and olive oil developed a new look. Now inglorious produce is getting its turn in the stylist’s chair.

A wave of branded fruits and vegetables are landing on e-commerce sites and in grocery stores across the country, using snazzy fonts and bright colors that promote their provenance and sustainable credentials. This isn’t “designer" produce with designer price tags, like Omakase Berries. It’s the everyday apple, now with a Pepsi-style marketing strategy.

Outside some enduring brands such as Dole, Chiquita and Driscoll’s, plus a newer player in Avocados From Mexico, most basic produce has usually competed on price and quality but little else.

More farmers and produce companies are now moving to a business model they’ve seen work in other product categories: differentiate even the plainest products with fun packaging and an interesting back story, gain customers’ loyalty and sell more units at higher margins. Branding the previously unbranded helps companies use marketing tools that had been unavailable.

“Without a brand we weren’t able to be in shopper marketing, we weren’t eligible for press, we had no partnerships," said Tenley Fitzgerald, the vice president of marketing of Yes! Apples, the marketing arm of grower agency New York Apple Sales.

The 105-year-old New York Apple Sales introduced Yes! Apples to retailers around four years ago in a bid to lift sales at retail. Fitzgerald, a marketer who previously worked for direct-to-consumer food brands Blue Apron and Fresh Direct, had posed the idea of a consumer brand to bosses after a contract stint with the organization.

“I was a social media freelancer…initially resharing recipes and information about [New York] apples, but there was nothing to tie the posts to regarding a consumer-facing brand," Fitzgerald said. She went on to package its apples in paper totes, glossy red boxes and plastic bags splashed with its looping cursive logo, and created a website that lets consumers buy from the brand directly. E-commerce sales in the six months ended February 2024 were more than double those in the same period the year prior, she said, declining to share dollar figures.

A new climate

A number of factors have changed the status quo in produce farming in recent years, investors and industry experts say.

Consumers started paying more attention to the role of produce in their health, and some even want to understand the way in which their produce is grown. More shoppers bought produce online, where they can’t examine the products in person, making brand names a more useful signal of consistency.

They also showed a growing tendency to shell out for cool food brands that say something about their lifestyles and tastes, even during a time of food price sensitivity.

It also isn’t only about produce itself: Some new kitchen designs feature cupboards without doors, said Andrea Hernández, the founder of food and beverage insights firm Snaxshot. “Cabinet doors don’t allow for people to see that you have a $45 olive oil bottle and a $15 hot sauce," Hernández said.

Private-equity and venture-capital firms have meanwhile entered the produce business, eager to get a slice of the last opportunities to invest in food brands from the bottom up, and willing to connect farmers with the designers and marketers that make brands pop in grocery stores. Nearly $30 billion was invested in agrifood tech startups in 2022, up from $3.1 billion in 2012, according to VC firm AgFunder.

Patient farmers, patient investors

Some new farming brands have struggled. Brooklyn-based Smallhold, a mushroom brand sold in Whole Foods and named one of Fast Company’s most innovative companies of 2023, in February filed for bankruptcy. It cited a downturn in venture-capital fundraising and flat sales in the fresh mushroom category over the past year. The company’s co-founder and CEO, Andrew Carter, resigned around the same time.

New York Apple Sales, meanwhile, hasn’t seen any “overwhelming lift" in physical stores since the introduction of the Yes! Apples brand, due to a variety of factors including a rise in private-label packaging, Fitzgerald said. The marketing organization is looking for more online retail partners, Fitzgerald said, “since that’s an area where we can make a bigger impact in the category due to consistent product placement and branding across online retailers."

Branded produce more broadly is developing relatively slowly, companies and investors said, as growers strive to deliver uniform products and absorb unaccustomed new costs for marketing and packaging. The cadence is uneasy for some investors used to working with technology founders of the “move fast and break things" ethos.

“As investors we have to recognize this is not, and can’t be, an explosive category, but that doesn’t mean it’s not a huge opportunity," said Elly Truesdell, the co-founder and managing partner of venture-capital firm New Fare, which invests in food and beverage businesses.

One of New Fare’s first investments was in Ark Foods, a produce company that in 2013 began selling shishito peppers and has expanded into mini heirloom tomatoes, eggplant, honeynut squash and precut and mixed salad bags, all packaged and branded with the Ark Foods logo.

Noah Robbins, the company’s CEO and founder, made his first splash in the industry by getting his peppers into restaurants via suppliers and asking chefs to print the brand’s name on menus.

“I used all of the menus as a data point when we went to retailers and we said, ‘Look, consumers want new experiences with vegetables, and this is our brand,’" said Robbins, a mustachioed second-generation farmer who studied fine art in college and often appears as the face of what he calls a modern-day farming company. Ark Foods has raised over $4 million in venture capital and is profitable, he said.

“We’ve always tried to do our own thing and grow responsibly," Robbins said. “We haven’t gone out there and tried to raise a gazillion dollars."

Your crops here

Produce marketing requires more flexibility than selling packaged goods, said Michael Perdigao, president of advertising and corporate communications for the Wonderful Company, the privately held business behind Pom Wonderful pomegranates and pomegranate juice, Wonderful Halos mandarin oranges and Wonderful Pistachios. The company first established the Pom Wonderful brand in 2002, making it a relative elder of everyday produce branding.

“We don’t know from year to year how big the crop is going to be," Perdigao said. “We may have committed to a media buy or bought in the upfront market or something, and then don’t need it."

The Wonderful Company often shifts marketing budgets from one brand to another to reflect fluctuations in supply, Perdigao added.

Convincing retailers to sell produce differently can also be a challenge, Yes! Apples’ Fitzgerald said.

Some retailers maintain a “clean store" policy prohibiting brands’ signs and other types of advertising, which makes it tricky to shout about a new name in the produce section, Fitzgerald said. The saving grace in those circumstances has been the rise in packaged produce—bags of items once sold individually, providing new real estate for brand names and the stories behind them.

“Without that packaging," Fitzgerald said, “all I have is a half-inch [price look-up code] sticker."

Write to Katie Deighton at katie.deighton@wsj.com

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