When Perfect Isn’t the Goal—Sourcing and Developing an “Ugly Produce” Program

November 3, 2017

Would you buy a less-than-perfectly round apple or a knobby, twisted carrot? What if it was up to 30 percent cheaper than traditional grocery store produce AND had an environmental benefit? If you’re like a growing number of consumers, these benefits might just have you coming around to the idea of opting in for “ugly” produce.

As sales of fresh categories continue to increase and more consumers seek out products that are socially responsible and as close to nature as possible, imperfect or “ugly” produce programs are set to be the next wave of growth, says Nicole Stefanov, Director of Sourcing (Food – North America) for Daymon.

“Approximately 20 percent of produce grown in the United States is wasted because it is deemed not attractive enough to sell in retail stores,” she explains. “Rather than being wasteful, some grocery stores have begun to put out baskets of their cosmetically less-than-perfect produce at heavily discounted prices to avoid throwing it away. As more consumers have become aware of the benefits of this imperfect produce—how it’s still healthy and tasty and helps reduce waste—the popularity of the concept has started to grow.”

The idea of the imperfect produce basket has even launched a new online business in the form of a home delivery service. Imperfect Produce, based in San Francisco, is arguably the current leader in this space. The company started in 2015 with the goal of reducing food waste by encouraging consumers to buy the less-than-perfect produce that would typically be discarded. With the tagline “Ugly Produce. Delivered,” Imperfect Produce keeps its business proposition simple. The company delivers less-than-perfect fruits and vegetables directly to consumers’ homes at prices lower than they would pay for regular (“perfect”) offerings found at traditional grocery stores.

“Taking advantage of the fact that imperfect produce is usually at least 30 percent cheaper than standard produce, online businesses like this are able to offer the convenience of home delivery without the upcharge,” explains Stefanov. “As these models expand, traditional retailers could find their produce sales shrinking—unless they develop their own programs to compete.”

This doesn’t mean simply offering shoppers a small basket of blemished produce that would normally be considered shrink, says Stefanov. Instead, it means deliberately sourcing less-than-perfect produce and developing a program to market it to consumers. “A lower price is going to be what grabs shoppers’ attention first,” she says. “But there’s also an opportunity to help educate consumers on the benefits of reducing waste, and in some cases, about what’s not in this produce that may be in conventional versions.”

Developing these types of programs on their own may be daunting for retailers, as several large grocery chains learned when they piloted “ugly produce” programs in 2016 and were unable to meet the sourcing challenges. But as a dedicated partner, Daymon is able to offer full-service solutions to retailers, including the ability to source imperfect produce from farmers and suppliers and build an in-store marketing program, says Stefanov.

Having a program like this goes far beyond reducing food waste—offering “one more way for retailers to differentiate, develop goodwill with consumers, and increase sales,” Stefanov explains. And now is the time to act. “The retailers that implement trend first are going to be the ones that really gain with consumers. This is what consumers are looking for, and they’ll reward the retailers who offer it first by spending more share of their produce dollars at those stores.”

To learn more about how Daymon can help create and market an imperfect produce program, contact Nicole Stefanov, Director of Sourcing (Food – North America), at nstefanov@daymon.com.