FMI – The Food Industry Association has released “The State of Fresh Foods 2025” report, which demonstrates continued growth in the fresh foods space.
The report explores the momentum of fresh food products in 2024 and provides a look at the role the department plays in the advancement of food retail establishments in the coming years.
“Consumer preferences continue to evolve, and as demand shifts, fresh foods are key for the food industry to meet customer needs,” said Rick Stein, VP of fresh foods at FMI.
“Shoppers’ focus on nutrition and health positions fresh foods as a sales driver in food retail moving forward, and it is essential for the food industry to respond and remain focused on cultivating fresh food departments that spur customer engagement and shopping appeal.”
The analysis suggests that fresh food is a key consideration in the industry’s goal of excelling as a shopper destination. Perimeter departments are used by food retailers to build a competitive advantage and attract shoppers to brick-and-mortar operations, as evidenced by 42 percent of sales coming from fresh sectors in 2024. Retailers report fresh food as a top priority going into 2025 and cite successful innovative fresh product differentiation strategies.
Department narratives within the fresh food sector unveil a more complex story about fresh foods as a growth driver in food retail. The report notes that the meat department shows resilience in the face of economic concerns by remaining a top-performing perimeter department.
Just below meat, produce also leads sales and showcases deep shopper engagement. The growth in sales in both departments highlights shoppers not just spending more but buying more, and each sits at 11 percent of total store sales.
Foodservice achieved record-breaking sales of $56 billion last year, solidifying its role as a key differentiator for retailers in 2024. With shoppers prioritizing quality and convenience, 87 percent of retailers leveraged fresh-prepared foodservice programs, and 63 percent reported success.
While seafood and bakery sales declined slightly – by 1.2 percent and 1.4 percent, respectively – both departments remain strategic priorities due to their strong shopper engagement and experiential appeal. Retailers are focusing on quality, promotion and innovation to drive growth in these high-potential categories heading into 2025.
“Fresh food is at the heart of many of our most important operational strategies, driving workforce investments, technological advancement and customer engagement,” Stein said.
“In 2025, foodservice is our top workforce expansion focus within fresh foods, with nearly a third of retailers planning to increase labor in this area. We’re also seeing fresh food play a leading role in e-commerce success – averaging 39 percent of online sales revenue – and in our tech investments, with growing use of inventory and demand planning solutions tailored to the fresh perimeter. As consumers continue to prioritize health and nutrition, fresh foods remain essential to delivering the quality, convenience and experience shoppers expect.”
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