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Promotion key to spring table grape sales

By
Tim Linden

With a record table grape crop expected from Mexico this spring, shippers are counting on big promotional support from retailers to move the crop at a decent f.o.b. price.

“The key this year is we need support from retail,” said Carlos Bon, vice president of sales for Divine Flavor, based in Nogales, AZ. “The pricing will be aggressive.”

Bon added that while many fresh produce commodities are seeing inflationary price hikes, he does not believe that will be the case for table grapes in the early part of the 2022 season simply because the volume will demand promotable pricing. He did note that grower costs have gone up but he does not expect that to impact the average f.o.b. price. He did say, however, that freight rates have also gone up, which will undoubtedly result in a higher delivered price to U.S. retailers across the country.

With significant production coming from the state of Jalisco — the earliest producing grape growing district in Mexico — Divine Flavor’s early grapes were nearing harvest in late March. “The grapes look fantastic,” he said. “The quantity and quality are excellent.”

With its early season grapes, Divine Flavor will be marketing some grapes before the huge volume weeks begin around the third week of May. During May and June, Mexico is expected to send about 23 million boxes to market with multiple weeks of four million cartons. Bon reiterated that this translates to excellent promotional opportunities for retailers. June will be the peak month with almost 17 million boxes expected to be shipped from Sonora. California’s Coachella Valley will add around 3 million cartons to the mix in May, June and July, with June being its peak month as well.

John Pandol of Pandol Bros. Inc., based in Delano, CA, serves as the grape division chair of the Fresh Produce Association of Americas. In that position, he was a presenter in the recent video conference reporting on the size of the Sonora crop. During that presentation, he noted that the 2022 crop is looking very much like the 2019 crop when Sonora shipped about 23.7 million boxes. He advised shippers and retailers to look at their books to get a good gauge on how the crop developed that year.

However, he did not ask them to repeat their actions from 2019, which proved to be a difficult year in terms of pricing and movement. Instead, he said it gives these stakeholders the opportunity to ask themselves “if I had a chance to do 2019 over, what would I do different? Learn from history, don’t repeat it,” he urged.

Scott Rossi, who is on the sales team for Fresh Farms, which is headquartered in Rio Rico, AZ, and has production in both Mexico and California, also said that this season is going to be challenging. He agreed that promotion is the key, especially in June, when the crop will be at its peak.

He is also worried about logistics and inspectors: will there be enough USDA inspectors in Mexico to get the large crop in the pipeline and will there be enough trucks to move the grapes throughout the United States at a reasonable rate?

Along with promotion, he believes those issues will be key to a successful season.

Another industry veteran weighing in on the spring marketing situation was John Hartley of Anthony Vineyards, which is headquartered in Bakersfield, CA. Anthony has all of its production in California in the Coachella Valley and the San Joaquin Valley, but he is selling grapes at the same time that the Mexico production hits the United States and he is also worried about too much volume. He predicted that some days there will be one million cartons in the marketplace and wondered out loud if the country can absorb that quantity. “A million cartons per day? How do you deal with that? It’s going to be interesting,” he said in an understated way.

Hartley also expressed optimism that the industry will find a way. “We are optimistic. The last two years have been pretty good years with good volume and good pricing most of the time. We are looking forward in a positive light. Foodservice is coming back, and we are getting back to normal,” he said, speaking of the alterations caused by COVID-19 over the past two years.

He added that growers in Mexico and the United States are transitioning to the better, newer and sweeter varieties that consumers like, which should mean increased sales. He added that organic grapes, which is a specialty of Anthony and a growing category, continues to receive a premium f.o.b. price of 20-25 percent. This is a category that also offers an opportunity for increased sales in the industry’s effort to move this large crop.

Tim Linden

Tim Linden

About Tim Linden  |  email

Tim Linden grew up in a produce family as both his father and grandfather spent their business careers on the wholesale terminal markets in San Francisco and Los Angeles.

Tim graduated from San Diego State University in 1974 with a degree in journalism. Shortly thereafter he began his career at The Packer where he stayed for eight years, leaving in 1983 to join Western Growers as editor of its monthly magazine. In 1986, Tim launched Champ Publishing as an agricultural publishing specialty company.

Today he is a contract publisher for several trade associations and writes extensively on all aspects of the produce business. He began writing for The Produce News in 1997, and currently wears the title of Editor at Large.

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