Peruvian asparagus deal undeterred by decrease in volume
Peruvian asparagus deal undeterred by decrease in volume
While this year's Peruvian asparagus deal is in full swing and by most accounts has been a good season overall, the volume shipped to the United States is not as high as in past years.
"Volume has increased about 1 to 2 percent this year, where in past years it has increased by 12 to 14 percent a year," said John-Campbell Barmmer, director of marketing for Chestnut Hill Farms, a division of Bounty Fresh LLC, and co-chair of the Peruvian Asparagus Importers Association. "Production in Peru has increased 12 to 15 percent over last year, but product is going toward new and different markets in Europe and Latin America."
Mr. Barmmer attributed the decline to the passage of the Central American Free Trade Act and the "very difficult situation" brought about by the Andean Trade Preference Act, a free trade agreement in place among the United States, Colombia, Peru and Ecuador.
Mr. Barmmer said that the ATPA -- which is up for renewal in 2006 and keeps Peruvian asparagus duty-free -- is in the final round of negotiations.
He added that the association has joined forces with several other associations and coalitions, all of which are actively lobbying for its renewal.
According to Mr. Barmmer, several U.S. states have claimed that Peru is infringing on their production and have gone so far as to say that it "stole" the asparagus-for- processing business. One has even hired counsel to look into imposing anti-dumping laws and requested that tariffs be placed on Peruvian asparagus.
Mr. Barmmer said that in response, Peru has limited the volume of asparagus shipped to the United States, an arrangement which has actually benefited importers, as it has helped them to maintain a stable price structure. Charlie Eagle, vice president of Pompano Beach, FL-based Southern Specialties Inc., agreed. "We have had a good season so far with controlled supplies," he said. "Our asparagus program has grown this year and our demand has increased. I am pleased with the way things have gone."
Troy Mesa, import category manager for Rosemont Farms Corp. in Boca Raton, FL, told The Produce News Nov. 21 that while Rosemont's volume was up over last year, the "market has been a challenge for the last three weeks and going into the fourth due to Hurricane Wilma."
Mr. Mesa said that the hurricane caused a "chain reaction" that backed up a lot of product. Two weeks' worth of product then hit the market without any advertisements, as none could be printed.
Though the deal may have been a bit challenging for some wholesalers in Florida and Louisiana due to the hurricanes that devastated portions of those states, Mr. Barmmer said that overall it has been a good season with excellent quality.
In addition to its work on ATPA, Mr. Barmmer said that the association is devoting its energies to increasing consumption of Peruvian asparagus, and one of the ways this is being accomplished is through value-added lines.
"To move this category, we need to have more SKUs," he said. "We have to do it as an industry."
To that end, Mr. Barmmer said that Chestnut Hill Farms recently purchased Agro Industries Backus, giving the company exclusive marketing rights and control over what is packed on 1,000 hectares of Peruvian asparagus-producing land, which will be primarily used for value-added products.
The importance of value-added products was echoed by several of the association's members who recently added them to their lines.
Mr. Eagle said that Southern Specialties recently introduced "Great on the Grill" asparagus at the Produce Marketing Association's international convention and exposition in Atlanta. Packaged under its "Southern Selects" brand with dynamic labeling, he said it was "a nice way to give added value to its retail customers," and the company "is pleased with the results."
Southern Specialties is also offering asparagus tips as a value-added addition to its asparagus program. "We are working on giving our customers some options so they can bring more value to their asparagus sections," Mr. Eagle said.
Mr. Mesa said that Rosemont Farms' purchase of United Fresh International in October has given the company a value- added line that includes asparagus tips, white asparagus overwrapped in a tray and asparagus tenders in microwaveable bags. "We are very excited about the attention it got at the PMA," he said.
Chris Martin, president of Gourmet Trading and co-chair of the PAIA, added that another way to stimulate demand was to promote the positive health benefits of asparagus to the consumer.
Mr. Martin noted that another challenge to the industry was the ever-increasing cost of freight. He believed that the total amount of Peruvian asparagus being shipped by sea had increased from the 7 percent of previous years to somewhere between 20 and 25 percent this season, with some recent weeks even higher than that.
Mr. Barmmer said that a greater percentage of total imports is being shipped by sea than by air because of three factors: an increase in the technology of containers, better scheduling of shipments and the economics of oil prices.
Mr. Mesa noted that "high air freight has pushed people into sea freight, and [freight] remains an issue and concern that digs into the margin for the grower." He added that the industry also needed to look into new ways to get product to the United States.
To help counter the high cost of freight, both Southern Specialties and Gourmet Trading have opened new distribution facilities that allow for more efficient control of product, which also translates into better service for their customers.
"Volume has increased about 1 to 2 percent this year, where in past years it has increased by 12 to 14 percent a year," said John-Campbell Barmmer, director of marketing for Chestnut Hill Farms, a division of Bounty Fresh LLC, and co-chair of the Peruvian Asparagus Importers Association. "Production in Peru has increased 12 to 15 percent over last year, but product is going toward new and different markets in Europe and Latin America."
Mr. Barmmer attributed the decline to the passage of the Central American Free Trade Act and the "very difficult situation" brought about by the Andean Trade Preference Act, a free trade agreement in place among the United States, Colombia, Peru and Ecuador.
Mr. Barmmer said that the ATPA -- which is up for renewal in 2006 and keeps Peruvian asparagus duty-free -- is in the final round of negotiations.
He added that the association has joined forces with several other associations and coalitions, all of which are actively lobbying for its renewal.
According to Mr. Barmmer, several U.S. states have claimed that Peru is infringing on their production and have gone so far as to say that it "stole" the asparagus-for- processing business. One has even hired counsel to look into imposing anti-dumping laws and requested that tariffs be placed on Peruvian asparagus.
Mr. Barmmer said that in response, Peru has limited the volume of asparagus shipped to the United States, an arrangement which has actually benefited importers, as it has helped them to maintain a stable price structure. Charlie Eagle, vice president of Pompano Beach, FL-based Southern Specialties Inc., agreed. "We have had a good season so far with controlled supplies," he said. "Our asparagus program has grown this year and our demand has increased. I am pleased with the way things have gone."
Troy Mesa, import category manager for Rosemont Farms Corp. in Boca Raton, FL, told The Produce News Nov. 21 that while Rosemont's volume was up over last year, the "market has been a challenge for the last three weeks and going into the fourth due to Hurricane Wilma."
Mr. Mesa said that the hurricane caused a "chain reaction" that backed up a lot of product. Two weeks' worth of product then hit the market without any advertisements, as none could be printed.
Though the deal may have been a bit challenging for some wholesalers in Florida and Louisiana due to the hurricanes that devastated portions of those states, Mr. Barmmer said that overall it has been a good season with excellent quality.
In addition to its work on ATPA, Mr. Barmmer said that the association is devoting its energies to increasing consumption of Peruvian asparagus, and one of the ways this is being accomplished is through value-added lines.
"To move this category, we need to have more SKUs," he said. "We have to do it as an industry."
To that end, Mr. Barmmer said that Chestnut Hill Farms recently purchased Agro Industries Backus, giving the company exclusive marketing rights and control over what is packed on 1,000 hectares of Peruvian asparagus-producing land, which will be primarily used for value-added products.
The importance of value-added products was echoed by several of the association's members who recently added them to their lines.
Mr. Eagle said that Southern Specialties recently introduced "Great on the Grill" asparagus at the Produce Marketing Association's international convention and exposition in Atlanta. Packaged under its "Southern Selects" brand with dynamic labeling, he said it was "a nice way to give added value to its retail customers," and the company "is pleased with the results."
Southern Specialties is also offering asparagus tips as a value-added addition to its asparagus program. "We are working on giving our customers some options so they can bring more value to their asparagus sections," Mr. Eagle said.
Mr. Mesa said that Rosemont Farms' purchase of United Fresh International in October has given the company a value- added line that includes asparagus tips, white asparagus overwrapped in a tray and asparagus tenders in microwaveable bags. "We are very excited about the attention it got at the PMA," he said.
Chris Martin, president of Gourmet Trading and co-chair of the PAIA, added that another way to stimulate demand was to promote the positive health benefits of asparagus to the consumer.
Mr. Martin noted that another challenge to the industry was the ever-increasing cost of freight. He believed that the total amount of Peruvian asparagus being shipped by sea had increased from the 7 percent of previous years to somewhere between 20 and 25 percent this season, with some recent weeks even higher than that.
Mr. Barmmer said that a greater percentage of total imports is being shipped by sea than by air because of three factors: an increase in the technology of containers, better scheduling of shipments and the economics of oil prices.
Mr. Mesa noted that "high air freight has pushed people into sea freight, and [freight] remains an issue and concern that digs into the margin for the grower." He added that the industry also needed to look into new ways to get product to the United States.
To help counter the high cost of freight, both Southern Specialties and Gourmet Trading have opened new distribution facilities that allow for more efficient control of product, which also translates into better service for their customers.
