New transportation arrangements, like the ‘Blueberry Express,’ are expected to correct logistics logjams.
Originally printed in the November 2022 issue of Produce Business.
Once again, Chilean fruit is arriving, enabling consumers to enjoy the taste of summer through the winter months. And Chilean fruit marketers provide retailers with a plethora of ideas to merchandise Chilean fruit.
Fernando Soberanes, division manager of the Long Beach, CA, Giumarra Cos. Inc. office, says when it comes to merchandising, Giumarra works with retail customers “on a tailored approach to meet the retailer’s goals and accommodate any in-store display policies. We offer customized signage and additional materials to support their merchandising goals.”
As branded produce continues to dominate the produce snacking category, Kelsey Van Lissum, marketing communications manager at The Oppenheimer Group, Vancouver, BC, says Oppy represents Chilean fruit in one of the most recognizable produce brands: Ocean Spray. “Appealing to younger shoppers aged 18-34 and present on more than 50 SKUs across the store, increasing brand visibility and credibility, Ocean Spray branded produce is perceived as high quality and stands out from the others on the shelf,” she adds.
Van Lissum adds that displaying “unique Chilean items such as lemon plums alongside educational tools like ripening stages is also very effective.”
Oppy offers retailers a variety of promotional tools, from POS, posters, header cards, display bins, social media content and an array of innovative packaging solutions.
“We also love the materials created by the Chilean Fresh Fruit Association, which help shoppers recognize the freshness of this fruit in season.”
Van Lissum says country of origin is “an excellent tool to use in the retail space. Considering Chile’s wide variety of microclimates, there is much to offer from this diverse country.”
Likewise, Van Lissum adds, signage promoting “delicious summer favorites from overseas during the chilly winter months should undoubtedly be touted to the consumer. Campaigns such as ‘summer in winter’ and South American displays are great ways to attract shoppers and drive purchase.”
Jim Roberts, president of sales for Naturipe Farms in Salinas, CA, says some retailers may promote Chilean fruit as its own category, however, “all of Naturipe’s retailers are just as excited as we are to offer customers new proprietary varieties that are being planted in all of our production regions — including Chile.”
AVOCADOS A SLICE OF CHILE
Joe Dugo, director of business development, Naturipe Avocado Farms, says Chilean avocados have an “excellent flavor profile and complement retail and foodservice programs in the U.S. market. In recent seasons, the Chilean avocado volume for the U.S. has been somewhat limited due to weather-related issues, so the Naturipe team is dedicated to planning well in advance for Chilean avocado opportunities with our valued customers.”
Most of their avocados are sold in bulk or individually, “so we just use Naturipe PLUs on this fruit.” The category has seen its strongest growth with bagged offerings, he adds. “We can also add consumer education material on these bags to include recipes and nutritional facts.”
Chile ties in well with Naturipe’s six-year-old Peruvian avocado program, which does not overlap with Chile. Peru finishes in early September and Chile starts harvest in mid to late September, running through January.
With avocados, price is driven by supply and demand, like most other fresh produce items, Dugo explains. “Pricing is dictated by the overall supply of fruit in the marketplace at any given time. Chilean fruit will be on par with the pricing of the other origins in the marketplace, as its quality is second to none.”
CHILEAN GRAPE OUTLOOK
As to Chilean grapes, Mark Greenberg, president of Capespan North America Inc., based in Montreal, Canada, credits Chile with continuing its transition from “traditional varieties to new propriety varieties, such as from IFG and Sun World. That is a good thing. I expect good fruit. I hope the season is better and has fewer logistics tie-ups and challenges.”
Greenberg notes the Chileans had a difficult 2021-22 season, which will impact the volume produced for all markets this season. “But I’m optimistic they will do a good job.”
Retailers promote Chilean blueberries during their window of production, which is typically December to March, according to Naturipe’s Roberts. “We also recommend that retailers spotlight all the benefits of blueberries — they’re packed full of antioxidants, they’re high in manganese, and they’re a great source of fiber.”
Naturipe’s stance is that in-store promotion strategies ultimately are for the retailers to decide. But, he adds, “We find that the bright, vibrant berries naturally remind customers of the tastes of summertime. Promoting the berries showcases that our berries are always grown fresh and in season, thanks to our wide variety of production regions.”
Country of origin information is shared on Naturipe packaging. “Consumers can also visit our website and review peak growing seasons to see where their berries have come from at different points in the year.”
The Chilean Blueberry Committee indicated, in its first seasonal forecast Oct. 17, that Chilean fresh blueberries will have an estimated volume of 98,228 tons for the 2022-2023 season. Small shipments to the U.S. market were underway in mid-October and expected to continue through February.
This estimated volume is an 8% decline from last year. “This has resulted primarily from the Chilean blueberry industry’s intense focus on providing only the best quality blueberries to its export markets,” according to the published forecast. “The industry is undergoing extensive variety renewal, with some varieties being shifted into frozen exports and other industrial uses. At the same time, growers are planting new varieties with better post-harvest conditions that will allow the fruit to arrive with the full flavor and sweetness characteristic of Chilean blueberries.”
With peak arrivals expected around the last week of December or first week of January, the blueberry committee’s U.S. marketing team “is working with retail chains large and small to design programs that will drive Chilean blueberry sales. Trade promotions will commence by early January and continue through February.”
The blueberry group indicates Chile’s main market for fresh blueberries continues to be the U.S., which is receiving 54% of total volume.Chile ships 75% of all fresh organic blueberries to the U.S. During the 2021-22 season, 22% of all blueberries shipped to the U.S. were organic, and 78% were conventional.
Van Lissum said Oppy foresees “continued growth in our berry category, including with our Chilean blueberry crops.”
Conversely, Naturipe’s Roberts indicates volumes have been trending down from Chile for conventional blues, but “we’ll see another strong year of growth on our organic blueberry program, allowing for organic ad promotions.”
“We usually see high demand for both organic and conventional blueberries at this time of year.”
Helena Beckett, director of sales, Giddings Berries USA, Monterrey, CA, said her firm imports both organic and conventional blueberries. For Giddings, these primarily go into the Northeast U.S. Beyond the U.S., Giddings also exports indirectly to Asia.
Beckett says Giddings’ Chilean blueberry crop is faring well.
“At beginning of this (Chilean) season, which will be in late November or early December, we will ship our premium label, Celestial,” Beckett explains. “We offer jumbo and organic blueberries under the Celestial label.”
Giddings’ Chilean berry exports will arrive in the U.S. until the end of February. Some of the Celestial brand is air freighted to select customers.
THE PERU FACTOR
It is common for conversations regarding Chilean fruit to swing north toward Peru.
Soberanes of Giumarra delicately notes that “Chile has had a long history of exporting fresh produce to the U.S., but we have also seen other South American countries recently paying more attention to the U.S. market.”
Roberts said Naturipe’s Peruvian and Chilean operations complement each other. “An increase in Peruvian production has caused us to rely less on high Chilean volumes. However, Chile is still a very important area for organic blueberries because they fill the gap in supply between when Peru finishes production and before Florida, California and Mexico start production.”
Referring to the winter grape deal, Greenberg said Capespan “will focus on Peru in the early season, and transition to Chile and South Africa in the new year.”
Giddings was importing at Peru’s peak blueberry season in mid-October. Peruvian blueberries will arrive until the end of January.
Beckett notes the Peruvian fruit has the advantage of what is essentially five or six fewer days at sea.
Oppy produces avocados, berries, citrus, ginger and grapes in Peru. Van Lissum says this is “part of our expansive portfolio that offers our customers a variety of exceptional produce during the winter season. These complements are positioned well for many global markets. Industry trends continue to show Chile revitalizing its offerings as Peru grows and “we are proud to represent fruit from both regions.”
In October, the USDA announced a potential phytosanitary rule change that, if it survives the public comment period which ends in December, may help Chilean growers compete with Peruvian grapes.
Several leading Chilean production areas have required fumigation for grapes. This harms the fruit shelf life and slows entry to market. Peruvian growers do not face that hurdle. But with new rules, many Chilean growers will be freed of fumigation problems.
SOUTH AMERICAN FRUIT COLLISION
Because of the similarity of the Peruvian and Chilean deals, over the last two shipping seasons, overlaps created port delays in the U.S. Late in 2021, it was double trouble, as Peru’s fruit harvest ran late. At the same time, U.S. ports on the West Coast were jammed. So, Peruvian shippers shipped greater-than-expected fruit volumes to Delaware River seaports, while relying on often unreliable schedules from container ships. Fumigators were clobbered with huge, surprise volumes, and February and March were a mess in Philly.
As a result, the Chilean industry quickly moved for improvements for the 2022-23 season.
In July 2022, Chilean blueberry exporters reached an agreement to implement a charter service to the U.S. market called the “Blueberry Express.” This special service will begin in Week 49 and continue throughout the 2022-23 season. The service will allow transit times below two weeks to the U.S. market.
The Blueberry Express service, which will be available to the entire industry, includes charter ships, in which a percentage of the cargo will go in refrigerated warehouses, as has been the case for years with other commodities, such as table grapes. It guarantees the maintenance of the cold chain, which is crucial for protecting fruit quality.
Beckett said Giddings is shipping to Philadelphia this year aboard the Blueberry Express. The speedy logistics will be a relief as the ships will be on time and cooperative. “When they’re three weeks late, you panic,” she notes.
Roberts of Naturipe says with the increased production from Peru on both conventional and organic blueberries, “nearly all of the blueberries we ship from Chile will be ocean containers, which is why we are so excited to have the Blueberry Express service.”
However, Capespan’s Greenberg notes, “People transitioned years ago from break bulk to containers because containers were cheaper. Recently, containers became very expensive, and the economics of break bulk changed. Until refrigerated container rates come back to earth, we prefer break bulk.”
Logistics are also a concern for Giumarra. Soberanes says they’re exploring “all available routes and points of entry to the U.S. to find viable solutions to keep our West Coast retailers consistently supplied.”
From Naturipe, Roberts expects to see “significant improvements this year overall with the addition of the Blueberry Express service that we will be using on both the East and West Coast, which will get imported blueberries to the United States significantly quicker than ever before. This will have a positive impact on the shelf life and quality of the fruit. We are extremely excited to be able to have this new service available and what this will mean in terms of a better eating experience for the consumer, as well as improved results for our growers.”
• • •
Longtime industry expert shares Chilean grape merchandising tips
John Pandol’s family was a long a leader in the California fruit deal. This tradition positioned the company for leadership 50 years ago in developing the “new” Chilean deal.
Pandol, director of special projects for Pandol Bros. Inc., Delano, CA, shares these retails tips in merchandising Chilean grapes:
- Older grapes. Chilean grapes have a longer supply chain and are much older than grapes from Mexico or California when they reach the store. For your five or six months of offshore supply, understand there will be more cullage and more shrink. Budget labor accordingly.
- The myth of brown stems. Many consumer guides suggest consumers choose only grapes with pliable bright green stems. Fact: Studies have shown the stems of different varieties brown at different rates and have little to do with the eating experience of the grapes.
- Display: Refrigerated versus non-refrigerated. Nothing is wrong with non-refrigerated displays. However, keep an eye on sales velocity, cull grapes left behind and keep it well stocked. Grapes will last longer under refrigeration. This brings less shrink, but requires more expensive fixtures and energy costs. Consider a refrigerated grape display with a promotional grape item on a secondary non-refrigerated display.
- Display fixtures. Should they be on the tables, vs. on the wall, vs. the glass? Grapes are impulse items. Open cases lend themselves to the best display visibility and give shoppers the easiest access to pick up the grapes to have a better look. On-the-wall refrigerated shelf cases are less appealing and more difficult to rotate. Bags stuffed in the back of the bottom shelf are not as good as the higher shelves. And black grapes against a black metal background? Be conscious if the orientation of the packaging shows the fruit and labeling in an appropriate way. Behind the door, as retailers have implemented or localities have regulated sustainability measures, closed door displays (like soft drink cans in a C-store) are starting to show up in produce departments. This very recent development gives low visibility and view of the product is the most restrictive, so package and label orientation is critical.
- Managing out-of-stocks: Out-of-stocks happen for a variety of reasons, but they do happen, and you need an action plan. If the out-of-stock is expected to be short term, leave the space blank with a sign that says: “Sorry, not in today, but don’t worry, it’s on its way.” Do you have a rain check policy or not? That is the place to put it. Longer out-of-stock? Spread out the rest of the grapes, use it for another produce item or maybe even a non-produce item. DO NOT place another item but leave the original signage in place.
- Resilient supply chain. Diversify suppliers periodically to evaluate suppliers for reliability. Some of the worst cases I see are big suppliers making big programs with big retailers, and the display is filled with old or off-grade grapes. Or after they take the order, the supplier co-packs with cats and dogs. Wholesalers can play an important role as part of a resilient supply chain.
- Are you selling a variety or a commodity? Should grapes be merchandised like apples or like berries? No right answer. Is a variety a feature or a benefit? Just because the variety name is on the package does not mean that is what drove the sale, so don’t be fooled by some of the category data floating around. On a B2C level, consumers are still largely buying red or white or black seedless grapes. On a B2B level, we’re largely variety specific, although we are seeing a wane in those using variety as the primary determinate of what to buy. We have seen many retailers very successfully use variety neutral buying, with or without branding. In fact, some shippers with big ‘new variety’ programs also have variety neutral programs.
- Golden rule. Never plan a merchandising program that cannot be properly executed. Do what’s right for your store.
Golden rule. Never plan a merchandising program that cannot be properly executed. Do what’s right for your store.
- Packaging. Friend or foe? Clamshells are up. Retailers look jealously at the club store large-size package business and are increasingly stocking 2- and 3-pound SKU’s. With regards to new packaging with heavy sustainability attributes, be very cautious. The mission statement of packaging is to contain, protect and preserve the quality of the contents. Many of us lived through the nightmare of PLA packaging being hastily used in many applications for which it was unsuitable. We use the plastic and the films we use because these materials work. Be cautious about insisting on a new packaging material with some sustainable claim just to check a box on some corporate sustainability reports.
- Display in the original box or stack it on the shelf. Keep in mind that not every five down carton is necessarily display ready. Remember, imported fruit has much more interior packaging, and you will need to budget more labor than for California fruit.
- Active sampling versus passive sampling versus allowing tasting versus no tasting. Sampling drives purchases. All these techniques can be used and have their place. A retailer that reintroduced sampling in baby steps about 18 months ago, stopped if he got pushback from individual consumers or the local health department, but in most stores the sampling was successful. Remember all those experts on Zoom calls who said sampling is dead? They were wrong.
- Make your own bag. Is the 2.1-pound average bag too much in an era of inflationary grape prices? Maybe. But we are seeing store signage giving permission to buy less than a bag. Some request the shopper have store personnel do it.
- Have systems to accommodate non-scannable codes. Once in a while old or poorly printed bar codes show up. Have a procedure to deal with it rather than be out of stock with grapes in the back room.
- Package consistency versus a yard sale. Consumers go through analysis paralysis when too many options are available. Use your own clear for grapes and other produce store-branded bags — great for taking advantage of opened clamshell! Part of the shrink and food waste problem are inflexible systems.