Though hugely popular with consumers, innovative strategies are still required.
Excitement around grapes used to be seasonal in the years before the global marketplace made year-round enjoyment of the fruit possible. Today, retailers face challenges in selling grapes, not just during the domestic summer and fall seasons but also throughout the year.
Grapes continue to be among the most popular fruits. According to the United Fresh Produce Association’s Fresh Facts on Retail Year in Review 2018, grapes are the second-largest fruit category in dollar sales and are purchased by 70% of U.S. families over the course of the year. Still, volume and dollar sales are down, with the exception of two bright spots: the small specialty grape category and organic grapes. Increasingly available, organic grapes grew 43.4% in dollar sales and 54.6% in pounds, second only to growth in organic blueberries.
To maintain a dominant position, grapes require continued innovation throughout the supply chain, including at retail. The question is how to transition from a commodity mindset to a specialty mindset, from low pricing to premium, and from color to variety.
LOOKING BEYOND THE BIG THREE
Consumers typically differentiate grapes by color rather than variety. According to 2018-2019 data from the California Table Grape Commission, red grapes dominate shipments, accounting for about half of shipments over the season, followed by green (40%) and black (8%).
“Most consumers shop for green or red grapes, and they don’t know the difference in varieties within each color, although a few will ask for the classic Thompson seedless,” says Sal Selletto, produce manager at Super Foodtown of Sea Girt, NJ, a part of the Middletown, NJ-based Food Circus/Foodtown. “They want to know which color is the sweetest and the best seller.”
Derrick Jenkins, vice president, produce/floral division, Wakefern Food Corp. in Edison, NJ, finds customers come into the store knowing which color they want and generally do not switch. “However, when we run promotional circular ads highlighting other colors or different varieties, we see more acceptance from customers.”
Despite its traditional focus on color, produce industry veteran Dick Spezzano of Spezzano Consulting Service in Monrovia, CA, points out today’s grape marketplace is evolving beyond red, green and black into displays that could have up to eight different types of grapes at one time, including value-priced grapes in three colors, newer varieties and organic.
PLAYING TO POPULARITY
Just as specialty apple varieties have overtaken Red Delicious, newer types of grapes are displacing classics, such as Thompson Seedless and the seeded Globe. “Chile, for example, is shipping far less of varieties such as Flame Seedless [volume dropped 66% this season] and greater volumes of newer, more popular varieties like Timco [+50%], Sweet Celebration [+20%] and Allison [+84%],” says Karen Brux, managing director, Chilean Fruit Association, San Carlos, CA. “We encourage retailers to carry a number of varieties in order to grow their category. For example, we work with a number of retailers who love Muscat Grapes from Chile. The grape has a floral taste with a high brix level — 20 to 24 vs. 16 to 20 for most grapes – and color that runs from a rosy pink with a green background to golden-yellow.
“Because they’re such attention-grabbers and so popular with shoppers, retailers will often place them at the center of a grape display. As we see more of the newer varieties arrive from Chile, I think we’ll see more retailers highlighting a particular variety in their ad/display to help build their grape category.”
Brux adds that the Chilean table grape industry listens to North American customers and is moving quickly to supply more of the desired varieties. This past season, Chile shipped close to 100 different varieties to the U.S. market, with 32 varieties exceeding 100,000 boxes.
“Chile has more free trade agreements than anywhere in the world,” says Colin Fain, founder and chief executive of Agronometrics, Geneva, Switzerland, which is a market intelligence platform that collects, standardizes and presents daily prices and volumes of agricultural products from around the world. “This opens up opportunities to bring new grape varieties to consumers. Breeders seek out different varieties and look to expand growing regions in places such as Mexico and the Peruvian desert. This gives suppliers more flexibility and consumers more choice.”
SPACE AND MIX STRATEGIES
Bigger displays are better for grapes. Research conducted several years ago by the California Table Grape Commission showed that displays of more than 25 feet can increase sales up to 63% more than 18-foot displays, catching the eye of both intentioned and impulse buyers. The optimal display includes bagged grapes stacked no more than three layers high and clamshells stacked up to six layers high, depending on weight. Refrigeration is optimal.
“In our store, grapes used to be a small display, but now they are center stage with all colors displayed together,” says Selletto of Super Foodtown. “Domestic grapes sell better than imported, so they’ll get signage and a display to themselves. Also, organic grapes do very well when available. We will put them in a front-end display side by side with conventional so that shoppers don’t have to go to a different section of the produce department for organic.”
Imported varieties can be showcased with other fruit from the same country. “A number of retailers build large Chilean-themed fruit displays that include grapes also incorporate demos and recipe cards,” says Brux.
The evolution of the grape industry from seasonal in three colors to year-round with overlapping varieties calls for distinguishing one variety from another. Industry veteran Spezzano observes, “Retail has to make decisions about which varieties to carry. A display could include one value-priced grape in each color plus additional varieties that the produce team really likes in terms of flavor, size, and brix within each color. Then it’s important to describe the sensory characteristics of the grape — for example, big, crunchy and sweet. Consumers also respond to signage with stories about the grower, say, a third-generation farmer whose family farmed grapes on an island off Croatia.”
SEASONALITY OF MARKETPLACE
With the exception of a few weeks over the course of the year — typically in February and early May — consumers readily can purchase grapes year-round. Fain of Agronometrics explains that grapes sold in the U.S. market come from Chile in December to April, Mexico from May to early July, California from July into December and Peru from October to February or March.
“In early spring, grapes typically are coming out of storage from Chile and Peru,” says Brux. “This year, due to a number of factors that included the high volumes of California grapes still in market at the end of 2018, Chile shipped more volume later in the season. We typically have the strongest promotion focus in February and March, but this season it was March and April.”
“What distinguishes Mexican from U.S. grapes primarily is timing,” notes Earl McMenamin, Mexico program manager for Pacific Trellis Fruits in Los Angeles. “Mexican grapes are available after the last imported grapes and before California harvest starts up in July, although expansion of growing regions is lengthening the season for Mexican grapes. The 2019 grape crop from Mexico is up 34% from 2018.
According to McMenamin, “Standard varieties still prevail — Flames for red grapes, Sugarones for green and Summer Royal for black. Newer varieties have been planted over the past few years, increasing the volumes and in turn helping with promotions to move these larger volumes. Mexican grapes have moved away from being seen as a purely transitional solution but instead have come into their own as they gain popularity across the United States.” Pacific Trellis recently introduced a black seedless JAM grape that is cultivated in Brazil and available in the winter, as well as in May and June.
Fain says, “Buyers for retail chains can track the season’s supply and follow data on this year’s harvest rather than relying on data from last year. For example, this year’s crop from Mexico is particularly large and offers traditional varieties, along with a greater variety of shapes and flavors in proprietary grapes. These include a larger size, intensely colored red seedless and a sweet, large elongated green seedless. Organic varieties also are on the rise.”
Marketing suggestions from the California Table Grape Commission aim to help retailers draw consumers to, and lift volume in, the grape category: Use front page ads, promote multiple varieties, advertise weekly and discount price. It names printed circulars and in-store sales and coupons as top shopping resources for grape consumers.
Don Goodwin, president of Mound, MN-based Golden Sun Marketing, which helps clients across the supply chain develop and sell compelling strategies, says the expansion from commodity into specialty creates marketing conflict.
“Treating all grapes like a commodity won’t lift sales, and marketing on price and color doesn’t acknowledge the nuances of variety. So, shippers and retailers have to market the uniqueness and seasonality of the various varieties that might be available for just a few weeks — scarcity creates demand — and what differentiates one type of red or green grape from another. Comprehensive marketing should incorporate in-store tastings, well-signed displays, produce managers who can talk to shoppers and strategic digital ad campaigns.”
THE POWER OF PRICING
In 2018, grapes sold at an average retail price of $1.96 per pound, according to USDA data. “Among the three key factors that drive sales — availability, quality and price — price is what jumpstarts the category,” observes Goodwin. “Retailers who race to the bottom on grape pricing — for example, $0.99 per pound — will drive traffic but find it hard to capture value.” Goodwin points out that consumer expectations around pricing become a particular problem when selling specialty grapes, as these require higher retail pricing.
Spezzano calls attention to the importance of strategic pricing for optimal sales and margins. “During last year’s long California season, grapes priced at $0.99 per pound generated a huge lift in sales. But advertising just one variety at that price is more effective because advertising all three colors at a discount hurts margins. With clamshells, retailers can reduce price from $5.99 to $4.99 rather than $2.99, get good lift and good margins, and not destroy the entire category.”
PACKAGING SUPPORTS SALES
The transition in the 1990s from bulk to bagged grapes simplified grape buying for the consumer. “Customers love the convenience of being able to slide open a zippered bag and take out the amount of grapes they want without having to rip apart the bag,” says Wakefern’s Jenkins. “These bags also offer great packaging and artwork from the grower/shipper, and that helps drives product sales.”
Bags are particularly prevalent for commodity grapes, while clamshells dominate the specialty grape subcategory. Jenkins says clamshells labeled with the variety and carrying a UPC code help at the front end by making it easier for cashiers to differentiate between varieties of grapes and also to ring up the correct product.
Grower/shippers offer a wide range of custom packages, from bag to zippered bag to tote and also clamshells of various weights. “A display might have red, green and black grapes each in a zippered pouch, plus one or two red, green, or black specialty grapes in clamshells with a special message and premium price,” says Spezzano. “Retailers can request from grower/shippers a one-pound or two-pound clamshell pack, or maybe multiple varieties in a clamshell, or even snack-size packaging.”
As a supplier of imported grapes, Pacific Trellis stresses the importance of establishing, maintaining and communicating freshness. Supply-side requirements include picking, precooling and quickly shipping grapes across the border and directly to local retailers. The emphasis on freshness benefits retailers by enabling them to store and market adequate supply during promotional periods.
“Refrigeration throughout the supply chain, including in the store, is important especially for specialty varieties,” says The Grapery’s Jim Beagle. “Many are picked ripe and don’t have a long shelf life. That can be particularly challenging for imports with long transit times.”
SEEK OUT PROMOTION PARTNERS
Commodity groups and grower/shippers serve as ideal promotion partners to retailers for materials and marketing strategies. The California Table Grape Commission is actively sharing health messaging pertaining to grapes in consumer media, highlighting the health benefits of their antioxidants and natural plant polyphenols. It also is promoting the heart, brain and digestive benefits of grapes. On the retail side, the Commission suggests displaying cheese or crackers in the grape display, creating picnic-friendly packages of grapes and other fruit, and adding grapes to ready-cut vegetable salads.
“Our usage ads for this year will focus on the portability and ease of incorporating California grapes as the perfect snack at home or on the go,” says Jeff Cardinale, vice president communications.
Brux points out: “The Chilean Fruit Association has three amazing merchandisers who work with retailers big and small throughout the United States and Canada to develop unique, integrated promotions.
“We offer numerous point-of-sale cards, danglers, recipe cards and photos/usage videos for retailers to use on their social media channels, but that’s just where it starts. For some retailers, that might mean a digital coupon with accompanying Facebook posts about grapes. For others, it might be kids cooking classes accompanied by a hot ad, or a March Madness basketball-themed online and in-store promotion encouraging shoppers to “score big” with Chilean grapes.”
“I use a lot of POS and promo materials that organizations and vendors send me, such as signs, banners, posters, and recipe cards,” says Super Foodtown’s Selletto. “The materials look good, and they attract business. I also do a lot of promos with children. Giveaways such as coloring books create excitement among kids, and their parents who are buying the grapes. Keep them coming.”