Effectively Merchandise Southeast Peaches

Merchandising Southeast Peaches

Originally printed in the March 2018 issue of Produce Business.

Tasty summertime favorite expected to be one of the best crops in years.

The arrival of peaches is a sign of spring. The distinctive aroma emitted by peaches fills produce departments and draws shoppers. Consumers seek out the tasty fruit and retailers erect large displays to encourage shoppers to place more peaches in their shopping carts.

This season, Southeastern grower-shippers are eyeing a return to regular production. The rebound year follows a disastrous 2017, when freezes devastated up to 95 percent of Georgia’s and South Carolina’s peaches. Growers are energized about potentially harvesting one of the best crops in years.

Georgia production is increasing. In the past five years, the Peach State’s growers have increased acreage by 32 percent. “We are set for an awesome crop of peaches,” says Duke Lane III, a partner with Genuine Georgia Group, headquartered in Fort Valley, GA. “Everyone is excited. We have had a lot of collaboration in our industry. We think the future is bright for Georgia peaches.”

Rebound Season

Interest is heightened this season after a lack of Southern peaches on retail shelves last year. “As we have met with our retail partners throughout the country, there is a lot of excitement for Southern peaches this season,” says Daryl Johnson, vice president of sales and marketing for Ridge Spring, SC-based Titan Farms, one of the largest U.S. peach growers.

With chill hours returning to normal levels, there’s optimism about the triumphant return of Georgia’s peach crop, says Andrew Scott, director of marketing and business development for Nickey Gregory Co., an Atlanta wholesaler. “With the very cold winter we have had in Georgia, the Southern peach crop should bounce back significantly this year with an abundant crop,” he says. “The chilly days provide the cold temperatures that Georgia’s fruit crops need for healthy production this summer.”

There’s something sweet in the Georgia soil, says Matthew Kulinski, deputy director of marketing for the Georgia Department of Agriculture in Atlanta. “There’s no feeling quite like biting into a fresh Georgia peach,” he says.

Retailers, particularly those on the East Coast, have long experienced success merchandising Southeast peaches. Mark Kubler, senior category manager of fruit for The Fresh Market in Greensboro, NC, says last year was disappointing. “Peaches are a big item,” he says. “We get customer requests for Georgia and South Carolina peaches. Last year was a total flop. We had to say no. But this year, knock on wood, there should be plenty of Southeastern peaches.”

According to data from Nielsen Fresh, for the 52 weeks ending Dec. 30, retail peach sales were $418 million. About 94 percent of yearly peach sales occur from mid-May through mid-October, a sales peak that covers the Southeast’s May through September window. In mid-August, peach movement hit a weekly high of 12 million pounds, according to Nielsen.

Southern Differential

A big advantage of Southeastern peaches is taste. “Peaches from Georgia and South Carolina have great flavor,” says Mike Blume, director of sales and marketing for Greencastle PA-based Keystone Fruit Marketing, a division of Los Angeles’ Progressive Produce. “They are picked, hydrocooled and delivered to customers on the East Coast and in the Midwest within a few days, usually three to four days, so they can get to the customer a lot quicker.”

The Southeast maintains a strong reputation in peaches. South Carolinians like to joke how their state’s peaches are “two napkin peaches,” due to the juice that runs down a person’s chin, says Matt Cornwell, agricultural marketing specialist with the South Carolina Department of Agriculture, based in Columbia, SC. “The Southern peach is in itself a brand,” he says. “People look to the South in the summer for great peaches. In South Carolina, we have a perfect growing scenario for peaches. We produce better-eating and sweeter peach varieties than one can get in other parts of the country.”

Georgia’s peach industry has become emphatic about producing peaches with flavor, and growers are careful about the varieties they plant. “People know Georgia,” says Kent Hoots, a Genuine Georgia partner. “When they think of Georgia, they think of peaches. We use that as a brand that people recognize and get excited about and trust, which better engages shoppers.”

In late March, Florida growers typically start harvesting the first domestic shipments as Chilean fruit begins ending its run. Larger production from Georgia and South Carolina commences in mid-May, when Florida usually ends. Georgia’s harvesting typically ends in mid-August while South Carolina’s runs through mid-September.

“The season for Florida fills a void in the marketplace,” says Al Finch, president of Florida Classic Growers, the Dundee, FL-based marketing arm of the Dundee Citrus Growers Association. “During that April window, there is no other peach offered.”

Freight Advantage

According the most recent production tables published by the National Peach Council in Dillsburg, PA, California is the leading producer of fresh market peaches. From 2013-17, that state’s growers averaged yearly harvests of 570 million pounds. South Carolina, the leading East Coast peach producer, typically harvests 134 million pounds, while third-ranked Georgia typically sends 76 million pounds to the fresh market. North Carolina (9.8 million pounds) and Alabama (8.3 million pounds fresh) are similar in production. Florida’s production isn’t included in the national tables.

Southeast peaches help retailers by allowing them to merchandise a produce item that is delivered with fewer food miles, says Benjie Richter, a partner at Richter and Co. Inc., Charlotte, NC. “The Southern peach sells very well, especially in the eastern and Midwest United States,” he says. “Growers are within hours to 24 hours away from being in a retailer’s back door. It’s very hard for the West Coast to match that given the logistics.”

Transportation could affect Southeast peach demand. Many customers in the Midwest and on the East Coast carry California and Southern or Eastern peaches. “That could change a little this year because freight rates and rules may make it more difficult to ship peaches across the country in a timely manner,” says Blume. “You may see retailers leaning a little more heavily toward the Southern or Eastern peach, because of its closer proximity and less food miles,” he says.

Southeast growers ship peaches to customers throughout the eastern and Midwestern United States, from Florida to Canada, says Titan Farms’ Johnson. “With retailers’ desire to expand the peach category sales through multiple stock-keeping units and value-added packaging, Titan Farms is ready to meet this demand and expand our distribution of Southern peaches through our volume and packaging capabilities,” he says. “Our location allows us to provide great-tasting Southern peaches only days from the tree.”

The Southeast’s climate and soils help produce peaches with high sugar and acid content, producing a definitive flavor that may be lacking from other peaches, says Richter. “The fruit is grown where it naturally grows, not force-grown,” he says. “The climate is perfect for it. The Southeastern peach has good eating quality.” Over the past decade, the Southeast peach industry has made significant growing and handling advances, says Richter. Growers pick fruit at a certain maturity and the fruit eats well, he says.

Giant Displays Boost Sales

Genuine Georgia partner Will McGehee recommends erecting large displays at the entrance of the produce department. “When you’re displaying peaches, it’s important to have a spot up front,” he says. McGehee cites Nielsen data that shows rings for shoppers placing peaches in their baskets is 39 percent higher than those who don’t. “As a retailer, you really want to be known as a peach destination,” he says. “It’s very important because it draws the type of demographic that ends up spending more money at your store.”

“Southeast peaches are the best in the country. You would call it one of those first harbingers of spring. People look for them.”

– Mark Kubler, The Fresh Market

Large bulk displays have long been the dominant way retailers merchandise Southeast peaches. “Bulk displays sell peaches the best,” observes Keystone Fruit Marketing’s Blume. Off-refrigeration displays also work well, but subjecting fruit to warmer temperatures will start the ripening process. The benefit of ripening is the peaches produce a powerful aroma, he says. “But be careful, as merchandising off-refrigeration will shorten shelf life,” says Blume. “Make sure displays will sell through within a day.”

Huge front-end waterfall displays that feature label boxes underneath are effective in attracting shoppers, says Richter. “It’s very important we get a position in the store with the right price points,” he explains. “We push the fruit merchandising very hard with the buyers and merchandisers. We work closely with our chains by giving them the peak periods and telling them the good windows to promote.”

The Fresh Market likes to erect large displays. “Southeast peaches are the best in the country,” says Kubler. “You would call it one of those first harbingers of spring. People look for them.”

Genuine Georgia, a sales and marketing cooperative that represents the state’s five commercial peach farms, helps build and customize retailer-specific merchandising programs. The grower and marketer work with retailers active with social media, those who heavily use coupon or loyalty programs as well as stores wanting point-of-sale material. “Our data indicates consumers want Georgia peaches,” says Lane. The grower provides retailers with tools to call-out peaches and put them up in lights that scream “Georgia.”

Connecting With Retailers

Johnson advises shippers to work closely with retailers. “As the produce department increases the level of stock-keeping units, the job of the produce merchandiser becomes harder because the size of the produce department is not getting any bigger,” he says. “We need to work hand-in-hand with our partners to find ways to drive sales overall for their departments.”

The Georgia Department of Agriculture provides in-store signage and promotional materials to help retailers market Georgia’s peaches. The Georgia Grown logo ensures consumers looking for the unrivaled tastes of “Nature’s Favorite State,” the state’s marketing slogan, will receive an authentic Georgia Grown peach, says Kulinski. “Retailers have always pursued Georgia Grown peaches and other Georgia produce because customers demand the highest quality, genuine products,” he says. “Fruits and vegetables grown in Georgia are among the highest in reputation, whether they are Vidalia onions or Georgia peaches. That is what makes Georgia Nature’s Favorite State.”

A critical part of merchandising peaches is ensuring well-stocked displays. A large full display attracts purchases versus a display with only a few peaches, which doesn’t entice consumers, says Blume.

“If you think about how ‘miniature’ fruit has captured market share using brand marketing, it is easy to see how Florida peaches may be the next ‘Rockit’ apple or ‘Cuties’ or ‘Halos’ Mandarins.”

– Mindy Lee, Florida Department of Agriculture and Consumer Services

Knowledge of retail best practices is critical in proper merchandising. To reduce shrink and increase customer satisfaction, Titan Farms provides retailers point-of-purchase sales material, as well as best handling instructions for proper storage and display. “We stress to retailers that cold chain management is key; you do not want to store peaches at improper temperatures,” says Johnson. “It comes down to good communication and to what is best for the peach and ultimately, the consumer.”

For merchandising Florida peaches, Florida Classic’s Finch recommends smaller, refrigerated displays. If retailers can’t merchandise on a refrigerated shelf, Finch advises storing in backroom refrigerators and only displaying what retailers think they can sell that day. “Because it extends the shelf life of the product, keeping it refrigerated as long as possible is the key to merchandising Florida’s ready-to-eat peach,” he says.

Selling The Flavor

Florida’s low-chill hour varieties developed over the past 15 years have come a long way in creating a juicier peach that can withstand the rigors of commercial handling and shipping, says Mindy Lee, Florida Department of Agriculture and Consumer Services’ Fresh from Florida communications and media manager. Retailers have an opportunity to create a loyal following for Florida peaches, she says. “Understanding that it is smaller than other marketed peaches is key for success with retailers,” explains Lee. “If you think about how ‘miniature’ fruit has captured market share using brand marketing, it is easy to see how Florida peaches may be the next ‘Rockit’ apple or ‘Cuties’ or ‘Halos’ Mandarins.”

Richter and Co.’s Richter also recommends demonstrations. Providing sample slices encourages purchases, he says. “We have to sometimes get off our pocketbooks and share in demos,” he says. “Peaches are sexy. They’re good for merchandising. We can do this big display and buy big truckloads at a time.”

McGehee likens demand for Georgia peaches to growing interest in craft beer and comfort food. When someone discovers a Georgia peach, it’s something they can trust because it’s like a comfort food and something they’ve always heard about, he says. “We’re operating in the craft space, where everyone wants that localized touch, not a large, generic blob of peaches,” says McGehee. “It’s a specific craft supply of peaches called Georgia peaches, which resonates with changing consumer behaviors.”

Cross-merchandising is important. “We have found cross-merchandising to be very beneficial in driving increased sales,” says Johnson. Titan Farms has partnered with other fruit products in conjunction with bakery suppliers. “Use of club packs and bin displays at high store ‘pass-and-pause’ traffic areas create impulse sales that will help drive overall consumption,” he says.

Packaging Diversification Boosts Sales

Packaging and convenience trends, including pouch bags, are helping increase sales of peaches.

“Don’t cut back or eliminate bulk displays, but putting pouch bags near your bulk display will help increase overall sales,” says Mike Blume, director of sales and marketing for Greencastle PA-based Keystone Fruit Marketing, a division of Progressive Produce in Los Angeles. As many consumers like grab-and-go convenience, the pouch bags fulfill that need, he says.

Pouch bags and other value-added packaging are growing at a fast pace. Titan Farms of Ridge Spring, SC, is experiencing minimal to zero cannibalization of bulk sales when a retailer carries bulk and bags, says Daryl Johnson, vice president of sales and marketing. To drive sales by appealing to a broader and more diverse consumer segment, Titan Farms promotes 2-pound pouch bags, handle baskets and 4-pound club packs. “We are seeing a change in adding more packs to complement the bulk displays,” he says.

Genuine Georgia Group, which grows and ships from Fort Valley, GA, provides retailers 2-layer trays of peaches for bulk displays as well as 2-pound pouch options to be merchandised with the bulk. This allows retailers with large bulk peach displays to serve shoppers wanting to individually pick their fruit as well as those desiring quick grab-and-go packs, says Will McGehee, partner. “In a big peach display, retailers are able to break it up with two separate items,” he says. “We are finding those branded items are getting more and more real estate in the produce department.”

Wide Distribution Range

Southeast growers market and distribute peaches to customers throughout the East and Midwest. Because less-than-trailer-loads are more readily available from the South than from the West Coast, smaller customers can take advantage of fresh Southern peaches being delivered within a few days of being picked, explains Keystone Fruit Marketing’s Blume. Eastern Canada recently has increased its purchases and Richter has shipped Southeastern peaches as far west as Colorado, which also grows peaches.

Although the western parts of the United States logistically favor California fruit, in the Midwest, where freight isn’t as critical as on the coasts, retailers buy from California and the Southeast. “The flavor sells itself,” says Richter. “I would push Southeast peaches in certain markets where there’s a lot of West Coast fruit. Retailers could build a better base with the Southeast fruit.”

Alabama and West Virginia also commercially ship peaches. Alabama harvests May 10 through early August. West Virginia ships mid-July through Labor Day, starting at a similar time to New Jersey, which ships into September.

“In the South, everyone must be on board with peaches,” says South Carolina Department of Agriculture’s Cornwell. “If you’re (retailers) not promoting peaches and merchandising them well, you’re going to get left behind. Now more than ever, consumers are willing to bounce around and shop at different stores and markets. We encourage retailers to let shoppers know when this fruit is here. It will draw consumers. You don’t want to be left out of the game.”