New varieties and growth will keep the U.S. consumer happy year-round.
Customers expect to find their favorite fruits on supermarket shelves on a year-round basis. Imports from Chile during the winter months helps to make this possible. In fact, North America is this South American country’s largest export market, with a growth of 3.1 percent in tonnage last season, according to data supplied by the San Carlos, CA-based Chilean Fresh Fruit Association (CFFA). The remainder of Chilean products are shipped to Asia, Europe and the Middle East.
“North American retailers have been buying Chilean products to satisfy consumer demand when domestic products are not available due to seasonality,” says Dionysios Christou, vice president of marketing for Del Monte Fresh Produce, N.A., Inc., headquartered in Coral Gables, FL.
What’s more, and in keeping with a greater demand by consumers for organics, some regions in Chile are now pre-cleared for shipping organically grown fruits to the United States, according to Eric Coty, executive director of South American imports for the Oppenheimer Group, in Coquitlam, British Columbia, Canada. “Chilean growers face the same challenges as potential organic growers everywhere: finding the balance between the investment involved in becoming certified to grow a lower yielding product with the possible returns.”
The main fruits imported into the United States from Chile during the 2015-16 season were grapes (39 percent), citrus (24 percent), apples (13 percent), stone fruit (9 percent), blueberries (8 percent), kiwifruit (3 percent), Hass avocados (2 percent), pears (2 percent) and cherries (1 percent), according to the Fruit Exporters Association of Chile (ASOEX), in Santiago. Of these, some of the more popular fruits shipped mainly during the winter months are grapes, stone fruit, blueberries and cherries.
“We see volume sales of Chilean grapes during the winter on par with California fruit during the summer,” says Will Wedge, owner of Will’s Shop‘n Save, in Dover Foxcroft, ME, and former director of produce for Hannaford Supermarkets, a 179-store chain headquartered in Scarborough, ME. “That’s because of the high quality and high brix of the Chilean grapes and seamless transition between countries.”
Chile is the Southern Hemisphere’s export leader in table grapes, with 47 percent of the country’s crop shipped to North America.
“Chile was way off last season in grapes due to weather conditions,” says John Pandol, director of special projects for Pandol Bros. Inc. in Delano, CA. “We think there will be about 10 percent more grapes and for North America about 15 percent more. The bigger ‘slice of the pie’ is largely a strong U.S. dollar and weakness in some other markets.”
Importers are expecting a five- to 10-day earlier start to Chilean grapes this season. “Pending vessel schedules to North America, we should have Chilean grapes into U.S. and Canadian retailers for the important December holiday season,” says Coty.
A federal marketing order requires all imported grapes to meet U.S. No. 1 standards by April 10. “The focus at the end of the Chilean deal is on red grapes such as Crimsons, because we have confidence of achieving U.S. No. 1 at this time,” says Brad Cantwell, vice president of sales for the Dole Fresh Fruit Co. Inc. in Westlake Village, CA.
Development of new grape varieties to be grown in Chile has been slower than what has occurred in California or Peru, says Steve Monson, category manager for sourcing, at Robinson Fresh, in Eden Prairie, MN. “Chile has been very careful to test varieties to make sure they will make sense from an economic standpoint. Many of the new grape varieties that work well in California and Peru do not work well in Chile. We have seen an increase over the past two to three years with the testing of a limited production of some new red and green seedless varieties in Chile. While mass production is still many years away, we should see limited volume of these new varieties over the next one to two years.”
“This season, consumers at store level will start to see small volumes of new grape varieties such as those of the Candy flavor lines, and new red varieties where the size, crunchiness and flavor are much better than the old varieties.”
— Victor Arriagada, Summit Produce
“This season, consumers at store level will start to see small volumes of new grape varieties such as those of the Candy flavor lines, and new red varieties where the size, crunchiness and flavor are much better than the old varieties,” explains Victor Arriagada, general manager for Fresno, CA-based Summit Produce, the U.S. arm of large Chilean exporter, Gesex. “We have been participating in several breeding programs in California, Spain, Israel, South Africa and Chile to find the right varieties for our production conditions and final market requirements.”
New varieties and packaging can help imported grapes compete during February to May, a highly competitive timeframe for the snacking fruit category, says Gina Garven, director of sourcing for Robinson Fresh. “One way to make grapes more convenient for consumers is through packaging.”
For the first time this season and due to customer demand, Robinson Fresh will pack 1.5-pound fixed-weight bags of grapes in Chile.
The majority — nearly 70 percent — of Chile’s fresh blueberry exports are destined for North America.
“We’ve seen tremendous growth in fresh blueberry exports from Chile,” says Karen Brux, CFFA managing director for North America. “In just seven years, fresh blueberry exports have risen by 119 percent, from 41,532 tons in 2008-09 to 91,038 tons in 2015-16. The estimate for 2016-17 is around 94,000 tons, about a 3 percent increase over last season.”
Chilean blueberry growers are shifting to newer varieties in search for better shelf life, taste and productivity, according to Lorenzo Venezian, president and chief executive for Berry Fresh LLC, in Dominguez Hills, CA. “Due to level of competitiveness, older varieties and poor quality fruit have already been taken out of the market. Transitioning to newer varieties is an ongoing process that has been happening for some time with a more generalized impact at the consumer level to be seen in the years to come.”
Among the company’s biggest efforts, adds Venezian, are advising retailers on the correct pack sizes and opportunity for successful promotions. “Thus, we see some retailers carrying at least two pack sizes and promoting from the end of December through February,” he says.
The retailers who are most successful with their Chilean blueberry promotions are the ones who get most creative, says Brux. “One retail customer built a blueberry display with a Willy Wonka theme. Remember the girl in the movie who turned into a giant blueberry? In store, retailers had a likeness of her floating above the display with little Oompa Loompas marching around it. It was definitely eye-catching, and it generated double-digit sales increases.”
Last season, Chile shipped 63,204 tons of stone fruit to North America between November and April, up 2.6 percent from the prior season, according to ASOEX data. Nectarines represented 38.6 percent, followed by plums at 35.7 percent and peaches at 25.7 percent.
This season, according to Summit Produce’s Arriagada, parent company Gesex will have new lines of nectarines, red fleshed plums and flat peaches. “Stone fruit was one of the highlights of last year’s Chilean season. More retailers than ever promoted it to their customers. In-store demos and contests took place during February and March,” says Brux.
However, according to Brux, considerable retail education is still needed. “There are still some retailers who don’t carry stone fruit during the winter months because they don’t feel the fruit is juicy or flavorful enough. Earlier this year, we ran first-time-ever peach demos at a major national club store. Even though there was a display of considerable size, many consumers just walked by it and headed to the customary winter fruits. Of those who tried the peaches, most were pleasantly surprised and bought a large clamshell. This coming season, if we can deliver that same quality, I expect we’ll see more retailers carrying and promoting Chilean stone fruit. Chile’s quality has been improving year on year, plus many retailers are bringing in ‘jet fresh’ or airfreighted stone fruit to deliver the best eating fruit to their shoppers.”
Chile is the world’s largest exporter of cherries in terms of value, with 86 percent of the crop headed to Asia and China, although volumes during the 2015-16 season decreased 19 percent mainly due to freeze and spring rains, according to Brux.
“Rains in mid-October generated estimated losses of 15 percent of the Chilean cherry crop, affecting mainly early varieties. The outcome of this situation for the U.S. market is probably similar overall volumes to last year or around 1 million (11-pound) cartons,” says Arriagada.
Some fruits warrant specific handling. For example, says Oppenheimer’s Coty, “Some stone fruit from Chile is tree-ripened, meaning it matures longer on the tree before harvest and then air-freighted to the market under special protocols. This fruit typically commands a higher price and delivers a better eating experience. It’s important that store-level employees recognize the difference and can explain this to shoppers.”
Summer In Winter Merchandising
Chilean products such as stone fruits can add a taste of summer to the Produce Department in the winter, says Brux. “There’s not a great variety of fruits available during the winter months, so Chilean stone fruit, for example, if displayed in a prominent position, will grab shoppers’ attention and pull them into the department. Retailers can use distinctive varieties, like the lemon plum, which is unique to Chile, to draw attention to the category and samples will generate purchases.”
Coty says one way retailers can educate customers about where fruits, traditionally considered for warm weather eating, come from during the cold months is to use point-of-sale and social media posts showcasing the story of the grower and the pristine beauty of Chile. “Adding a ‘human’ touch tends to minimize the miles in the mind of the shopper and engage a connection with the grower,” says Coty.
“As for display at retail, we recommend bright, festive displays focusing on the abundant harvest Chile has to offer the United States,” says Megan Schulz, director of communications for the Giumarra Companies, headquartered in Los Angeles.
When it comes to display size, Pandol Bros.’s Pandol says, “The golden rule of ‘never build a display bigger than can be maintained’ is especially critical in the winter. One must be more thoughtful about non-refrigerated secondary displays. If I could wave a magic wand and make the department 20 percent smaller in winter and add an extra helper to tidy up displays, that would be the approach.”
Del Monte’s Christou encourages retailers to develop secondary displays at checkout. “We find this helps to generate impulse buys and definitely plays a beneficial role in cross-merchandising. Whether the display is near the checkout lanes or next to a specific product that pairs well with Chilean fruit, our secondary display program has proven to be a success.”
Attractive pricing is a potent tool to move Chilean fruit in the winter.
“Fifty-eight percent of shoppers buy grapes at least once a week, with price being the number one purchase motivator. We’ve started seeing retailers run ‘per pound’ advertisements on fixed-weight items to create a low-price perception. It’s likely that we’ll continue to see advertising pricing get creative as our retailers introduce packaged items into their promotional mix to differentiate themselves,” says Robinson Fresh’s Garven.
Beyond price, some retailers get creative with promotions. For example, last season, General Produce, a Sacramento, CA-based produce distributor that handles retail services for chain stores, independent markets, warehouse stores, specialty retailers and military commissaries in four western states, ran a two-week promotion inviting followers on Facebook, Instagram and Twitter to show favorite ways to enjoy Chilean blueberries. The winner won a Fitbit fitness tracker.
“We were looking for ways to engage both consumers and industry on social media and what better product to do it than with Chilean blueberries, which in season, are a demand item with great versatility and promotional qualities,” says Linda Luka, director of marketing and communications.
“We also ran blueberries in retail ads, merchandised them on end caps, displayed Chilean blueberry point-of-sale materials and had ad cards, recipes and in-store demos. As a result, we had great success in increased case movement over the prior year, fun social media engagement and a lift in our digital branding,” adds Luka.
The CFFA, which assisted General Produce with its promotion, is an excellent resource for promotional assistance. For example, the Association produces a brochure with a chart of what’s available from Chile and when. In 2016-17, the CFFA will continue its successful partnership with Tajin, a chili-lime seasoning produced by Tajín International Corp., in Houston.
This year, the Chilean Blueberry Committee is partnering with U.S. Marketing Services, Tucson, AZ, to monitor blueberries at the retail level from November through March. Committee members will visit key regional and national retail chains in Boston, Philadelphia, Atlanta, Chicago, Houston, Sacramento, Toronto and Montreal.
Information gathered will include everything from pack sizes, price, country of origin and brand, to size of display, positioning in the produce department and types of blueberries (conventional and/or organic) sold.
Shipping Trends & Handling Tips
The Chilean industry, say importers, is continually looking for better, faster, ecologic and cheaper ways of transporting fruit to market. “With the widening of the Panama Canal, which will allow larger ocean vessels to travel through, we might see a shift from break bulk shipments to more container shipments from Chile,” says Steve Monson of Robinson Fresh. While there is no guarantee this will happen, in discussion with a few Chilean growers/exporters, they did indicate it was possible over the next three to five years to see a transition to more container shipments to the United States during the Chilean grape season.
Container shipments allow shippers to better maintain the optimal temperature and therefore fruit quality.
“On the handling side, cold chain control and distribution center rotation are by far the most important effort we try and transmit to our customers. We also educate about quality control aspects to highlight what issues or defects they should focus on to avoid poor consumer experiences,” says Lorenzo Venezian, president and chief executive for Berry Fresh LLC, in Dominguez Hills, CA.