California organic grapes, it is probably fair to say, have had a challenging 12 months. The 2023 harvest was 10 days later than usual, but a good-quality crop was expected in late June, early July. That was until Aug. 20 when Tropical Storm Hilary swept across California’s Central Valley, damaging vineyards and a good portion of the crop waiting to be harvested.
Although around 30% of the California crop had been harvested by the time Hilary struck, an estimated 20% of the remainder was lost when the storm tore across the region, according to John Pandol, from Delano, CA-based grower, shipper and marketer Pandol Brothers.
However, Pandol’s assessment is tempered by an apparently buoyant market, with organic grape sales growing by 8.3% in 2022, compared with the previous 12 months, to an estimated worth of $268 million, according to the Organic Produce Network and Category Partners’ 2022 Organic Produce Performance Report.
THE POST-HILARY CHALLENGE
For Mike Asdoorian from DLJ Produce, a marketer of both conventional and organic grapes based in Long Beach, CA, the last 12 months have been challenging, but not just for grapes.
“It seems like no matter what the commodity is, you talk to a buyer and, almost on a daily basis, they’re dealing with some kind of natural disaster or shortage,” he says.
In terms of organic grapes, Asdoorian says Mexico started around two weeks late due to a colder start than usual, but the biggest issue DLJ and many other suppliers have faced over recent months, of course, originated closer to home.
“I think we had one of the best quality starts this season — but then we got hit by Tropical Storm Hilary,” he recalls. “Typically, in the grape industry, you’ll start covering vineyards in late September, early October, so if there is any rain the grapevines are protected, but the tropical storm caught everyone by surprise. Every grower across the Central Valley was scrambling to cover whatever they could with plastic, but only a very small percentage of vineyards were able to get covered.”
The result, Asdoorian says, was a significant crop reduction, although he stresses there are still a lot of good grapes ready to be harvested.
“We’re talking about a 95 million-case crop and we see a 30% or 40% reduction, there are still 40 million or 50 million packages that are going to come to the market,” he argues. “It’s a disaster, but at the same time, there still will be California table grapes out there in retail for the next few months.”
DLJ’s response, Asdoorian continues, has been to focus on planning ahead, in particular, getting ready for the arrival of imports from Peru.
REASONS FOR OPTIMISM
Within the domestic market, Sunview is a family-owned business that operates several vineyards in California’s Central Valley. According to the company’s Phil Gruszka, Sunview does not contract out to other growers or grow outside of the U.S. but instead focuses on a California season that begins in July and runs through the close of the calendar year.
Despite the challenges Tropical Storm Hilary presented for all growers in the region, Gruszka says Sunview’s sales and quality have been good, with the company pleased with the progression it has made during 2023 to date.
“Sunview’s organic grape business has continued to grow in importance every year,” he says. “There are a growing number of consumers and retailers that are looking for not only organic grapes, but also other organic fruits and vegetables. Sunview was one of the first organic grape growers here in California and it remains a significant part of our business.”
For Gruszka, one of the biggest changes in the organic grape industry over recent years has been a significant movement in the direction of varietal development and renovation.
“There has been a shift in the entire table grape industry,” he says. “Older legacy varieties are being replaced by improved varieties. These newer varieties are improved because they are grown to be better tasting and have a better crisper texture than older varieties.”
In the case of Sunview, Gruszka continues, the company has availability of red, green and black organic grapes all season long. “The individual varieties and brands will change, but we are able to service our customers from the beginning of the season until the end uninterrupted,” he says.
DLJ’s Asdoorian also echoes this positive assessment, saying the growth in the organic grape category has prompted the company to expand its previously conventional-only Razzle Red and Dazzle Green brands to organic.
“This summer, we debuted our own organic bag for the first time in the Razzle and Dazzle organic brand,” he says. “That’s actually been a pretty significant boost for us because a lot of the retailers that were onboard before really like the design and it really added a lot having everything contextualized under one consistent brand.
“That’s been a pretty good bump for us, and something we are looking to grow.”
The red and greens are complemented by a Razzle-Dazzle bicolor pack and Snazzle-branded black grapes, all of which are drawn from allied growers in the U.S., Mexico, Chile and Peru. “We work with our partners in each growing area and pack a premium box fruit,” Asdoorian continues. “Our focus isn’t so much on varieties, but more on creating a consistent brand and eating experience.”
Pandol Brothers is another company that sources heavily from Mexico, bringing in Flame, Ivory, Sweet Celebration and Sweet Globe organic grapes from south of the border, as well as smaller amounts of half a dozen other varieties.
Pandol says volumes have been slightly lower over the past 12 months than they were during previous years, a trend he pins on stores rationing their SKUs, which he believes has been more apparent in conventional than organic. Pandol also believes there is more supply than market demand at the present time.
“In production, there are similar amounts,” he says. “We don’t see a lot of new people entering or any major organic players going out of business, so I don’t think the supply side has radically changed one way or another.”
THE RETAIL PICTURE
On the retail side, Asdoordian says the picture is divided by consumer profiles and locations.
“There are a lot of retailers in certain markets, especially out here on the West Coast, that can go completely organic or are only carrying organic grapes at a higher retail price because they have consumers with disposable income in more affluent communities,” he explains. “Then you have retailers that are more mixed: They’ll have mostly conventional, but they’ll also have a nice organic set to try and get some of that buy-up. And then you have retailers that say they have organic, but they’re not really buying it.”
Sunview’s Gruszka sees the organic fruit category growing in general terms across the entirety of the U.S. “The largest sales tend to coincide with larger population centers,” he says. “Organics are more established on the far West and East coasts, although we have seen significant growth in the Central and Southeast as well.”
For Pandol, much of the success of organic grapes in a retail environment depends on the willingness of a retailer to make speedy decisions. The appeal of the product, he argues, can suffer if a distributor leaves them in cold storage for longer than the necessary time, while he says in-store displays should be rotated on a timely basis to avoid “looking old.”
“If stores move too slow, they will have a lot of shrink,” Pandol says. On the distribution side, he adds, if stores use a dedicated organic distributor or wholesaler for their organic, “they will get better, fresher product with quicker rotation.”
Another challenge, Pandol continues, is the growth of private labels for organic, which he argues can sometimes work against suppliers.
“We see private label generally in produce, but the store labels are more robust in the organic sector than they are in the conventional sector,” he says. “Consequently, we see a lot of retailers that simply nominate one supplier, so it becomes ‘you’re in or you’re out.’ That’s kind of the problem there.”
To get the most out of an organic grape display in-store, Pandol recommends placing the products front and center in the produce aisles.
“Prominent placement is the most effective tool, because the price differential is not that much,” he says. “With some retailers, organic grapes are promoted as you walk into the produce department and conventional is further back. People see organic first and pick up the organic and very few go back to the conventional, because it’s not enough of a differential.”
While Asdoorian would recommend making the distinction between conventional and organic clear by maintaining them in separate areas, he suggests “being adventurous” when it comes to displays. In particular, he says opting for large end-caps of organic grapes can pay dividends.
“I think sometimes organics get pigeonholed into the back of a department — I think the best way of growing the category is taking a risk and finding an item each week and building larger displays in store,” Asdoorian says.