Imported sweet onions help keep retail shelves stocked, profitable during fall, winter.
Originally printed in the September 2021 issue of Produce Business.
During the winter, shopper choices for the flat-shaped sweet onions, the same unique shape as Vidalia sweet onions, can be limited. Retailers who want to satisfy shoppers must import sweet onions from Peru, the major fall and winter supplier of sweet onions.
Because they begin shipping in August and September, at the end of Vidalia shipments, Peru sweet onions often accompany many fall and winter events and holidays. They can be a key ingredient in many shoppers’ holiday recipes, as well as football watch parties and family gatherings. Effectively merchandising this basket-building item can help a retailer increase onion sales and boost sales of other produce items.
While onions represented only 3.5% of the most recent fourth quarter produce sales volume, they contribute about 5% of the margin dollars, states Brandon Bentley, category business manager-vegetables for Tops Markets, based in Williamsville, NY. “Peruvian onions are huge for produce during the fall and winter,” he says. “Locking this category down can be the difference in a successful overall season.”
“Peruvian onions are huge for produce during the fall and winter. Locking this category down can be the difference in a successful overall season.”— Brandon Bentley, Tops Markets
A benefit of sourcing Peruvian sweet onions during the fall and winter is the growing region’s improved product. “Over the years, Peru’s reputation has gained prominence,” says Mark Breimeister, sweet onion specialist with Potandon Produce LLC, Idaho Falls, ID. “Because they ship longer than the Vidalias, Peru sweet onions are a cornerstone of our sweet onion business, right after the Vidalias. We think of them as of equal importance to the Vidalias.”
According to the U.S. Department of Agriculture, Peru accounts for 23.7% of fresh onion imports to the U.S., second to Mexico (62.3%). In 2020, Peru exported 315 million pounds of onions to the U.S., higher than the $305 million four-year average. The value of exports is at $64 million, the highest in recent years and higher than $51 million in 2017.
“Fall and winter sweet onions are important for retail sales, as there is a demand for sweet onions year-round,” says Troy Bland, chief executive officer of Bland Farms LLC, headquartered in Glennville, GA. “We have found that consumers crave the sweet flavor that our onions provide year-round. We do, however, feel that it is important to build up excitement and anticipation around each season to keep shoppers interested.”
KEEP THE BALL MOVING
Peru sweet onions help maintain sweet onion sales momentum, says Matthew Gideon, sales and commodity manager for Keystone Fruit Marketing, Greencastle, PA.
“Our Peruvian sweet onions are an integral piece of our year-round sweet onion program,” he says. “Over the past several years, demand for sweet onions has been steadily increasing. This demand has been fueled by increased consumer awareness and growing popularity of sweet onions.”
Sweet onions account for 25% of onion category dollar sales, second only to yellow onions, which constitute 28%, according to NielsenIQ. In unit sales, sweet onions are the third leading onion category, at 20.4%, behind yellow onions (25.8%) and green onions (22%), according to NielsenIQ.
“Sweet onions should not be considered only in the summer with domestic sweets, but capturing sales year-round to continue to drive both sales and volume for the category with this versatile onion,” notes Walt Dasher, vice president of G&R Farms, Glennville, GA.
“The important part of sweet onions in the fall and winter is to not stop promoting or think of them as less important than summer sweets. Sweet onions drive sales year-round and should be promoted accordingly.”
“When sweet onions are in consumers’ market baskets, they are more likely to purchase fresh beef, tomatoes, potatoes, squash, mushrooms and peppers.”— John Shuman, Shuman Farm
Sweet onions, overall, help spur sales of other produce aisle items. “The added bonus to Peruvian onions during the fall and winter months is that rarely are they the only thing in the basket,” says Tops Markets’ Bentley. “When is the last time you noticed a customer walk into a retailer, grab a bulk or bagged sweet onion, and head directly to the register? They accompany so many dishes that they might be considered the original ‘affinity item.’”
John Shuman, president and chief executive officer of Shuman Farms, Inc., Reidsville, GA, agrees Peru sweet onions help fill shoppers’ carts. “When sweet onions are in consumers’ market baskets, they are more likely to purchase fresh beef, tomatoes, potatoes, squash, mushrooms and peppers.”
HIGH MARGIN PLAYER
Onions, in general, are a fairly good margin item for a retailer, observes Potandon Produce’s Breimeister, and sweet onions afford the retailer another 10%-20% margin over regular onions. “Sweet onions still offer the retailer the ability to mark the products up, double the cost, at 100% markups or more. Retailers are able to run those promos and make some money.”
Because of their higher ring, Peru sweet onions bring in more gross revenue to a retailer than a conventional storage onion, says Breimeister.
“If you’re selling your conventional storage or Western jumbo yellow onion at 79 cents a pound, you’re bringing in sweet onions and selling at $1.29 a pound. That’s significantly more revenue going through the cash register,” he says. “At the end of the day, if you’re collecting more money on that sweet onion at the cash register, it’s better for your overall cash flow and revenue.”
Sweet onions present an opportunity for incremental produce sales, if properly merchandised, notes Gideon. Due to increased demand, many retailers have found it profitable to carry bulk or loose jumbo sweet onions as well as a consumer bags of medium sweet onions, he says.
“End caps, stand-alones, value-added product offerings, multi-size strategies and consumer bagged displays offer consumers multiple buying options and ensure sales lift,” says Gideon.
He recommends using point-of-purchase materials and signage that showcase the nutritional benefits and flavor of sweet onions. Featuring pictures, biographies or histories of growers (real people) who produce sweet onions are also effective marketing strategies, as are in-store demos, recipes, and information emphasizing quality, flavor, nutrition and food safety differences of authentic sweet onions over regular cooking onions, he adds.
“Sweet onions still offer the retailer the ability to mark the products up, double the cost, at 100% markups or more. Retailers are able to run those promos and make some money.”— Mark Breimeister, Potandon Produce
Shuman Farms’ Shuman encourages retailers to build cross-merchandising displays in the produce department as well as the meat department to take advantage of consumer buying habits and to drive incremental sales. “The top three dishes that sweet onions are found in are salads, ethnic dishes and beef dishes.”
Adding new locations also helps spur sales. “We recommend putting our 40-pound display bins in different areas of the stores to help drive sales,” advises Bland. For example, in the meat department for shoppers preparing weekend cookouts or tailgates. “We have found that these bins drive sales, as they are easily seen by customers.”
Displaying Peru onions in their shipping cartons can help promote sales. “Utilizing finger wings or satellite displays with wooden or even original boxes in other departments, where relevant, can increase sales and profits,” says Bentley. “Being a basket-building item, promoting these in line with other department loss leaders is a great way to profit-proof displays. Deep discounts are not really needed as they are needed to finish the dish.”
With sweet onions, simplicity matters. “It’s important to make the consumer shopping experience easy,” advises G&R Farms’ Dasher. “Make displays easy to shop and provide neat displays.”
Secondary displays and bins also offer opportunities for promotion with like basket items. “Highlighting sweet onions with sweet potatoes, white potatoes, stuffing and more can make a one-stop shop and inspiration center for consumers,” he adds. “Keep them prominently on display and keep displays full and regularly promoted. Consumers will continue to buy sweet onions — it’s your job to make them available.”
Shuman Farms notes how importing Peruvian sweet onions through the Port of Savannah, the fourth busiest and fastest growing U.S. container port, benefits the Southeastern economy and allows Shuman Farms “to maintain a full-time local workforce in southeast Georgia, providing American jobs 12 months of the year,” says Shuman. “In addition to the positive economic impact in our own backyard, importing our sweet onions through the Port of Savannah supports over 440,000 jobs in the Southeast U.S. The economic contribution the Georgia ports provide is especially important to our retail partners in the Southeast as they are able to put local economic sustainability into action.”
“End caps, stand-alones, value-added product offerings, multi-size strategies and consumer bagged displays offer consumers multiple buying options and ensure— Matthew Gideon, Keystone Fruit
America’s changing demographics, including a larger ethnic population, has been the main driver of onion sales, notes Breimeister.
“With the diversity of ethnic cuisines, you now see onions used in 80% of recipes,” he says. “Those recipes are lifting all ships, so to speak, with the onion category. There are so many other cuisines that are fairly new to the American palate. They call for a lot more onions than some of the old-school foods we used to do.”