Picking peppers for profit - The Packer

Picking peppers for profit

12/03/2012 04:04:00 PM
Thomas Burfield

Bell peppers and chili peppers both are produce favorites with fan bases that are expanding every year.

Bell peppers rank as the fifth most popular vegetable, according to The Packer’s Fresh Trends 2012. And they ranked as the No. 3 item that consumers buy now that they did not buy previously.

produce retailer peppers Pamela RiemenschneiderFresh Trends says 67% of shoppers purchased bell peppers and more than 25% purchased chilies within the past 12 months. The likelihood of a specialty pepper purchase increased 10 percentage points over the previous year.

Colors abound

Most retailers offer green, red, yellow and orange bell peppers, but the lower-priced green variety generally is the best-seller.

Green and colored varieties both are popular at the more than 150 Tyler, Texas-based Brookshire Food Stores locations, says Keith Durham, category manager of fresh.

Green peppers are consistent sellers, but many shoppers prefer the perfect-looking colored ones that are grown in hothouses.

Brookshire sells packaged baby green and colored peppers, but those sales pale in comparison with bulk.

The chain features bell peppers on ad once or twice a month, with green ones priced at 2 for $1 compared with a regular price of 99 cents each. Colored bell peppers typically are priced at 10 for $10 on sale, compared with 3 for $4 regularly.

When they’re on ad, Durham merchandises peppers on end caps. Otherwise, they’re allotted 2 or 3 feet on a continental rack.

Durham says he often displays green and colored bell peppers together, even though they have different price points. He sometimes promotes peppers with yellow onions, cucumbers and squash.

Four-packs popular

A trend toward four-packs is growing at Angeli Foods Co., a group of three stores based in Iron River, Mich., says Gary Simonson, produce manager for one location.

The company sells bulk peppers and four-packs of colored peppers — usually two red, one yellow and one orange.

“The four-packs have really taken off,” Simonson says.

A year ago, 75% of Angeli’s pepper sales were bulk. Now they’re split about 50-50 between bulk and packaged product.

There’s less shrink with packaged peppers than with bulk, he says. They’re also easier to stack without damaging the product.

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The stores display bell pepper in sections about 5 feet deep by 4 feet wide.

Bell peppers used to sell better during the winter, but now that they’ve become popular for grilling, Angeli’s sells more during the summer.

Regular price for bulk colored peppers is $3.59 per pound. A typical sale price is $1.99 to $2.59 per pound. Green bell peppers usually sell for 99 cents each; they go for 2 for $1 or 79 cents each on sale.

Regular price for packaged peppers is $4.99, and a typical sale price is $2.99. Occasionally the store will get a good deal and price them at 2 for $5.

Buying in bulk

About 90% of the bell peppers sold by the County Market store in Macomb, Ill., are bulk, says Dave Beard, produce manger at the store, which is owned by Niemann Foods Inc., Quincy, Ill.

The store also offers tri-color packages of bell peppers.

At least one color of bulk peppers is on ad about once every five weeks, but County Market rarely advertises packaged peppers.

Beard says he’s noticed an increase in sales of red and yellow peppers, while sales of green peppers have remained consistent.

He attributes that trend to TV cooking shows that feature colored peppers and to prices that have been falling more in line with the greens.

Colored peppers now cost only about 80 cents more apiece than the green ones, he says. The price difference used to be in the range of $1.50.

Merchandising tips

“The pepper display can look very attractive with a lot of different colors, sizes and shapes,” says Mike Aiton, marketing director for Prime Time International, Coachella, Calif. “A good merchandiser puts them all together and promotes different peppers on a regular basis.”

The best bell pepper values usually are found around February and March, when Mexico’s production is at a peak, he says.

Consumers searching for something completely different may look for chocolate, purple or white bell peppers, says Robert Schueller, director of public relations for Melissa’s World Variety Produce Inc., Los Angeles.

Some shoppers may ask for them around the holidays, he says, but the market is small and focused on high-end, major-market retailers.

Retailers can use cross-merchandising to increase pepper sales, says Dionysios Christou, vice president of marketing for Del Monte Fresh Produce, Coral, Gables, Fla.

“Pairing peppers with fajita or shish kabob ingredients will encourage consumers to purchase and try pepper varieties,” he says. “Placing (point-of-sale) material and recipe cards in the produce department will also increase pepper sales and consumer knowledge.”

Chili choices

In the chili pepper category, the anaheim, pablano and jalapeno varieties are big at Brookshire Food Stores, Durham says.

Stores usually merchandise all chili peppers together, usually on a 6- to 8-foot table. Size of the display varies with the size of each store’s Hispanic customer base, he says. Stores that serve only a small number of Hispanic shoppers may have only a few small baskets of chili peppers.

The chain limits advertising on most chili peppers to holidays such as Cinco de Mayo. But jalapenos are an exception. They’re on ad once or twice a month.

In stores with a large Hispanic customer base, it’s important to have a good-size display of fresh chili peppers to compete with Hispanic retailers, he says.

“If you don’t have a good spread, you’ll end up with more shrink because no one will notice them,” he says.

Some Brookshire stores also offer half a dozen varieties of packaged dried chili peppers.

The chain used to offer bulk dried peppers, but the packaged peppers seem to sell better, Durham says.

Wide selection

Angeli Foods Co. offers red, yellow, jalapeno and poblano chili peppers on a regular basis and some others, such as the yellow banana chili, seasonally, Simonson says.

He displays chili peppers in baskets about 8 inches wide and 1 foot deep, and they’re merchandised above the bell peppers. They’re seldom featured on ad.

Simonson also merchandises four or five kinds of dried chili peppers on hooks on a display rack.

County Market only has a small chili pepper display, Beard says. The store offers only jalapeno peppers plus an 8-ounce bag of miniature sweet green, yellow and red peppers.

Beard also includes some dried chili peppers in bags on a display rack that also includes about 40 kinds of spices.

You can sell more chili peppers if you give them plenty of display space and promote them with other Hispanic items, such as tomatillos, white onions, romas and cilantro, says Bobby Creel, director of business development for L&M Cos., Raleigh, N.C.

However, chili peppers are becoming much more mainstream.

“It’s not just a Hispanic item anymore,” he says.

 

Pepper round-up

Brooks Tropicals Inc., Homestead, Fla., offers Scotch bonnets, one of the hottest chili peppers, says Mary Ostlund, director of marketing. They come in mixed colors — orange, yellow, green and red — and are used by some aficionados to create trademark salsas, dips, curries and guacamole. “They’re a nice way to spice up foods and make a dish that’s totally different,” Ostlund says. They’re available year-round in 8-pound boxes and in clamshell containers.


Del Campo Supreme Inc., Nogales, Ariz., will continue its elongated sweet red pepper program this winter, says Jim Cathey, general manager. The shade-house-grown peppers are especially popular “among chefs and ethnic groups looking for a pepper with some flavor to it,” Cathey says. The company also is experimenting with a small program of elongated sweet yellow peppers. Both deals will run from December into May.


Del Monte Fresh Produce, Coral, Gables, Fla., offers red, yellow, orange and hydroponic bell peppers in addition to green field grown peppers, says  Dionysios Christou, vice president of marketing. The company offers three-count bags containing three different colored peppers or three of the same colored peppers as well as a six-count bag containing three pairs of different colored peppers or six peppers of the same color.


L&M Cos., Raleigh, N.C., has increased its pepper volume, says Bobby Creel, director of business development. “We’ve made lot of improvements and upgrades to our packing lines and our cooling capacity,” he says. The company offers domestic green bell peppers, colored peppers from Mexico and several kinds of chili peppers year-round, including jalapenos, serranos, cubanelles and long hots.    


The Oppenheimer Group, Vancouver, British Columbia, plans to launch its Fair Trade pepper program in December, as volume of bell peppers picks up, says Aaron Quon, greenhouse and vegetable category director. Price Look-Up stickers on the product will indicate that for every box sold, 50 cents will go back to the workers who packed it to enhance their education, health care or housing, he says. The program runs from late December until May. This will be the third year for the program. Oppenheimer ships red, yellow and orange conventional and organic bell peppers in bulk containers as well as three-count, six-count and 2-pound bags.


Prime Time International Inc., Coachella, Calif., has the flexibility to pack any color assortments of bell peppers customers want, says Mike Aiton, director of sales and marketing. Some of Prime Time’s peppers are field grown; others are grown under protected agriculture. They come in bags of green, red, yellow and orange peppers. Miniature and organic peppers also are available. Aiton says Prime Time’s acreage is up slightly this year, and the company ships in reusable plastic containers on request. A variety of chili peppers is available during the spring.



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