Mushrooms rebound from recession - The Packer

Mushrooms rebound from recession

01/08/2010 09:51:00 AM
Tom Burfield

Apparently, a sluggish economy isn’t enough to keep consumers from scarfing up mushrooms. In fact, it looks like many actually are buying more mushrooms than they did a year ago.

Data from IRI Food Store Sales Research indicate that mushroom sales for the first half of 2009 were up 6.1% in dollars and 7.5% in pounds, according to the San Jose, Calif.-based Mushroom Council.

Courtesy Phillips Mushroom Farms

Workers pick mushrooms in a new facility at Phillips Mushroom Farms, Kennett Square, Pa. The facility has allowed the company to reenter the white mushroom deal after an absence of about 17 years.

The U.S. Department of Agriculture’s National Agricultural Statistics Service reported that the mushroom industry sold 679 million pounds of fresh mushrooms during the 2008-09 growing season, a number virtually unchanged from the previous year.

Sales of processed mushrooms reached 123 million pounds, up 4% from the previous season.

Most major grower-shippers seem to be weathering the recession fairly well, especially when it comes to retail sales.

“Despite an economic downtown, we are proud to report growth,” said Greg Sagan, senior vice president of sales and marketing for Modern Mushroom Farms, Avondale, Pa.

Consumers have spent more dollars at retail, he said, adding, “Our foodservice business has fallen off slightly.”

The holidays were busy, but January typically isn’t a big month for mushroom sales, said Fred Recchiuti, general manager at Basciani Mushroom Farms, Avondale.

“There’s always a letdown after the holidays,” he said.

Basciani sells to many foodservice operators but has been able to keep its business about even with last year’s despite the economic downturn, Recchiuti said.

“We’re just trying to hang on,” he said.

Despite the challenging environment of last year, Giorgio Foods Inc., Temple, Pa., did fairly well, said Bill Litvin, vice president of sales and national account manager.

“We are now in the process of expanding our packing facility to accommodate future growth,” he said.

Monterey Mushrooms Inc., Watsonville, Calif., has dealt with the recession by cutting back at all of its facilities, said Joe Caldwell, vice president.

“The market was oversupplied. The industry was oversupplied,” he said. “There was no reason for us to continue to push mushrooms out that couldn’t be sold.”

However, he said the company already is starting to put some of that square footage back into production.

Business is up significantly for Dole Mushrooms, said Gary Schroeder, director of Dole Mushrooms and president of Oakshire Mushroom Farm Inc., Kennett Square, Pa., which markets the Dole product.

The Dole label provides a marketing advantage because it is a tool that helps retailers sell more product, he said.

But the news wasn’t all positive.

Just more than a year ago, Quincy Farms in Quincy, Fla., announced that it was closing its mushroom growing facility that employed 490 people, and in early November, Creekside Mushrooms in Worthington, Pa., sent a letter to employees saying the company planned to lay off 260 workers, according to a local TV station.

Some other companies also were said to be in trouble, but Caldwell said the loss of domestic producers “probably won’t immediately impact the supply.”

Meanwhile, grower-shippers seemed optimistic for 2010.

“We expect 2010 to be even better than 2009,” Sagan said. “We are starting to see signs of consumer confidence rebounding, and with it, we expect recovery of the foodservice industry with consumers dining out more.”

At Giorgio Foods, Litvin said, “We expect business to be stronger in 2010 as the economy improves and the foodservice side of the business recovers.”

To-Jo Mushrooms in Avondale plans to add new products this year, said Paul Frederic, senior vice president of sales and marketing, and Phillips Mushroom Farms in Kennett Square is building a new plant and will increase its volume, said Kevin Donovan, national sales manager.

Caldwell said he expects the international canning market to tighten, which could affect the fresh market by prompting small, domestic fresh growers to sell to canneries if they can get close to the same money for their product.

“Within the next three months (these developments) could really tighten the market up substantially,” Caldwell said in December.

A similar situation arose a few years ago and had a substantial impact on the marketplace, he said.

“We don’t know if that will happen this year,” Caldwell said, “but the potential is certainly there.”

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