Sales hold steady despite tightened spending - The Packer

Sales hold steady despite tightened spending

02/05/2010 02:17:53 PM
Cynthia David

Despite fears the recession would take pineapple sales with it, growers and shippers appear encouraged by last year’s results, and predict a good, if not interesting, year ahead.

“Because pineapples are generally considered a luxury purchase, we expected the tough economy to downwardly affect the market, but we didn’t see that,” said Bil Goldfield, communications manager for Westlake Village, Calif.-based Dole Fresh Fruit.

“We expect 2010 to be a very competitive year in terms of volumes and sales,” Goldfield said, “and we would be very happy to repeat 2009 results.”

Ken Nabal, vice president of sales and logistics for Edinburg, Texas-based Frontera Produce Ltd., is also encouraged by sales to date.

“It’s not a struggle to sell pines,” Nabal said. “Last year at this time it took a little longer, ’til the end of January, to get going. Valentine’s Day and beyond is typically the core of sales.”

Weather slows production

Increased demand in North America and lighter supplies because of cold, wet weather in the tropics have combined to strengthen the market, said Alan Dolezal, vice president of sales for Turbana Corp., Coral Gables.

Temperatures in Costa Rica reached low enough levels to trigger natural flowering, which always results in some erratic production swings, Dolezal said.

“Based on that as well as other factors, we should be in for an interesting time for the balance of the winter and into spring and early summer,” he said.

Prices as of the third week of January were $11.50-12 on the truck, Dolezal said.

The cool, wet weather in Costa Rica caused a tightening of the market on large sizes, in particular, said Kevin Manning, senior sales executive for grower, packer and shipper Rosemont Farms Corp. of Boca Raton, Florida.

John-Campbell Barmmer, director of marketing for grower/shipper Chestnut Hill Farms in Miami, said that though 2009 prices were a little less than 2008, “the price is coming back up.”

Barmmer said he is also encouraged by the rise in disposable income, and hopes it signals a better year for the industry.

Growers optimistic

Growers appear buoyed by demand. Frontera Produce is increasing its Mexican pineapple production to keep up with demand, Banacol has announced the purchase of more land in Costa Rica, and Goldfield said the farms Dole added last year in Costa Rica, which provides most of its production, “are doing very well.”

“We are also very excited about some of the research results regarding proprietary varieties but do not yet have any commercial volumes to announce,” he said.

Manning said Rosemont, which was purchased by logistics company C.H. Robinson last fall, hopes to double its current volume over the next year. Rosemont imports pineapples from its own farm and from other independent growers in Costa Rica, with a little from Panama, he said.

Maximizing efficiencies

While demand may be good and the economy improving, shrinking profit margins have forced companies to change the way they do business, said Elizabeth Inglese, commodity manager for pineapples with Calavo Growers Inc., Santa Paula, Calif.

“Large-volume purchasing from a retail perspective has slowed down, so we as a distributor have to maximize on efficiencies, which takes a lot more planning,” said Inglese, who brings in pineapples from Costa Rica, Mexico, Guatemala and Hawaii.

“We have to communicate more with growers to make sure they know what we can move out here,” she said.

“I also have to know what they’re looking to harvest, then let retailers know what kind of volumes we’re going to have in the next three to four weeks.”

Consistent pricing needed

When it comes to marketing pineapples, Bill Sheridan, vice president of sales and marketing for Banacol, Coral Gables, said the shortfalls and surges in volume of the last few years haven’t been good for the industry.

This year, he said he’s working to come up with a consistent everyday price that doesn’t vary dramatically from the promotional price.

“We’re still going to promote pines,” Sheridan said, “but it concerns me that some retailers put them on sale for $2.99 then back up to a regular price of $5.99.”



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