California shippers look forward to strong demand for cherries - The Packer

California shippers look forward to strong demand for cherries

04/21/2010 03:01:56 PM
Andy Nelson

After a long, cold winter, California cherry grower-shippers  are confident retailers and consumers are more excited than usual for the first fresh cherries of the season.

Demand should be better in 2010 than in 2009, said Maurice Cameron, president of Hanford, Calif.-based Flavor Tree Fruit Co., which markets fruit packed by Hanford-based Warmerdam Packing LLC.

“Demand has been exceptional, especially compared with last year,” Cameron said. “Last year retailers were skittish on the economy. This year they have better ideas of how the cherry category can perform, even in these times.”

Helping out California shippers this year is the timing of Memorial Day, Cameron said. It falls on May 31, meaning that California will be shipping in heavy volumes and retailers can promote aggressively.

Memorial Day, which falls on the last Monday in May, can come as early as May 25.

Retailers who have been dealing with lower margins on many fresh produce items are chomping at the bit to start promoting cherries, which they think they can make more money on, said Roger Pepperl, marketing director for Wenatchee, Wash.-based Stemilt Growers Inc.

“Retailers have never been hungrier to show some dollar gains,” he said.

With new plantings and younger trees producing more, there should be plenty of high-quality California cherries for retailers to promote this year, with supplies expected to peak in late May and early June, Pepperl said.

Competition from up north is likely to come earlier than usual this season for California cherry grower-shippers, said Joan Tabak, sales manager for Fridley, Minn.-based Roland Marketing, which markets cherries under the Green Giant label.

“Washington looks like it’s coming very early,” she said.

Cherries could begin shipping out of the Yakima Valley by about June 1, about 11 days earlier than normal, Tabak said. Roland markets cherries from both California and Washington.

California’s deal won’t likely wind down until mid- to late June, Tabak said.

“California likes to get through as much as possible before Washington, but this year there will be some overlap,” she said.

That said, Tabak isn’t worried about a glut or precipitous dip in  markets. These are fresh cherries, after all.

“Everybody talks about the economy, but cherries are one of those treats people treat themselves to,” she said. “There’s going to be really good demand.”

With the deals overlapping, and good crops expected from both states, prices should be right for aggressive promotions and very brisk movement, Tabak said.

Also, cherries, like other fresh fruits set to begin shipping in the coming months, should benefit from consumers’ longing to put the memorable Winter of 2009-10 firmly behind them, Tabak said.

“It’s been a long winter,” she said. “People are ready for the summer fruit. It’s one of the sure signs that summer is on its way.”

Dave Parker, marketing di-rector for Traver, Calif.-based Scattaglia Growers & Shippers LLC, agrees that the sight of California cherries in produce departments will be a much-needed balm for consumers this year.

“People are coming out of winter, they want something besides their usual winter mainstays, and here come cherries,” he said. “It’s a sure sign of spring.”

Even without a particularly long, cold winter to give the market an extra boost, Parker said the popularity of cherries, regardless of weather, continues to ensure strong demand — even with a big crop, which is what Scattaglia and other California grower-shippers are expecting in 2010.

One of the reasons, Parker said, is that in an age of year-round sourcing, cherries still have the distinction of being a rarity — an item that’s available only for a few months every year.

“Demand for cherries continues to grow,” he said. “Consumers love the convenience, flavor and seasonality. It’s one of the last items that really shouts out ‘seasonality.’ And there’s the health message. There are a lot of reasons for cherry sales to continue to go up and up.”

Steve Nelsen, managing partner of Kingsburg, Calif.-based Valhalla Sales & Market-ing Co., is more concerned than some of his fellow grower-shippers about 2010 markets.

“One thing about cherries is, you have a few rough years, then one good year, then a few more rough years and another good year,” he said. “I’d like to see it maintain a nice level.”

Historically, Nelsen said, the California deal has started in the stratosphere — with boxes selling in the triple digits — then fallen off a cliff as supplies quickly ramped up.

Usually, the bottom of the cliff isn’t too low, he said. But in years like the present one, the large crop could make the fall a little more precipitous than usual.

“When people realize the size of the crop, it could drive it down quicker,” he said.

The economy also could have an effect on demand for California cherries this year, Nelsen said.

Cherries are in a special category to some extent because they are still one of the few true seasonal items still left in the produce department. Because of that, there will always be a demand for them.

But that doesn’t make them recession-proof, he said. There is still a price beyond which consumers are unlikely to go.

The fate of another product Valhalla sold recently could be a harbinger for cherries, Nelsen said. Some retailers were selling the company’s 5-pound manda-rin box for $5 or $6. At that price, he said, sales were way off.

“It will be interesting to see how the cherry deal goes,” he said.

Another thing always on California shippers’ minds, Nelsen said, is the early entrance of Washington into the cherry deal.

Out-of-state buyers tend to switch to Washington as soon as its crop begins shipping, he said. And while most California retailers stick with the local shippers, not all do, he said.

“One of our local chains, when they see Washington is available, they make the move,” he said.



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