Tropical fruit importers feel pressure to keep prices low - The Packer

Tropical fruit importers feel pressure to keep prices low

01/07/2010 03:20:08 PM

Suppliers of wintertime produce from Central America and the Caribbean are finding that in the economic downturn they have to lower prices in order to keep customers.

“Some of the things that you fought to hold pricing on some years ago, maybe you give a little bit,” said Jessie Capote, vice president of operations at J&C Enterprises, Miami, who imports from Costa Rica, Honduras and Panama.

“You are more flexible so you can meet people halfway on something that they couldn’t buy before or so they can buy something that they used to buy.”

Lou Kertesz, vice president of Fresh Quest Produce Inc., Pompano Beach, Fla., said that also means smoothing out price fluctuations.

“It’s better for demand when you have prices that are more stable and don’t have fluctuation or high prices,” he said. “Anytime in a tough economy you can keep prices stable, that has more benefits to it than it has negatives.”

Kertesz said that even though people have to eat, high prices to customers get passed on to consumers making tougher grocery choices, but he is hoping those choices are healthy ones.

“We are in health related industry. Food that we have is nutritious,” he said. “I would say it’s a recovering economy, but not necessarily a fully boosted one.”

Larry Leighton, president of Caribbean Fruit Connection Corp., Miami, said an added business challenge arises for suppliers intent on providing high quality, pricier products to customers who are willing to sacrifice quality for price.

“Not everybody is willing to buy on quality. They may go on price. So you tend to lose market share, particularly in this time,” he said. “You hear people say, ‘I have to buy on price. I have to compete.’”

Leighton said his shippers have put a tremendous amount of effort and energy into quality product selection and packing.

“On the other hand, maybe our price will be 5% higher than yams that are perhaps being processed and packed in facilities that have much lower overheads and may or may not weigh 40 pounds net,” he said. “The people you really want to work with are the people who also care for the same things.”

Mary Ostlund, director of marketing for Brooks Tropicals, Homestead, Fla., argued that tropicals — whether vegetables or fruit — are already priced at good values for consumers.

“Luckily, I think that people realize that a lot of tropicals are bargains,” she said. “For example, with Caribbean red papayas you get a lot of papaya for the buck, and Florida avocados are much larger and there is a lot of meat in those avocadoes. There’s a lot of bang for the buck.”

Larry Nienkerk, partner and general manager of Splendid Products LLC, Burlingame, Calif., said that at the recent National Mango Board meeting, the top discussion topic was the effect of the economy on consumer purchases of mangoes.

“It is pretty much intuitive that No. 1, mangoes are a relatively cheap piece of fruit most all of the year now,” he said. “It is usually a very good value fruit for the consumer, but, that being said, it’s difficult to get those people in the population who we would like to reach as new customers.”

Mangoes are not top of mind for consumers with limited disposable income, Nienkerk said, even though traditional customers realize its value.

Michael Warren, president of Central American Produce, Pompano Beach, points to value that comes from aesthetics and taste.

“We figure that if the melons look great and taste great, and they get in the stores at a price point that the consumers will feel good about buying it at, then (they) will also move great,” he said. “It’s a concerted effort always on the shipper’s part as well as the retailers working together to optimize the flow of fruit with the production that’s available.”

Warren said during his unscientific analysis of grocery carts in the produce section, melons are still a hot item.

“The consumer has choices when they are in the store, and certainly we are all expecting that people are watching their dollars right now,” he said. “So every trip to the store they may not be buying a melon. I like what I see. I see shopping carts going by with melons in the basket.”



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