With a high volume of avocados of excellent quality, fresh produce industry sources said they think, in conjunction with plentiful promotions of the fruit, the Chilean avocado deal could come close to ideal in 2009.
“We believe that retail promotion will be the key to moving increased volumes from Chile,” said Bruce Dowhan, general manager for Giumarra Agricom International, Escondido, Calif.
“Retailers will have an excellent opportunity to offer high-quality Chilean avocados at attractive promotional price points,” he said.
Many grower-shippers agree that the big volume from Chile will start coming in by mid-August and early September, an excellent time to begin promoting the fruit.
“Retailers know that when the Chilean fruit comes with sufficient quality they know they have the opportunity to do a lot of good promotions in the fall,” said Phil Henry, president of Henry Avocado Corp., Escondido, Calif.
Henry said promotions likely would start around Labor Day and continue through the fall. Additional promotions are planned for Christmas and New Year’s, followed by a final promotion to end the season around Super Bowl time.
Dana Thomas, president of Index Fresh Inc., Bloomington, Calif., recently visited Chile and said there is going to be a lot fruit this season and this will benefit consumers because the prices will be at such level that creative promotions can take place from August to May.
“This should keep the buyers, retailers and foodservice costumers with than adequate volume of Chilean fruit with good prices,” Thomas said.
Robert Lucy, president of Del Rey Avocado Co., Fallbrook, Calif., said retailers will be going after promotional pricings and for this season, Chilean avocados’ prices will be lower than California’s.
“There will be plenty of good promotional prices for 50s and 60s,” Lucy said.
As far as pricing is concerned, some grower-shippers believe that by having larger volumes retail prices will be lower, hence bringing lower returns for growers.
“The prices will be lower this year at the retail price,” said Adolfo Ochagavía, president of the Chilean Hass Avocado Committee, Santiago, and director of the Chilean Avocado Importers Association, Washington D.C.
“Therefore, the return for our growers will be lower as well. When there is a lot of volume it is important to adjust price with the demand,” he said.
However, to achieve good returns for the growers, knowing exactly how to promote the fruit can make a difference.
“Instead of having really high prices like last year’s driving margins, we will have moderate pricing and more units to multiply the margins by,” Thomas said.
“At 99 cents, there is going to be a lot more avocados moved than at $1.49-1.69. I think that we will be able to walk the balance between good retail pricing and good f.o.b. pricing to trade,” he said.
Thomas said this year many retailers are doing the 10 pieces of fruit for $10.
“I think there will be a lot of opportunities like that this coming season,” he said.
For in-store promotions, consumers can expect dual displays of different sizes.
“Retailers most likely would run loose displays for size 50s at a certain price and other sizes such as 60s or 70s in a bag with another price point, and different price point for 32s and 36s,” Thomas said.
Grower-shippers plan various packaging styles.
“Bagging is a big trend,” said Thomas. “We are trying to do more bagging and we will be expanding our bagging capacity across the country.”
Dowhan said Giumarra will focus on promotion and continue to emphasize on value-added services.
“We will offer our customers multiple pack styles, bagged product, customized ripening, 15 f.o.b. locations, delivered product, category management, and all inclusive, volume building, programs,” he said.
Due to an increase in volume this season, some grower-shippers believe prices will drop throughout the season.
“We will ask retailers to promote more often,” said Ross Wileman, vice president of sales and marketing for Mission Produce Inc., Oxnard, Calif. “Lower prices can drive consumption."