Industry increases pack size to accomodate high volume

10/16/2009 10:50:00 AM
Abraham Mahshie

Chilean blueberry suppliers have agreed that the pint will be the standard clamshell from the country this year as the marketplace readies for an unprecedented winter volume.

“The way we’ve planned it out, the Chilean blueberry committee agreed on a standard pack that we feel the market will absorb as long as the pricing is right,” said Joe Barsi, director of business development at California Giant Inc., Watsonville, who likened Chile’s development in the blueberry market to that of strawberries in California.

“Chile has been around a while but we don’t have the mature pack, but I believe that pints will be like the 1-pound for strawberries. I believe it will help immensely,” he said.

Phil Neary, director of operations and grower relations at Sunny Valley International Inc., Glassboro, N.J., predicts a diversification of packages with a trend toward larger packs, similar to those offered at many club stores.

“I don’t think you’re going to see any 4.4s except maybe fly in. There will be more 6-ounce and pints,” Neary said of the smaller 4.4-ounce pack and last year’s standard 6-ounce clamshell. “Then, the true special packs, 18-ouncers, specifically club store-type of packs, and 24 ounces,” he said. “You can’t continue to have a small, small package and price real high at retail.”

Janice Honigberg, president of Sun Belle Inc., Washington, D.C., said Sun Belle also will offer a diversity of pack sizes, starting at 6-ounce and including 12-ounce, 11-ounce for California, 14-ounce, pints, 18-ounce and 24-ounce.

“All sizes will be available all season,” she said, adding that Sun Belle experienced a 46% growth last year propelling it to a top five Chile exporter. “In Chile, there is a large move toward pints toward the peak of the season. I think the market can become quite robust … with the large participation in all of these larger packs.”
 
The right price

Suppliers say moving up to 123 million pounds of fresh blueberries can’t simply be done with larger packs.

Retail pricing also will play a key role in perceived value.

“It’s volume, price and promotion,” said Bobby Stokes, berry sales manager at Curry & Co. LLC, Brooks, Ore. “It’s got to be that balance between what’s acceptable to consumers to buy — with the economy being in the tank like it’s been — but, there’s still value in fresh blueberries.”

Barsi said with a price point anywhere from $2.99-3.99 consumers will see value in the purchase.

Mario Flores, blueberry product manager for Naturipe Farms LLC, Naples, Fla., described this year’s Chilean blueberry deal as an “evolution.”

“On our end, we have to evolve the way we are marketing Chilean blueberries in the U.S. to increase consumption during the wintertime at volumes that will work ... but at prices that are a value and attractive to the consumer and sustainable to the growers in their operations in Chile,” he said.

Flores said part of that evolution is realizing that people have to go to larger packs than before. That means understanding how to precool larger packs so that they arrive in good condition and the blueberries retain shelf life.

Mark Girardin, president of North Bay Produce Inc., Traverse City, Mich., believes this year’s absorption of fresh blueberries in North America is evidence that the Chilean deal is also moveable.

“If you look at the numbers that have been consumed in the Northern Hemisphere this year, we’ve had record movement in fresh produce throughout the year,” he said.

“Of July’s figures in particular, he said, “there’s never been 67 million pounds of fresh blueberries consumed in the U.S. in one month before.”

With respect to customer perceptions of the Chilean deal in the European marketplace, Girardin said North Bay had no indication the quantity is an unmarketable one.

As for stateside expectations, Girardin said distribution will concentrate east of the Rockies, which is the case for most suppliers.

Grower returns

Last year’s glut of blueberries and poor quality depressed prices and hurt Chilean growers, but this year suppliers are expecting that better infrastructure and cooperative weather will result in a steady supply and acceptable returns.

“Our job is to sell it as high as we can — the most the market will bear. How we try to separate ourselves from other shippers is to work closely with growers over the long range,” Neary said.

When asked if Chilean growers are likely to leave the deal like Argentine growers have a year after heavy losses, Neary said, “I think the Chilean industry is a little more mature and those that got in early are very efficient. They probably learned things the hard way 10 years ago.”

Neary said with the industry maturing rapidly, supply is starting to catch up with demand.

“What we’re trying to do is start to plan well ahead and start to set up the right product for what our retailer wants,” he said. “We’re trying to keep our customer base as diverse as we can, where we just don’t get fixed in on just a handful of customers.

“Where Chile used to have almost 100% of the world in their hands for the wintertime, now they have some competition,” said Dave Bowe, owner of Dave’s Specialty Imports Inc., Coral Springs, Fla. “They’re trying to increase their prices with increased volume.”

Bowe said Chilean growers think they can achieve increased prices despite increased volume by expanding their reach in North America.

“It’s very, very difficult for them ... to talk those people into increasing a price or holding a price when everybody knows that the volume is going to be coming like we can’t believe,” he said. “Somehow they want to find a way to move more and have a greater supply of buyers — foodservice and people like that — not more importers.”

Expanding shipments during the “shoulders” of the deal, the start and the end, is one way to bring supply closer to demand for the year-round product.

“What we’re planning on doing is shipping more fruit by air freight at the beginning,” Barsi said. “Air freight is cheaper, there’s more space and they want to make sure that North America gets high quality fruit right away.”

Barsi said the global recession and a decline in Chilean salmon exports has freed up more air space, and with oil prices down, so are freight rates.

Barsi  also said some suppliers are talking of chartering planes this year.

Air freight may also help suppliers hasten supplies in time for the holiday period since most shipments are not expected to arrive until week 52 and week 1, continuing strong through January and February, Flores said.



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