With volumes of Chilean grapes low and prices high as the winter season starts, suppliers are warning retailers to have promotions in place for an expected surge in volume.
Suppliers fear a sharp decline in pricing if volume hits all at once — that would lead to heavy grower losses and a backup in supply. Uncertainty also surrounds the potential damage of El Niño rains in the southern growing regions.
“What we’re all afraid of is, if the prices are too high, not having any promotions in place,” said Anthony Stetson, vice president of sales for Pandol Bros. Inc., Delano, Calif.
“We’re wondering when is that time that we have volume high enough to promote — maybe January, maybe February.”
Stetson said grapes are not a promotable item when the market is selling at near $40 a box, but by the time promotable volumes are expected to come in February, consumer interest will be at a low.
Craig Uchizono, vice president of Southern Hemisphere for the Giumarra Cos., Los Angeles, said that success in moving the Chilean grape volumes will depend on “participation from all levels,” including retailer promotions and good communication from growers.
Manuel Jose Alcaino, president of Decofrut, Santiago, Chile, said the high prices at the start of the season have very clear causes and are not likely to continue.
“The situation right now is due to a very, very, very short amount of inventory of domestic grapes, especially in white seedless, like thompsons,” he said. “The supply from Brazil was also short and the production from Chile was delayed.”
Alcaino said Chile produces 30 million boxes of thompson seedless grapes, what he called the “queen of the table grapes.”
“With the shortage of this year plus some of these vineyards going out (of business), we feel we might be in the area of 2 million to 4 million boxes less,” he said of an item he characterizes as a staple on American consumers’ grocery lists.
Alcaino said grape production in the Aconcagua Valley may be down 25%, or 5 million boxes.
“The Aconcagua Valley is a big part of the whole Chilean production,” he said, describing the losses suffered by growers last season after a sharp decline in prices.
“The market in March kind of tanked and there was a lot of red ink for the growers in Chile.”
Alcaino said although the economy may influence supermarkets to push for lower prices, the reduction in supply may create an amenable situation for Chilean growers.
“We’re hoping that this reduction in volume could help stabilize the market during that key period, which is a good sign,” he said.