Importers look forward to strong demand - The Packer

Importers look forward to strong demand

07/26/2013 10:38:00 AM
Andy Nelson

Importers expect strong demand for Peruvian asparagus after a slight midsummer swoon.

The summer doldrums had struck the asparagus market by early July, said Jeff Friedman, president and sales manager of CarbAmericas, Pompano Beach, Fla., which was sourcing from Peru and Mexico in early summer.

“Right now the market seems to be real flat,” he said. “There’s not a lot of demand.”

Mother Nature was playing a big part in it, Friedman said.

“There’s a heat wave across the country — no one’s really interested in asparagus.”

Markets will likely stay in the low 20s for the bulk of July, Friedman said. Then, as Mexico exits the deal, prices will likely spike toward the end of the month, he said.

That spike will likely last seven to 12 days before prices gradually come down as Peruvian volumes increase seasonally.

In recent years many Peruvian asparagus fields have been turned into something else, said Charlie Eagle, vice president of business development for Pompano Beach-based grower-shipper Southern Specialties.

“People have been reading a lot about grapes, citrus and other products from Peru,” he said.

However, Eagle said he is convinced that strong U.S. demand for Peruvian asparagus will convince growers to plant more asparagus again in the near future.

“I think the markets are pretty healthy,” he said.

Southern will import from Peru and Mexico in the coming months, with Peruvian product making up about half of the company’s total.

“There’s some overlap, but there’s a place for both countries.”

Demand for Peruvian produce wasn’t bad in early July, but it would likely be in the “good” category before too long, said Carlos Solf, Southern’s procurement director.

“Demand has been steady,” Solf said. “Retailers just finished a few weeks ago with local production, and they’re changing to Peru product. Demand should increase as Peru will become a main production area, along with some parts of Mexico.”

Peru and Mexico should have no trouble co-existing as the deal progresses, Solf said.

“At this moment Mexico and Peru complement well,” he said. “When you have local production, Peru can’t compete because buyers don’t look for value, but to support the local areas. We’re not sure if retailers are losing potential increased revenue by not carrying Peru also.”

Increased volumes of asparagus from Mexico in the second half of the year will likely help marketers of Peruvian product promote more aggressively, said Rick Durkin, director of business development for Miami-based Crystal Valley Foods.

“It takes pressure off the pricing,” he said. “There will be good volumes throughout that period.”

Asparagus markets were in many ways the reverse of summer 2012, said Peter Warren, marketing and sales director of Pompano Beach-based Ayco Farms Inc.

“The domestic deals were very late, and they were large, and it caused delays in interest in both Mexico and Peru,” he said. “Year-to-date, volumes are way off, and pricing is, too, to the tune of $10 per box. We’re all kind of reshuffling our cards for a new game.”

Moving forward, demand will depend largely on the prices Peruvian asparagus is getting at retail, Warren said.

“If you can sell it for $3.25-3.85 a bunch, you’ll sell 10 times as much as if it’s over $4,” he said.

The numbers go up at a similarly staggering rate if retailers can get the per-bunch price under $3.

“That’s what drives the spot market,” Warren said.

Once Peruvian and Mexican volumes start ramping up, Warren is confident retailers will be able to promote aggressively, which will generate brisk movement.

Priscilla Lleras, coordinator for the Miami-based Peruvian Asparagus Importers Association, expected strong demand for Peruvian asparagus throughout the 2013 season.

“According to the USDA, per-capita consumption has remained steady and increasing for asparagus over the past 10 years, even during economically challenging times for the U.S,” Lleras said. “Furthermore, (The Packer’s 2013 Fresh Trends report) positions fresh asparagus as the No. 3 “new” item that shoppers say they are buying now that they did not buy previously.”

Nutrition and convenience are among the factors driving category growth, Lleras said.

“Watching the demand for asparagus grow in the U.S. is a great story,” she said. “As we continue to equip U.S. consumers with such a healthy vegetable and provide convenience and value to US households — that’s what it’s all about.”

Packaging innovations also continue to contribute to the success of the Peruvian asparagus industry in the U.S., Lleras said.

“For a few years now, Peruvian growers have partnered with importers in providing value added options to U.S. consumers,” she said. “We understand the buying trends, and have provided retailers with more options to offer consumers, including value, convenience, ready-to-eat and microwaveable alternatives.”

Southern Specialties’ Solf also said he is excited about the potential for new packaging to open marketing doors for Peruvian asparagus. New 6-ounce and 10-ounce packages showcase asparagus with other items in the company’s vegetable line, Solf said.

“We have found good demand for our Southern Selects value-added asparagus,” he said. “We continue to offer a variety of product styles and pack sizes to accommodate all consumers.”



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