Peruvian citrus suppliers say each year the country is getting more competitive and closing quality and timing gaps that exist with its Southern Hemisphere competitors.
“They have been around for a few years — this isn’t their second year. They are getting better and better at it,” said Paul Marier, vice president of sales and marketing for Cape Town, South Africa-based Fisher Capespan.
“The more the shippers become accustomed to market, the better they are at logistics. We get feedback on quality of product, packaging, and they continue to improve.”
Marier said that, with rare exception, customers do not refuse Peruvian product. He also said the only real quality problem has come from growers trying to get their fruit to market too early before full internal maturation.
David Mixon, senior vice president and chief marketing officer for Seald Sweet International, Vero Beach, Fla., said the key to success for the Peruvian deal is hitting the window between the end of California and the start of Chile.
“Without a doubt, each year it has grown considerably,” Mixon said of the deal. “Last year alone the imports into the U.S. were substantially increased from previous years.”
Data analysts Inform@ccion in Lima, Peru, reported that exports of Peruvian citrus to the U.S. have increased from 6% of total exports in 2006 to 25% in 2009.
“It comes down to timing and value proposition,” explained Mark Greenberg, vice president of procurement for Fisher Capespan.
“When we have satsumas, their benefit is they’re early. When there are no other easy peelers around, satsumas are a good alternative in the market until the more preferable clementines are around.”
Greenberg said navels also provide a good value proposition for clients.
“You try to give them a price or a package that allows them to achieve a retail price that moves fruit, that moves volumes,” he said.
Marier said logistical challenges prohibit Peruvian citrus from reaching the U.S. in a timelier manner, putting the product on par with South Africa’s sea voyage.
“A lot of the Peruvian containers have to be trans-shipped,” he said. “It’s maybe a little bit trickier from a planning perspective when product leaves Peru. You can’t always plan exactly when it will arrive.”
Marier said a stopover in Panama, required to fulfill cold treatment, does not affect the product’s shelf life.
“Citrus is pretty strong merchandise,” he said.
“Our experience is that the quality has been first rate,” agreed Mark Greenberg, also of Fisher Capespan.
“The issue is that the Peruvian w. murcotts have to compete with the clemenules — the traditional Clementine variety from Chile — head on.”
Greenberg said w. murcotts tend to get a higher price largely because of their early September arrival time when there are fewer easy peelers available in the market.
“We believe we have the best offer in the market in terms of value,” said Estuardo Masias, general manager of Lima, Peru-based Prolan and part owner of La Calera, Chincha, Peru.
“Our minneolas are great and at a very good price. Our w. murcott is a little more expensive, but it’s also a prime piece of fruit to eat.”
James Milne, citrus category director for The Oppenheimer Group, Vancouver, British Columbia, said the deal has grown, especially for minneolas and w. murcotts.
“Really, it’s just a varietal thing,” he said. “They have an opportunity presented by the relatively lower volumes of South African and Australian fruit — they are filling that gap.”
Nonetheless, Ismael Benavides, former Peruvian Minister of Agriculture and general manager of the Huamani Group, Pisco, Peru, expressed concern about the large increases in production estimated by SHAFFE, the trade association that represents fresh fruit growers and exporters of the Southern Hemisphere.
“We are concerned with the large increase in production estimated by SHAFFE,” he said. “Particularly under depressed market conditions in Europe and a stagnant U.S. market.”
Tom Cowan, Peruvian program manager for DNE World Fruit Sales, Fort Pierce, Fla., said South Africa may reduce its shipments this year because of increased sales in geographically closer markets like the United Kingdom, Europe and Russia.
“Peru will be competing with Australia’s 220,000 10-kilo boxes,” Cowan of the minneola deal. “The markets are growing on summer citrus, (but) summer citrus isn’t an item that is highly featured.”
Cowan explained that the lack of supermarket promotion is due to the high volume of domestic produce including peaches, nectarines and corn, which are featured local items.
“The customer doesn’t come to the store to buy summer citrus — it’s an impulse item,” he said.
Cowan said retailers realize that summer citrus provides new gross dollars, though not in high volumes.
“It makes citrus a year-round sales item,” he said.
Cowan said this year will peak with smaller sizes in the 40- to 50-count 10-kilo box, compared to last year’s slightly larger fruit in the 30- to 40-count range. He also said most East Coast retailers will sell the fruit loose per item or in some 3-pound bags.
Milne agreed that fruit will be sold in 2- and 3- pound bags, boxes and some loose. He said that, unlike Chilean clementines, which are largely shifting away from boxes, the 5-pound box of w. murcotts still sells well.
“They are very, very appealing cosmetically and in appearance. They could be more of a premium item,” he said.
Fernando Cilloniz, general manager of data analyst Inform@ccion, said promotion from growers and exporters has been primarily in the way of attendance at fairs, and exporters and suppliers have yet to embrace promotional campaigns in the way that Chile does.
Benavides countered that the Huamani Group was in fact participating in promotions with major retail chains.
“We are extending our distributor network in parts of the U.S. where our citrus is not present,” he added.