The South African citrus industry is working hard to improve its supply chain to deliver its fruit cheaper and more effectively, and continuing to strengthen its relationships with national chains — all in an effort to increase the amount of fruit it ships to the Western and Midwestern regions of the U.S.
Shipments to North America are expected to be up 14% this year, and much of that is expected to come from the new emphasis on the Midwest and West, growers and officials say.
In 2009, sales from those regions made up about 35% of South Africa's U.S. total, according to the Citrusdal, South Africa-based Western Cape Citrus Producers Forum. In 2010, it’s expected to be 50% of all sales.
The Midwest and West, which have traditionally been dominated by the Australians in the import citrus deal, have great growth potential for South African shippers, exporters and officials say.
“This (shipping more to the West and Midwest) is part of our growth strategy and we are currently finalizing the logistics to achieve this,” said Joretha Geldenhuys, chief executive officer of the producers’ forum.
Traditionally, in the summer citrus deals South Africa has concentrated its shipments on the East Coast and Australia on the West Coast, said Tom Cowan, South African citrus category manager for Fort Pierce, Fla.-based DNE World Fruit Sales.
This summer, however, the South African deal will try to more closely imitate the Chilean deal, which covers the whole country, Cowan said.
Some container shipments could go to Texas for Western U.S. distribution, he said. Or product will get trucked west out of Philadelphia, the regular port of entry for South African citrus.
“We see some advantages” shipping to the Midwest and West from Philadelphia, Cowan said. “Freight can be 50% less when you’re going from east to west.”
Chile definitely has an advantage on the West Coast when it comes to freight costs, said Marc Solomon, president and chief executive of Montreal-based Fisher Capespan.
That said, there are growth opportunities for South African citrus beyond its East Coast base, Solomon said.
“Growers are encouraging us to build in the Midwest, Southwest and West,” he said. “They’re currently very well entrenched on the East Coast. The thought is there are growth opportunities there.”
If fuel prices continue on their current upward trajectory, there could be limitations to how far importers are willing to ship once product arrives on the East Coast, Solomon said, but he’s not overly worried about that scenario.
“We’ve had years where it was much more,” he said. “We still think we can deliver fruit at a good value.”