NEW YORK CITY — From investing in expensive proprietary varieties to competing with suppliers controlled by private equity firms and finding new sales channels, John Pandol believes produce grower-shippers are under pressure to make all the right moves.
Pandol, director of special projects for Delano, Calif-based Pandol Bros., participated in a Dec. 11 session, “Ten Signposts on the Path to Produce Prosperity,” at the New York Produce Show’s Global Trade Symposium, sharing the stage with Produce Business editor-in-chief Jim Prevor.
Pandol said the focus on country of origin in the grape industry has eased as marketing windows overlapped and blended. The robust year-round supply also has diminished the need for storage facilities for grapes, he said.
Retailers want to offer premium varieties, but many also want to feature “value” grapes, Pandol said. The grower need for higher returns with premium varieties is offset by an increased emphasis from retail buyers for basic varieties.
Global grape volume is close to a tipping point, Pandol said, as supply and production continue to rise.
“We’re now at many points in the year where we really have too many grapes,” he said.
Pandol said that competing with “five-year farmers” (private equity-controlled firms) is challenging for traditional growers hoping to hand the business on to the next generation.
“It is very different to compete against a guy who’s plan is to sell it five years as opposed to a guy who goes and wants to keep it,” he said, noting that private equity firms count rising real estate value as part of their return.
Another the way the grape category changed is an explosion of varieties. While some premium varieties have had success, Pandol said consumers generally are not distinguishing between grape varieties as much as retailers.
Some retailers try to get into preferred varieties too early and stay with them too long, compromising the condition of the grapes.
Another set of questions for grower-shippers who are bringing on a new variety is how to unveil It and how to position with their existing varieties.
“Do you talk to the trade about it? Do you talk to consumers about it?” Pandol asked. “Do you get all the money out of it, or use it leverage other business?” Pandol said the industry must learn how to better engage with e-commerce marketers to ensure produce is in stock and accurately described in retail online stores.
He also spoke about the industry trend away from plastic packaging and offered a contrary opinion, noting that researchers at Michigan State University conclude that non-biodegradable packaging that protects food and prolongs shelf life can be better for the environment than biodegradable packaging.