Peppers are a mainstay of retail fresh produce departments, and for good reason.
Retailers use fresh peppers as a destination category to attract attention and to stand out to their shoppers, said Craig Carlson, CEO of Chicago-based Carlson Produce Consulting LLC.
Retailers are putting jalapeños and other varietal peppers in tote bags to make them easy to pick up, Carlson said.
Between specialty peppers and the many growing environments, origins and colors of bell peppers, the number of retail stock-keeping units (SKUs) devoted to peppers is considerable, Carlson said.
Hothouse, shade house and field grown present many pricing dynamics and options, not to mention the organic category, he said.
“It is actually getting pretty complicated to figure out what is incremental and what is not, and the approach to managing that category,” he said.
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Retail sales data from Market Advantage TSV shows fresh pepper sales in 2019 totaled $2.05 billion, up 3% from 2018. Peppers commanded about 6.76% of all vegetable sales.
Organic fresh pepper sales totaled $119.9 million in 2019, up 1.4% from the previous year. Organic fresh peppers accounted for 3.59% of organic vegetable sales.
Packaging of peppers and other produce may be more in demand because of the COVID-19 pandemic, Carlson said.
“Customers, when they are shopping, they are not spending as much time picking out four or five items, they are looking to grab and go,” he said.
With foodservice buyers typically taking peppers with less than ideal sizing or appearance, pepper suppliers have felt the loss in foodservice demand by not being able to market as much of their crop, Carlson said.
Even so, the fresh pepper market was trading at $24-27 per carton on May 12 in Florida, up about $4 per carton from last year at the same time.
Over the long term, greenhouse volume and import volume of peppers have grown.
Shipments of U.S.-grown bell peppers totaled 640.7 million pounds in 2018, down from 745.1 million pounds in 2010. Imports of bell peppers have increased from 676 million pounds in 2010 to 754 million pounds in 2018, according to the USDA. Imported greenhouse bell pepper volume totaled 244.7 million pounds in 2018, up from 201 million pounds in 2010.
Anthony Totta, CEO of FreshXperts, Lee’s Summit, Mo., said prices for peppers have been average for the past several months. That would appear to indicate continuing strong demand, he said, and some diminished supply as a result of consolidation and perhaps movement of greenhouse acreage in Canada from peppers to cannabis.
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