The Peruvian grape season is well underway, and the country's grapes are highly regarded in many regions around the globe, including North America and Asia. In the meantime, Chile's season has also kicked off with a positive outlook. While South America's grapes are experiencing strong demand from North America, demand from Asia has softened in recent years.
The U.S. market
U.S. demand for Peruvian grapes has been robust over the past few years, with consistent pricing and fluid movement. "However, maintaining quality remains critical to sustaining this growth," says Dalton Dovolis with IPG. In Peru, northern regions like Piura faced drought conditions that impacted both quality and volume and water restrictions have further compounded these challenges. As a result, Northern Peru's production volume was estimated to be down 20 to 30 percent overall, causing delays and heightened demand as the southern Ica region began its harvest. "The quality from Ica looks exceptional, promising a successful run for both North American and Asian markets with beautiful green and red seedless grapes, as well as black seedless and red globes," shared Dovolis. From Peru, IPG brings in varieties like Sweet Globe™, Autumncrisp®, Crimson, Sweet Celebration™, Jack Salute™, Allison, Timco™, Scarlotta, and Red Globe.
Autumncrisp and Sweet Globe green grapes.
Exports to Asia
The challenges in Northern Peru have resulted in a significant reduction in the percentage of Peruvian grapes shipped to Asia this season. Additional circumstances are also playing a role in the decrease. "This season's high prices, driven by strong U.S. demand and expensive ocean freight, have made Peruvian grapes less accessible to Asian markets," Dovolis commented. In addition, high air freight costs (up to $5/kg) and limited country protocol by air for markets like Vietnam from Peru further limit competitiveness compared to other grape growing countries like South Africa. "Nevertheless, there is still consistent demand for top-quality Peruvian grapes in Asia, as first-class produce always finds a market regardless of pricing pressures." Dovolis is confident Peru's Ica region has the ability to meet the high standards of both Asian and U.S. markets. "After all, Peru, along with the U.S., continues to be the benchmark for quality and visual appeal, often regarded as the "king" of premium grapes."
Chilean grape update
In the meantime, the Chilean grape season is also underway in the Copiapó Valley and in weeks 51 and 52, harvest in the Vicuña-Ovalle region is expected to start. Aconcagua and Spith regions will follow, starting around weeks 1 or 2, which is normal. The Chilean industry is projecting 65 million cases, with an increasing availability of green varieties like Sweet Globe and Autumn Crisp, which are dominating over red varieties. Red Globes are expected to reach around nine million cases, beginning harvest in weeks 3 or 4. The first vessel from Chile is scheduled to arrive in the U.S. in week 51. This year, a new systems approach will debut for Northern Chilean grapes. This protocol eliminates fumigation, improving quality while reducing costs. IPG sends most Chilean grapes to the U.S., but some premium lines are also shipped to Korea, Japan, Vietnam, and other Asian destinations.
All in all, IPG distributes approximately 60 percent of grapes from South America to the U.S. and about 40 percent to Asia. The primary Asian destinations include Vietnam, Thailand, Taiwan, Hong Kong, Korea, Japan, and Singapore. "While Asia and the U.S. have distinct preferences for grape quality, we aim to bring the same level of quality demanded in Asia to the U.S. market as well, essentially introducing an elevated product line."
Pictured from left to right are Carla Robles of IPG Peru, Emilio Nicolini of Sun Fruits Exports, and Dalton Dovolis of IPG.
Slow demand from Asia
Asian markets are known for their strict quality standards, requiring the largest berries with optimal size, color, crunch, and taste. Despite South America being able to meet these standards, demand from Asia has softened in recent years. This is largely driven by slow economic recovery post-COVID and rising costs and inflation at origin. Many markets now prefer lower-cost options, such as Chinese and South African grapes, which allow for better affordability and movement, particularly for families under financial strain. "As a result, South Africa continues to dominate the value-driven segment of the Asian market." This development combined with inflation, increased labor costs, and overall pricing challenges has made U.S. and Peruvian grapes less competitive in Asia.
Competition from China
"Unfortunately, China has gained significant market share in many Asian countries over the last four to five years." Once a major customer for U.S. grapes, China has increasingly transitioned into a competitor, cultivating many of the same special-bred varieties that were originally exclusive to U.S. growers. This shift has reduced demand for U.S. grapes and heightened competition. "At IPG, we are committed to regaining some of the market share once held in Asia by the U.S., Peru, and Chile, and supporting our growers through innovative strategies to meet evolving market conditions."
Annually, amongst other items, IPG handles approximately 1.5 million boxes of grapes from the U.S. during its domestic season for export and domestic supply. In the off-season, the company manages another 1.5 million boxes of grapes from South America, specifically Peru and Chile for its import and export business.
For more information:
Dalton Dovolis
IPG
Tel: (001) 831-754-9740
[email protected]
www.internationalproducegroup.com