It has been a difficult season for table grapes from South America as the industry is in a supply-exceeding demand situation. A situation that is expected to last until the end of this month at the very least. The season out of Peru started out well in terms of quality and yield and has been great for Peruvian growers. "While it's positive the country has had the ability to grow high-quality grapes later into their season, volumes are now biting into the Chilean season," says Carlos Bon with Divine Flavor. Volumes shipped to the United States from Peru, Chile, and to a lesser extent South Africa and Brazil, are significantly higher than the market can take.
"Taking into account promotions, aggressive pricing and good quality product, the U.S. market can pretty much go through four million cases of table grapes per week," said Bon. "However, in recent weeks, Peru and Chile together have shipped more than five million boxes/week." As a result, inventory has built up and some of the fruit available in the market is older. "This is not good for any member of our industry as it impacts quality and freshness, potentially shying consumers away from buying grapes."
Carlos Bon inspecting grapes.
Importance of quality and flavor
"However, it wouldn't be fair to talk about grapes as one single product, one single variety, and one single quality," admitted Bon. For certain grape varieties, the market is very tight while it is long on other items. It all starts with quality and flavor. "At Divine Flavor, we don't receive product to see how we can sell it, but we work with programs and bring in just the right amount of fruit we need for our retail partners. It's our goal to be a supply partner for our retail customers and make them successful." By offering consistent quality and volume at the right price, retailers are supported in improving their sales over the previous year. "They all keep track of their numbers, and it is our goal to make those numbers shine. We are a tool for them to reach their goals." Divine Flavor's largest customer pays top dollars for their grapes but also sells the highest volume. "The importance of flavor shows. Customers who trust the quality and flavor of our grapes witness annual sales growth. Commitment to high quality and flavor brings out immediate results."
Survival of the fittest
"If more retailers would be focused on quality rather than price, it would push growers and importers to raise the bar, which is necessary in an environment of oversupply," commented Bon. "It's a survival of the fittest." California has been dealing with oversupply for the last 12 years and has adjusted to growing better varieties. Chile has been dealing with too much supply for six or seven years and both Peru and Mexico are on the way up and will be facing challenges. In a normal year when there is no rain during harvest, no freeze, no civil unrest, no logistics issues, and no tariffs, table grapes face oversupply. If all retailers would demand high quality and high flavor, supply and demand would be in balance."
Left: Autumncrisp grape variety. Right: a group photo with Tomas Marin (Unifrutti), Dennis Hay (Divine Flavor), Vicente Del Villar (Unifrutti), Sandro Pizarro (Divine Flavor), and Sebastian Yarad (Santa Elena).
Shift from price to quality
More and more retailers are making the shift from being price focused to quality focused. According to Bon, the industry needs to get to a point where consumers know the surviving grapes are of amazing quality. "Sadly, mediocre growers will have to disappear for that to happen, but we're on that path as an industry." With the acreage of high-flavor grape varieties continuing to grow, the industry is getting to the point where only the high-flavor varieties are able to meet the demand of the market and there is no room for average and inferior quality product. When only high-flavor varieties are left, grapes will make the transition from an impulse buy to a standard item in the shopping basket.
Left: Muscat Beauty grape. Left: Autumncrisp.
Transition to Mexico
While Peru and Chile are still shipping high volumes to North America at this time, Divine Flavor is close to harvesting Cotton Candy™ grapes from its ranches in Jalisco, Mexico. "Due to high customer demand, we pruned earlier this year, extending sales by a few weeks. Many of our customers shared that the best Cotton Candy grapes they receive on a year-round basis are from our Jalisco ranches and we're trying to meet their demand," Bon mentioned. The peak season is expected around mid-April and will continue through the first of June. "We're very excited for April and May as the Mexican season is our main season and the one we dominate. We're getting to that point where Divine Flavor is capable of supplying high end grapes to practically the entire United States during the Mexican season."
For more information:
Michael DuPuis
Divine Flavor
Tel: +1 (520) 281-8328
mdupuis@divineflavor.com
www.divineflavor.com