For more than 12 months, importers have been complaining of the difficulties in the grape market. This past quarter has seen a difficult end to the South African season give way to a decent start to the Chilean campaign, only for the latter to run aground in the last month as a glut of white fruit appears on the marketplace and indifferent quality abounds.
With the Indian season for white fruit now picking up momentum for some importers, others complain that growing areas in the sub-continent have had their own issues. Rain at crucial points in the growing season - particularly in Hyderabad - looks likely to have caused quality problems in the condition of the fruit, and will therefore shorten the potential six-week window the Indians usually enjoy to just four weeks.
“People are now talking about airfreighting in Mexican supplies to cover the wide gap that is looming at the end of May, as Egypt and Israel are both likely to be late,” laments one importer.
The situation on red fruit is different, with the Chilean season still going strong, and most suppliers in the UK marketplace reporting that fruit from the South American source is likely to hold up until the end of the month.
“However, there could be some quality issues in that late fruit too,” warns one industry insider. “There is some lovely red grape around, but it is a question of sorting through, as there is a lot of waste-prone fruit.”
Certainly the biggest challenge in May is a glut of white fruit from Chile, according to another industry source. “If you look at the figures for Thompson Seedless, the amount shipped in the last two weeks of March this year was 50 per cent more than ever exported before during that period, at 8.5 million cartons. They had rain on March 8 and, although a lot of people had finished packing by then anyway and others took it as a good indication to stop, port strikes then affected exports so that in the last fortnight of March, loading was the heaviest it has ever been.”
The same source points to a “feast and famine” pattern throughout the season. Some report the situation was so bad, with fruit short out of South Africa and Chile starting late, that price points were pushed up to slow demand, only for product to come on stream in greater volume after Easter to be met by waning consumer demand. “People have just not gone back into grapes since Easter, and if the retailers have achieved even 60-70 per cent of their pre-season programmes I would be surprised,” says one analyst.
The ideal of one country or region’s grape season dovetailing neatly with the next is not an unattainable nirvana. In fact, it seems that producers and exporters around the world have done so well at carving out their own niches that there is precious little overlap to cope with the unexpected. “Everyone knows which window is theirs, and these have been well defined for a few years now, to the extent that there are very few options should plans need to be changed,” says the insider. Add to this the vagaries of global weather patterns that look set to stay, and it is easy to see the predicament of those trying to give their customers 12 months of seamless coverage - bringing in from more than one country just in case is just not an option.
But most worryingly, what has emerged this quarter is that the rate of sales has slowed. “The head of steam that is the South African season has just not been there this year,” says one importer. “It seems that if we have a good South African season, then that really sets the tone for the rest of the year.” But with unseasonable rain in South Africa, the season for its exporters did not really go to plan. “We saw this last year too - a tricky South African season leading into a difficult Chilean season too,” says the same importer.
Looking at sales volume and grape movement, this theory seems to hold up; some 40 per cent of annual consumption is during the South African and Chilean seasons from January to March, so if this period is beset with difficulty, the impact on sales and the market will surely be felt. “So if we don’t get a good season from the southern hemisphere, we get into demand issues as the months progress,” says one importer from the southern hemisphere.
Another developing trend that is worrying the sector and having a negative impact on demand during the first quarter of the year, is the amount of shelf space given over to table grapes.
“The retailers are just not giving grapes the space they did 10 years ago,” says one supermarket supplier. “You used to see 25 to 30 facings of grapes at the big stores maybe 10 years ago, but that number has been dwindling. Now they are all rethinking their planograms, and we are not getting the shelf space for grapes we used to.”
The winner in this scenario is undoubtedly citrus. There are more late season easy-peelers available than ever before, and they are selling well and proving popular with customers.
The industry-wide figures reported by one importer certainly appear to give cause for concern if you are in the grape business. To the end of March, total expenditure on grapes rose by five per cent, but volume declined by 4.7 per cent. And where white seedless volume declined by 11 per cent, there was only a 1.2 per cent increase in red grape uptake; a very different picture compared to that of recent years, especially as expenditure on red seedless fruit is up 14 per cent and that on white is 2.9 per cent down. “It is not a good picture,” says the importer. “What we want to see is a five per cent increase in volume and a 10 per cent increase in expenditure; increasing expenditure but decreasing volume is pushing grapes back into the luxury category.” The total market has also fallen in volume by 10mkg year on year. “The grape bubble might be bursting,” he adds.
Looking forward to the next quarter, senders to the UK market and their receivers alike are hopeful that the glut situation will resolve itself. “We are nearly always short in May, but not this year,” says one supermarket supplier. “I think people will try to stretch out what they have from India, and then get first fruit in by air from Mexico, Israel and Egypt. There is Indian fruit in store now because of the glut from Chile, but anyone putting fruit into store now is taking a risk. This time six weeks ago we were short of white grape. Now we have a lot, but give it a couple of weeks and we will be short again.”
But of course white is not the only grape and, happily, the situation on red and black grapes is more stable. Supplies of good quality Crimson from Chile are on the market, but volumes of the popular late-season variety have not been as large as the sector had hoped. “We are hoping the Chilean Crimson links with Flame from Egypt, but we are concerned there could be a gap opening up before that comes on stream in mid-June,” says one supplier.
Black grape has now moved into supplies of Autumn Royal, along with Sugrathirteen (Midnight Beauty).
DESERT BEARS FRUIT FOR SECTOR
the big question at this point in the season is ‘when will Mexican and Californian grapes start?’, and it looks as though both sources will have normal start dates and full crops, says John Pandol, of Pandol Bros, in California, who is looking forward to Mexican grapes from ‘the desert’. I am optimistic for the Mexican window in the marketplace.
They have both had good chilling in the winter, and we are looking at box number one of Perlette coming in from Mexico on May 5, building to reasonable volumes in the week of May 12. Flame will be about three to five days behind that, and Sugraone should be into volume by the end of May. Sometimes there is concern that there might be overlap between Perlette and Sugraone, but it does not look like there will be this year.
Hermosillo represents about 70 per cent of our Mexican grape deal, and the rest is from Caborca. As far as the UK is concerned, it is generally the earlier part of the deal that is of interest, and the UK imports throughout the first 60 per cent of the season, and not the last 40 per cent.
It is expected that the UK will be buying aggressively from Mexico as soon as it can, and will continue to do so throughout May and into June. Hopefully, there will then not be too much Mexican fruit in the pipeline for when Mediterranean sources come on stream.
Looking at the market, I would say the large retail organisations that are required to plan well in advance are having some trouble now, and it is those quicker, more nimble, just-in-time management models that are doing better.
Our view is that this is probably the toughest time of year in grapes. When sources move from the northern to the southern hemisphere, there is some overlap, but in the spring, when the southern hemisphere comes to an end, there tends not to be any overlap.
Of all the transitions, the one from the southern hemisphere to the desert and then to the temperate zones - the Mediterranean and California - is definitely the most challenging part of supply. If folks try to plan this period too far ahead and insist on putting programmes together, they can set themselves up for failure and end up promoting when there is nothing there. Planning too far out makes it hard to adjust, and I would say that year in, year out, the desert is one of those environments where operators are more nimble.
Looking ahead, water is the limiting factor for increasing plantings in this part of Mexico, and growers are already managing the total of amount of water that can be pumped. The moratorium on wells put in during the 1950s has been re-adjusted three times as technology has improved, but now, unless there is some major project to divert a river from the south to the north, plantings will be fairly stable.
The Pandol organisation has evolved into a multinational company, with ownership in the US, Mexico and Chile, from its California base. Its operations consist of the growing, harvesting, procuring, packing, coldstorage and shipping of fresh fruit, with grapes being the primary product.
The Pandol family has been involved in international trade for more than 50 years, and the company was established almost 100 years ago.
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