All manner of US fresh produce makes its way into the UK market at various times of the year, with Florida citrus, California cherries and Washington apples just some of the firm fixtures in the calendar.
This year, however, the US trade has had to draw on all its skills to navigate through a number of issues, from the global economic crisis to the ongoing concerns over food safety and returns for growers.
So how does the situation in the US compare to that in the UK, and what can the two countries learn from each other?
Fresh produce consumption patterns in the US are not dissimilar to those in the UK, with both governments keen to boost the amount of fruit and vegetables eaten to improve overall health.
Research by US fresh produce newspaper The Packer, conducted every year since 1983, has tracked trends in the purchase and consumption of fresh produce stateside for some time. The Fresh Trends studies have traced the popularity of a range of fruit and vegetables and prevailing attitudes to various industry issues. The survey, put together by representatives from The Packer and Vance Research Services, aims to find out which items are the most sought-after and report back on some of the major categories, as well as looking at wider trends.
This year, consumers were surveyed through an online study between August 14-19, 2007, and completed surveys were returned from 1,011 households.
US consumers were found to be most preoccupied with food safety, which was the number-one concern for 80 per cent of those surveyed.
Some 14 per cent of shoppers said they would be cautious about buying products from “other” countries, and nearly every person who responded in this way singled out China as the source that raised the most concerns. A total of 86 per cent of those polled said fruit and vegetables should be labelled with their country of origin.
US consumers are becoming more health-conscious and this is helping to drive sales and the range of items they buy. Nearly three-quarters of those surveyed said they are buying a larger variety of apples than they did 20 years ago and those with families seemed to be particularly keen on increasing their fruit and vegetable selection.
Bananas are the number-one item to pass the checkout, followed by apples, which overtook potatoes to gain the number-two spot this year. But potatoes remain the most popular vegetable, followed by carrots and onions.
So how does the US fresh produce industry compare to that in the UK?
Publisher and Perishable Pundit Jim Prevor has just returned from a visit to the UK, where he noted some significant developments in the retail market and made some comparisons in the States. He found that, in both countries, retailers were attempting to re-position themselves in the market in order to ride out the economic slowdown with mixed success.
“The interesting thing about my trip to the UK was the degree to which everybody seems to have decided to position themselves as a discounter,” he says. “I don’t remember Tesco as the UK’s largest discounter and even the high-end retailers such as Marks & Spencer and Waitrose are vying for who is the bigger discounter, which is very unusual.
“There is a strong sense in the UK that the depression is upon us, but we have not yet had this in the US. This could be dangerous in the long term, because companies seem determined to sacrifice their long-term position in an attempt to do better this year. Those who have spent decades building up a high-end reputation for food quality are suddenly having a re-think.”
Both in the US and in the UK, discounters are showing substantial growth and this is changing the nature of competition and the shape of the retail market, with upmarket chains first to take the hit.
“In the US, the high-end retailers such as Whole Foods have had problematic results and have had similar dilemmas as their counterparts in the UK,” says Prevor. “Wal-Mart and McDonald’s are doing well because they are both value-oriented. But in the States, there are so many more retailers, so it makes it harder for them to re-position themselves and move into that space.
“In the UK, there are about seven major chains and the competition is completely different, so it is easier for retailers to change.”
US retailers, too, are gradually changing in response to consumer needs, by moving from megastore formats to smaller footprints to appeal to communities and cut transport costs. Sales of private labels are increasing by eight to 10 per cent and newer retail store formats are mimicking farmers’ markets to make a feature of the move towards locally grown produce.
But the effects of retail evolution are likely to be felt throughout the supply chain.
The traditional sweet spots of fresh produce production may not continue to yield the same high profit margins, with premium lines and organics expected to decline in popularity as consumers focus increasingly on price.
“This poses questions for the production sector especially, because when value lines are being produced, will the same standards on food safety and sustainability be achievable, or are growers going to have to give up on what they stand for too?” asks Prevor. “Will it have to be all about price? A change like this will be felt throughout the supply chain.”
The US foodservice sector has been the hardest hit by the concept of consumers trading down, as this makes up a larger proportion of the fresh produce market than in the UK. This pattern has also emerged on home soil, where retailers have benefited from consumers turning to home-cooked meals and treating themselves to better ingredients to compensate for the fact that they have foregone eating out.
But on the other hand, consumers who are choosing to sacrifice a new car or annual holiday could actually have more disposable income to spend both on eating out and at home.
“The biggest trade down is to eat at home rather than out, which was the first thing to get hit in the US,” says Prevor. “In the foodservice sector, businesses are finding it hard to focus on anything other than staying in business.”
The challenges will inevitably encroach on the import and export trades. The US is generally viewed as an exporter of premium products, but in difficult times like these, there tends to be less demand for high-end items and importers in the UK and Europe start to look closer to home to cut costs.
Exports from the US to the UK have not increased as much as expected since the dollar strengthened against sterling. “The next 12 months will not look as good and I think exports might go into decline,” predicts Prevor. “To some extent, it’s a matter of re-focusing on business fundamentals. Low-cost producers who have not over-leveraged will survive these times and they will be in a position to invest in operations and marketing, and take advantage of the upturn when it comes. Those who have overspent are not going to be around.”
The US and UK sectors can learn from each other and from the rest of the world in order to give themselves the best chance of riding out this tough patch. Bryan Silbermann, president of the Produce Marketing Association (PMA), believes that the fresh produce industry will keep moving forward. “I think the greatest example we can set for each other is to continually learn from our fellow members of the produce supply chain from around the world,” he says. “The industry’s efforts to manage the economic downturn have driven efficiencies in production, including the move to regional growing.The merging of East and West Coast growing practices here in the States should help move to an even higher standard of production excellence.”
The fresh produce industry is in a strong position, both in the short and long term, as it is one of the few indispensable sectors.
“Everyone in the fresh produce industry will have many reasons to be thankful that they are in the food business, compared to their friends and family that might be working in less essential sectors,” says Prevor. “Whatever difficulties we may have, it does not compare to those industries that can just be skipped over - people need to eat.”
GRAPEFRUIT HOLDS ITS OWN
UK consumers have shown signs of reining in their spending, but it seems that demand for US grapefruit has not subsided.
Mike Yetter, from the Florida Department of Citrus, insists that demand for the iconic product has remained strong over the past few seasons and the UK has continued to take about 20 per cent of all grapefruit shipped to Europe.
Some grapefruit shipments go directly to the UK, while other supplies are transhipped from the two major ports in Belgium and the Netherlands.
More than five million cartons of fresh grapefruit were shipped to Europe last season. About 20 per cent, or 1m cartons, were moved through the UK, up over the previous year by 14 per cent and a significant improvement over the 2004 and 2005 hurricane-impacted seasons.
Pink grapefruit is the most popular export product.
“The increases are due to higher awareness among consumers regarding healthier eating habits, and the public relations and promotional efforts of the Florida Department of Citrus,” says Yetter. “I believe that the British consumer has come to recognise Florida grapefruit as the benchmark for quality and taste.
“We’re fortunate that we have the ideal growing conditions for citrus here in Florida. The two main ingredients are the soil and the climate. We have a sandy soil coupled with a sub-tropical climate that provides the ideal rainfall. As a result, we produce a piece of fruit that is thin-skinned, juicy, and has the proper ratio of citric acid and natural sweetness.
“Not only does it taste great, but it provides great value to the consumer. A thinner peel means the consumer gets more grapefruit for their money.”
US citrus growers and exporters are facing up to pest and disease issues, and have been battling two major diseases of canker and greening over the last few years.
“Greening is the most serious, and has the ability to wipe out our industry if we don’t find a solution,” says Yetter. “Fortunately, the citrus industry is united in an effort to combat these diseases. This year, the Florida Department of Citrus has earmarked $20m (£11.7m) in its annual budget for disease research. I’m confident that the industry has the resolve and resources to address the issue.”
But on the plus side, the Florida citrus sector has one of the safest supplies in the world. “We have been shipping fresh produce to Europe and Japan, which have some of the highest safety standards in the world, without any major issues,” says Yetter. “We have the infrastructure in place to track shipments and identify problems should they occur.”
SAFETY AT FIRST BASE
The US fresh produce industry is highly aware of food safety requirements and many categories have not experienced any problems for many years, if ever.
There are concerns, however, that bad press on a few selected categories could have a knock-on effect on the others.
This month, the US department of agriculture (USDA) pledged $13.8 million (£8.1m) to support research, education and outreach for food safety in 19 states, through the National Integrated Food Safety Initiative.
Agriculture secretary Ed Schafer announced the move on October 1. “Most often, the prevention of food-borne illnesses comes through education and safe handling practices in the preparation of food,” he says. “Sound advice about food safety is based on good research to pinpoint potential pathways of contamination, as well as effective solutions and safeguards.”
Each year, the USDA’s Co-operative State Research, Education, and Extension Service (CSREES) awards National Integrated Food Safety Initiative grant funds so that sound, practical, science-based knowledge can be shared among teachers, scientists, health professionals, researchers, farmers, food processors, foodservice workers and all who impact the safety of the US food supply.
The grant funds are frequently used to develop education and outreach programmes for consumers.
The biggest grant was awarded to Cornell University, where researchers will receive $1.6m to investigate ways to reduce the risk of contamination of fresh and fresh-cut fruits and vegetables in the fields, at harvest, and during transportation, display and purchase.
The Center for Produce Safety at the University of California Davies, set up with support from the Produce Marketing Association (PMA), will be issuing its first research grants next month, in an effort to bring better science to the industry and to help enhance food safety programmes.
PMA has hired Dr Bob Whittaker as its first chief science officer to help educate the industry on the fundamental principles of building a food safety culture across the supply chain.
The trade body has teamed up with the United Fresh Produce Association to call on the Food and Drug Administration to create a produce advisory.
The two organisations have also linked up with the Canadian Fresh Produce Marketing Association to create a Produce Traceability Initiative, to facilitate efficient and effective tracing systems.
PMA president Bryan Silbermann, pictured, says that while research suggests consumers are generally confident in the safety of fresh produce, they have grown weary of the food safety issues. “We must do a better job of safeguarding our products, and of telling the story of all that we are doing to US consumers,” he says. “They want to know what we are doing to safeguard their food. Consumers told us they want to know that the same standards apply to US growers when they operate outside the country, that imports are held to American standards, and that we are improving our food safety inspections and monitoring.”
NORTHWEST PEARS RIPE FOR THE PICKING
The Pear Bureau has worked with US retailers to develop a pre-ripening programme to make the product more convenient for consumers.
This is in line with one of the biggest trends to develop in the stateside sector for fresh and convenient products.
The treatment, which uses a similar process to banana ripening, means pears are on the shelves at a higher degree of ripeness and the wait for the pears to ripen at home has decreased.
Jeff Correa, from the Northwest Pear Buraeu, says the category is yet to fulfil its potential on this front. “For fresh produce, consumers are looking for something to eat today or tomorrow and not six or seven days later,” he says. “This means pears, which typically take four to five days after purchase to fully ripen, were being passed over by all but the core pear consumers, who were willing to wait the four or five days for pears to ripen.”
The pear ripening programme has increased purchase frequency. “With consumers buying pears and eating them within two to four days, they end up buying more pears on the next shopping trip,” says Correa. “Previously, consumers were buying pears, waiting for them to ripen at home, going back to the supermarket and not buying pears because they still had pears at home waiting to be eaten.”
The US is a minor supplier to the UK market, with supply fitting into a small window of eight to 10 weeks from mid-November to the end of January, in line with the decline in European pear volumes and prior to the first arrivals of southern hemisphere pears.
The Green Anjou variety makes up around 60 per cent of the export volume to the UK, followed by Red Anjou (30 per cent) and Bartlett (10 per cent).
Export volume to the UK depends on the size of the European pear crop, the size of the US crop, and the strength of the dollar against the sterling, as well as transportation costs.
The biggest challenge for US growers and exporters this year has been the 10 per cent reduction in their crop, following a freeze in the spring.
But the colder and wetter weather has meant there are more Fancy grade pears available, which are preferred by the UK and European markets.
“The pear industry is continuing to look into better ripening standards and to develop a set of best practices for the industry and for retailers on ripening,” says Correa. “The Pear Bureau believes that this is one key to the future success of the pear industry in the US market and around the world.”
CALIFORNIA GRAPES ENJOY SOLID SEASON
The US grape sector has continued to put in a strong performance and, with continued innovation, prospects for the category remain promising.
California grape volumes exported to the UK increased about 20 per cent between 2006 and 2007.
The window for sales stretches from May or June and October through to early December, competing with Spain, Brazil, and Greece at the later end of production.
Clay Wittmeyer, from Sun World International, admits that the challenges faced this year were many, including foreign exchange issues over the last two to three months, when the dollar strengthened against sterling. “Another notable issue is the habit the multiples have of juggling buyers in and out just when we get traction and momentum with an individual,” he says. “I think there is value in experience.”
The supplier has fared well in 2008, particularly with its early and late shipments of red and black seedless grapes to the UK.
“We continue to ship weekly and the projection is to continue shipping grapes through December,” says Wittmeyer. “Our Sable Seedless brand grape and Midnight Beauty brand grape dominated our early sales. We are now shipping Scarlotta Seedless brand grape, which by some has been called the ‘Crimson Killer’ for its large size, natural colour and outstanding production per acre. From the success this variety has attained, we plan to ramp up the volume.”
Sun World has many new varieties in the pipeline, all developed at its breeding facility in Bakersfield, California, which hosts some of the largest programmes in the world.
“We have many new acres of plantings this year, and plans for new products and increased production point a clear direction for the company,” says Wittmeyer. “Speaking for the industry, the California Table Grape Commission has done so much for our business. International marketing, trade stats, viticulture reports, retail and promotional information are just a few of the valuable resources we receive from the commission. We look forward to finishing another grape season in the next few months and, from all indications, it will be viewed overall as a success.”
No comments yet