Year-round supply offers bonanza for savvy retailers.
Long gone are the days when the citrus set consisted of one SKU each of oranges, grapefruits, lemons and limes — maybe two if you counted bagged fruit. Today, consumers’ passion for seedless easy-peelers and full-of-flavor varietals, plus greater availability, has grown shelf space devoted to this category in the winter months and beyond.
It’s no wonder citrus contributed a whopping 6.2 percent to Produce Department dollar sales during the 52 weeks ending Aug. 27, 2016, according to data supplied by the Chicago-based Nielsen Perishables Group.
“We’re able to offer our customers a significant citrus set year-round due to the improved quality, greater availability and better pricing of imports, and this is what they are looking for,” says Scot Olson, director of produce and floral for the southern division of Grocery Outlet, an Emeryville, CA-based discount retailer with more than 230 independently owned and operated stores in six states. “That said, citrus is still highly seasonal for us, especially since we’re a limited-assortment format; but Mandarins are a big one for us and we carry them pretty much all year.”
Below are 10 ways to maximize sales of today’s citrus offerings.
1. SUPPLY ENOUGH MANDARINS
Mandarins are the king of the citrus category at Grocery Outlet, according to Olson, representing 3 percent on an annual basis and up to 10 percent of the chain’s produce sales in the peak winter season.
These sweet juicy snack fruits are equally popular on the East Coast. “Clementines and Murcotts are huge sellers, especially the 3-pound bags,” says Vic Savanello, director of produce and floral for Allegiance Retail Services, in Iselin, NJ.
Mandarins, which include Clementines, tangerines and Satsumas, are the category leader, representing 39.7 percent of citrus sales during the 52 weeks ending Aug. 27, 2016. Add tangerines to this and the two sub-categories account for 41.3 percent of citrus dollar sales, according to Nielsen Perishables Group data.
Clementines imported from Spain in the fall kicked off this craze nearly two decades ago. Since then, plantings of varieties of Mandarins, such as Clementines, W. Murcotts and Tangos, in California led to a sizeable domestic November through April supply under major brand names such as Wonderful Halos by Wonderful Citrus LLC, headquartered in Delano, CA, and Cuties, marketed by Sun Pacific, in Pasadena, CA.
“Wonderful Halos are the No. 1 Mandarin brand in the U.S. market and are in more than one-third of U.S. households, reaching an 84 percent awareness level,” says Adam Cooper, vice president of marketing for the Wonderful Company. He also reports that the Mandarin sub-category accounted for almost 10 percent of overall produce sales growth this past winter.
Mandarins will continue to increase in consumption in this category for many years to come, according to Bob DiPiazza, president of Sun Pacific Marketing. “We will have a larger supply of Tango and Murcott variety Mandarins as a result of new Cuties marketing agreements with two large growers.”
Florida citrus breeders have been developing, and the state’s growers have been fast-tracking production of a number of tangerine varieties. “We’d definitely like to regain marketshare on the East Coast and meet demand in the Northeast during the winter season with low or no seed easy-to-peel citrus,” says Peter Chaires, executive director of the Maitland, FL-based New Varieties Development & Management Corporation (NVDMC), which helps provide Florida citrus growers timely and affordable access to new citrus varieties.
Newer varieties poised to accomplish this goal include the Early Pride Tangerine, an early season, low-seeded evolution of the Fallglo; the Sugar Belle, a December-maturing fruit with Clementine and Tangelo parents; and most recently, the UF 7-6-27 or “Bingo” (U.S. PPAF), a seedless Mandarin that matures between mid-October and early November. The Early Pride and Sugar Belle are already in commercial production, while the Bingo is now being planted in small quantities, and if successful from a horticultural and marketing standpoint, will move into larger plantings.
“With lemons surging in popularity, there is a great deal of development in the category.”
— Joan Wickham, Sunkist
To fill the void when domestic Mandarins aren’t available, Seald Sweet International offers its Mandarina brand from the Southern Hemisphere from August through October. The Vero Beach, FL-headquartered company also offers conventional Clementines from June through August as part of its Southern Hemisphere citrus program.
“Retailers tend to panic now if they don’t have soft citrus available, as these are bottom line drivers,” says Paul Marier, senior vice president of sales and marketing for Quebec, Canada-headquartered Fisher Capespan LLC, which imports Mandarins and easy peelers into North America from April through October from Chile, Peru and South Africa. “Our goal during this time of year is to cover our retail customers with early and late varieties from multiple origins.”
At the opposite end of the size spectrum are two newer Mandarin varieties — Gold Nugget and Sumo. “Gold Nugget Mandarins are one of the later maturing Mandarin varieties, and it is rated by professional taste panels as one of the best-tasting citrus varieties in the world,” says Julie DeWolf, director of retail marketing for Sunkist Growers, Inc., based in Valencia, CA. “They are a bit larger than traditional Mandarins with a bumpy rind, and they are intensely sweet. We offer them in bulk, as well as variable size Giro bags, from mid-February through May.”
Sumo Citrus is a cross between a Mandarin and an orange, with a bumpy, loose, easy-peel skin and seedless, juicy flesh. Its “top knot” and size give the fruit its name. Some fruit grows up to one pound in size, giving it a distinctive look.
“Last year we had 925,000 5-pound boxes and sold out in six weeks,” says Roger Griess, vice president of sales and marketing, for Suntreat Packing & Shipping Co., in Lindsay, CA. “This year, we expect to have 3 million boxes available from mid-January to the end of March and to reach our initial goal of 10 to 12.5 million boxes with 16-week availability by 2020. Our partner in Australia is three to four years behind us, but I think we’ll see a dramatic increase from them in the next few years with availably of Sumo Citrus from late July through the first part of September.”
2. DIVERSIFY ORANGE OFFERINGS
“Navels are a staple, but Clementines took some of the stardom away from them in recent years,” says Allegiance Retail Services’ Savanello.
Oranges now rank second to Mandarins with a 26.6 percent share of category dollars during the 52 weeks ending Aug. 27, 2016, according to Nielsen Perishables Group.
“Oranges represent an average 2 percent of produce sales annually, but reach up to 8 percent in peak season and with promotions. The biggest dip is in August, September and October. Then, since we play the value card, it’s a question of pricing on imported navels versus Valencias out of California. Local citrus, and supporting local growers, is an important factor for us, too,” says Grocery Outlet’s Olson.
In Florida, there are substantial plantings of oranges with resistance to citrus greening disease on acreage previously out of production or economically unviable due to greening, according to NVDMC’s Chaires. Two of these are OLL 8 and OLL 4, Valencia-quality, late-season oranges with exceptional juice and solids that Chaires says show promise in both processed and fresh channels, especially for customers who home juice.
West Coast growers such as Sun Pacific and Orange Cove, CA-based Fruition Sales Inc., are growing high brix heirloom navels. Sun Pacific will market its Vintage Sweet Heirloom oranges for its second season this year. Fruition started breeding high brix navels more than a decade ago with availability now from mid-November to mid-May.
“Many retailers are asking for high brix navels because they want to offer customers something that tastes better,” says Eric Christensen, owner of Fruition Sales.
While navels sales are flat, says Sun Pacific’s DiPiazza, “Cara Cara orange consumption has been growing nicely for a number of years.”
Cara Caras are often called Pink Navels.
“They are available at the end of November or beginning of December and have a delicious, sweet taste and a beautiful pink internal fruit color,” says David Krause, president of Wonderful Citrus. The brilliant flesh color of Blood oranges also makes them attractive to shoppers.
“We specialize in three distinct types in order to carry a Blood orange throughout the season starting in mid-December. These are the Moro, which is the standard bearer, the Tarocco and the Sanguinelli, which we pick until June,” says Fruition’s Christensen.
Breeding work is underway to produce Mandarins with the deep pink flesh of a Cara Cara or bright red of a Blood orange, according to Mikeal Roose, professor of genetics and chair of the department of Botany and Plant Sciences at the University of California, in Riverside, CA. “The goal is to produce fruit with enhanced health benefits from phytonutrients like lycopene.”
3. LIVEN UP LEMONS & LIMES
“Lemons and limes are the two most consistent sellers in the citrus category year-round. We offer four SKUs, loose and bagged, of each,” says Grocery Outlet’s Olson.
Lemons contributed 16.6 percent of citrus dollars and limes 10.0 percent during the 52 weeks ending Aug. 27, 2016, collectively, representing more than a quarter of category dollars, according to Nielsen Perishables Group data.
“Lemons and limes showed nice increases from the prior year; and with the popularity of Mexican cuisine, the versatile usage seen on popular cooking shows and the growth of the Hispanic demographic, lemons and limes should continue to see sustained growth,” says Sun Pacific’s DiPiazza.
The main lemon deal for Vision Import Group, based in Hackensack, NJ, is imports from Mexico from July to December. “Lemons have been grown in Mexico as a commercial crop for Coca-Cola for years, but the crop shifted more to the fresh market with the decreased production out of California and Arizona. When Mexico is out of season, we import from Spain and Chile for year-round supply to our customers,” says Ronnie Cohen, vice president of sales.
On the specialty side, “we partner with Sunkist each season in a Meyer lemon promotion,” says Olson.
According to Sunkist Grocers’ DeWolf, the company offers Meyer lemons for 12 months of the year. “Thought to be a cross between a Mandarin and a lemon, Meyer lemons are a bit less tart and acidic than conventional lemons and have a smooth rind that ranges in color from bright yellow to rich, yellow-orange. They have been a favorite in the foodservice community for years, and consumers are beginning to discover them more regularly at their local grocery and club stores. Sunkist offers this variety in bulk, a 1-pound net, a newly designed pouch bag, as well as a 4-pound club size,” says DeWolf.
With lemons surging in popularity, there is a great deal of development in the category, says Joan Wickham, Sunkist’s manager of advertising and public relations. “These range from seedless lemons to pink variegated, which Sunkist branded Zebra lemons because of their unique green stripes. This lemon’s green- and white-striped exterior is striking on its own and further accentuated by its eye-catching pink flesh, making Zebra lemons a beautiful garnish.”
Fruition Sales introduced its New Zealand Lemonade lemon, trademarked the Unlemon, to retail two years ago. The company expects greater volume in the coming year. The fruit will retail in a pouch bag and in a 10-pound box.
“It’s a sub-acid piece of fruit. You can just peel it and eat it,” says Christensen. Persian limes are imported by Vision Import Group primarily from Mexico. The company also brings limes in from Guatemala, El Salvador and Colombia.
“Limes are a core item for many people. They are a favorite in Hispanic and Asian cuisines and foodies in the United States use them more now for marinating,” says Cohen.
Wonderful Citrus added a new lime brand to its portfolio earlier this year by acquiring I. Kunik, in McAllen, TX, part of the Martinez de la Torre, Mexico-based B&S Grupo Exportador, S.A. de C.V., a major supplier of Persian limes worldwide.
“Seasonally marketing to specific groups, such as foodies who use citrus in creative and festive drink recipes, can be effective.”
— Ralph Towell, Duda Farm Fresh Foods Inc.
“Wonderful Citrus is now the No. 1 lime supplier to the U.S. market, contributing to our strategy of becoming the one-stop citrus shop for all consumers,” says Wonderful Company’s Cooper. Key and Kieffer limes are marketed by Melissa’s/World Variety Produce, headquartered in St. Vernon, CA.
“Key limes are smaller, rounder and more fragrant than the Persian lime, and we carry them year-round out of the United States,” says Robert Schueller, director of public relations. “The Kieffer lime, available only from September through December, has an intense lime flavor and aroma with a very sour juice that is delicious in savory dishes and Thai foods.”
4. GIVE GRAPEFRUIT A CHANCE
“Grapefruit overall dwindles in sales every year, although it does have its customer base. Red grapefruit, for instance, is a good item and sells at a premium,” says Allegiance Retail Services’ Savanello.
“Texas-grown grapefruit, such as the red-fleshed Rio Star and Ruby Sweet varieties, is something we’re seeing good demand and production for,” says Patrick Kelly, category manager of sourcing for Robinson Fresh, headquartered in Eden Prairie, MN.
Grapefruit represented a slim 5.4 percent of citrus dollars during the 52 weeks ending Aug. 27, 2016, according to Nielsen Perishables Group data. One reason for the decline, say industry professionals, is the potentially harmful drug-nutrient interaction between cholesterol-lowering medications called statins and compounds in grapefruit named furanocoumarins (FCs). FCs stop an enzyme in the intestines called CYP3A from reducing the amount of the drug that enters the blood, thus increasing the risk of toxicity. Interestingly, citrus breeders in Israel have developed two promising varieties of low-FC grapefruit, the Aliza and Coocki — crosses between Pomelo and Mandarin — that would reduce or eliminate this harmful statin-grapefruit interaction.
“I think grapefruit will make a slow and steady comeback,” predicts Kim Flores, marketing director for Seald Sweet International. “Grapefruit is so good for you nutritionally. It supports healthy weight loss and is an amazing superfood.”
5. PROMOTE CREATIVELY
Citrus, especially Mandarins and navels, are promoted often in Grocery Outlet’s bi-monthly circulars, says Olson. “There’s in-store promotion, as well as promotion on social media. For example, some of our owner-operators will promote citrus when it just comes in, or in a big beautiful display on Facebook. Others reach out to customers via email blasts, such as showing a picture of an 8-pound bag of navels at a promotional price.”
Seasonal opportunities are ripe for citrus promotion. “Clementines are a huge item for retailers in the Northeast. Most sell 5-pound boxes at cost or less. It’s a big volume item for the holidays. Beyond this, our stores will often feature 3-pound bags in ads from Thanksgiving to Easter,” says Allegiance’s Savanello.
Seasonally marketing to specific groups, such as foodies who use citrus in creative and festive drink recipes, can be effective, says Ralph Towell, category and process manager of Duda Farm Fresh Foods Inc., in Oviedo, FL. “Also, Hispanics who use citrus in traditional ways during holidays and Asians who buy items like Pumelo for Chinese New Year, are great marketing targets. Also remember to tie in with the locally grown theme during Florida and California seasons.”
Florida Department of Citrus provides retail marketing support for fresh Florida Citrus in the United States, according to Shelley Rossetter, public relations manager for the Bartow, FL-headquartered organization. “These programs vary but can include advertisements in retail publications, in-store point-of-sale materials, giveaways and in-store sampling.”
Melissa’s/World Variety Produce offers its “California Dreamin” promotion, where all of its winter varietal citrus, except for Uniq fruit, which is sourced in Jamaica, comes from California. The company offers a variety availability calendar that includes 31 conventional and 11 organic citrus items to make retail promotional planning easier.
“This is a good way to tie into holidays and events like Cara Cara and Blood oranges for Valentine’s Day and Kieffer limes for New Year’s beverages and the Big Game,” says Schueller.
Beyond this, says Sunkist’s DeWolf, “Some of the best ways to build awareness and promote trial are with sampling programs and high-value introductory coupons, which can be executed either on pack (and redeemed instantly) or delivered electronically through retailer coupon sites or one of the many e-coupon vendors. Coupons can also be used to cross-promote varieties, such as including a coupon on a navel bag for a discount on Meyer lemons or Blood oranges.”
This season, Wonderful Citrus will spend a record $30 million on an integrated consumer campaign for its Halos brand that includes television advertising, billboards, print, national FSI’s in-store point-of-sale, public relations and more. “We believe the best way to promote our citrus portfolio is to drive demand both in-store and out of store with national campaigns that take an integrated 360-degree approach to marketing,” says Cooper.
