Cultivating Year-Round Sales Of Imported Organic Produce

Originally printed in the December 2019 issue of Produce Business.

From as close as Mexico to as far as New Zealand, produce grown without pesticides continues to arrive in more plentiful supply each year.

Few people are content to eat like their great grandparents with produce pickings limited in the winter to what’s in the root cellar. Indeed, the U.S. imported $17.6 billion in fruits and vegetables in 2015 compared to $6.3 billion in exports, according to U.S. Department of Agriculture (USDA) Economic Research Service (ERS) data, a fact that’s reflected by near 52-week supply of virtually every major produce category on supermarket shelves. Now, layer on this the growth in demand for organics.

The U.S. organic market hit a record $52.5 billion last year, according to the Washington, DC-headquartered Organic Trade Association’s 2019-published U.S. Organic Industry Survey, with fruits and vegetables representing almost one-third of all organic food sold nationwide. Put two and two together and it’s a no-brainer that imports of organically grown produce into the U.S. is on an upward growth curve too.

“Importing organics from offshore helps to fill the gaps in domestic supply,” says Jeff Fairchild, produce director at New Seasons Markets, a 21-store chain headquartered in Portland, OR, of which 70 to 80 percent of fresh fruits and vegetables sold are organic. “For vegetables like tomatoes, peppers, cucumbers, eggplant and many others, we tend to get a steady supply from Mexico. For fruit, it’s a little different. South America is the major source of supply for berries while South America and New Zealand are important sources for organic tree fruit like pears and apples. From Central America, it is bananas, mangos and melons. We don’t see as much offseason organic citrus and what is available is expensive.”

The trend for an ever-growing amount of organic produce imports shows no signs of slowing due to both consumer demand and overseas production.

“Millennial shoppers constitute much of this growth as they are the group most concerned about farming transparency and knowing the most about how their food is produced and delivered to them,” says Bil Goldfield, director of corporate communications for the Dole Food Company, based in Charlotte, NC. “Retailers, recipe-developers, food media, bloggers and other third-party influencers are spreading the organic message more aggressively than ever. Thus, demand, initially experienced in urban centers on the coasts, is now increasingly seen in the Heartland and nationwide.”

And, as organic produce moves into mainstream market channels it replicates the supply chains of conventional produce, explains David Weinstein, director of marketing for certified organic produce distributors, Heath & Lejeune, in Commerce, CA. “Just as more and more of the fresh fruits and vegetables that Americans eat are produced outside of the United States in Mexico and Canada, South America, Asia and the Middle East, more and more organic produce is coming from those areas. The reasons for these changes go beyond the produce industry. They have to do with the gradual movement of capital investment outside of the United States and into countries where higher returns can be obtained.”

That said, Weinstein adds, “The principal area in which countries outside of the United States have an advantage is in the production of tropical fruit. Moving forward, the retailers can expect to be introduced to many new and unfamiliar varieties of tropical fruit from outside of the United States.”

Here’s a snapshot of some of the organically grown fruits and vegetables now imported and from where, plus an update on what may soon be available to U.S. retailers and their customers.

A WORLD FULL OF ORGANIC PRODUCE

MEXICO About half of all vegetables and 40 percent of fruits imported to the United States are grown in Mexico, according to data from the USDA. Beyond this, the top four organic agricultural imports to the U.S. from Mexico are avocados, bananas, greenhouse bell peppers and cultivated blueberries. What’s more, dollar value increases over the past five years range from over 200 percent for avocados to over 300 and 600 percent, respectively, for bananas and greenhouse-grown bells. Mexico didn’t start exporting organic blueberries to the United States until four years ago. Also, in the top 10 of organic fruits and vegetables exported to the U.S. are field grown bell peppers, mangos, fresh lemons and garlic.

“We’ve definitely seen organic agriculture in Mexican grow,” says Lance Jungmeyer, president of the Fresh Produce Association of the Americas, headquartered in Nogales, AZ. “Much of the produce is already grown in greenhouses or some type of protected agriculture, which requires a lesser use of chemicals, more Integrated Pest Management (IPM) and other similar kinds of pest measures. This puts Mexico in a good position.”

Jungmeyer adds that the U.S. National Organic Standards Board ruling in 2017, which says that hydroponically grown produce is eligible for organic certification, could boost the volume of organic fruits and vegetables produced in Mexico, and more quickly. That’s because hydroponic production, where no soil is used, doesn’t have to undergo a three-year transition as land is required to convert from conventional to organic agriculture. Currently, there are over 100,000 acres of protected agriculture production in Mexico. This is almost evenly divided among greenhouses, high tunnels, and shade houses, according to the article, Mexico’s Agricultural Sector: Production Potential and Implications for Trade, published in the third quarter 2019 issue of Choices, a publication of the Milwaukee, WI-based Agricultural & Applied Economics Association. This compares to only 6,290 acres of protected agriculture farming in Mexico in 2004.

Organic tomatoes on the vine, beefsteak tomatoes, cherry tomatoes on the vine, long English cucumbers, eggplant and squash are grown under a combination of glass, plastic, shade and open field at Wholesum Harvest’s farm in Sonora, Mexico. Similarly, the company also grows organic Roma tomatoes and red bell peppers in its Sinaloa farm, using shade, plastic and open field production. Wholesum, headquartered in Amado, AZ, also launched its new high-flavor organic snacking tomato line this fall in top-seal packaging.

Looking ahead, Jungmeyer sees the selection of organic fruits and vegetables available to the United States from Mexico on the rise, much of this having to do with the country’s abundant microclimates “I’m seeing items like organic Brussel sprouts, berries and citrus becoming available as well as more niche items like organic jicama, turmeric and ginger for longer time periods of the year.

Beyond this, companies like Covilli Brand Organics, based in Nogales, AZ, have branched out to grow organic gold pineapple in Oaxaca, Mexico. The fruit is available from late December-early January through July.

“This is our third year and we’re looking to add growers to keep up with the demand,” says Alex Madrigal, president.

Organic citrus from Mexico is a main focus for 2019-founded company, TerraFresh Organics, in Mill Valley, CA, says co-founder and managing partner, Greg Holzman. “We import early Valencia’s from November to June. This enables retailers to sell a fair-priced 4-pound bag of Valencia’s on the shelf for eating or juicing and not take away from Navel sales. Organic red grapefruit and lemons are other citrus items we bring in from Mexico.

CENTRAL & SOUTH AMERICA Organic bananas and to a lesser extent both greenhouse and field grown bell peppers and mangos are the top organic produce exports from Central American countries such as Guatemala and Honduras.

“The countries exporting organically grown mangos to the U.S. include Guatemala, Costa Rica and Nicaragua as well as Mexico, Peru, Ecuador Brazil, Haiti, India, Bangladesh and Pakistan,” says Marissa Khan, marketing manager for the National Mango Board, in Orlando, FL. “There has been an overall (all countries combined) decrease of 23 percent in organically grown mangos exported to the U.S from 2014 to 2018, according to the USDA Foreign Agricultural Service (FAS) data. Should this trend persist, it is likely to see an estimated decrease of between 15 to 25 percent for 2020. These numbers are estimations and should be interpreted as such.”

The Dole Food Company has invested heavily in organic pineapple farms over the past decade. In turn, the company has experienced significant growth in its organic pineapple business. These pineapples are grown primarily in Costa Rica.

Organic bananas, blueberries, pears and apples are major agricultural exports to the United States from South America.

“While we do experience increases in demand for conventional bananas tied to promotional boosts and retailer programs, it is in the organic segment where we see the greatest opportunity for significant long-term growth,” says Dole’s Goldfield. The company sources its organic bananas from growers primarily in Colombia, Ecuador and Peru.

“For the first time ever, the United States will be getting small volumes of organic cherries, white nectarines and red plums from Chile.”

— Karen Brux, Chilean Fresh Fruit Association

Organic blueberries have grown into major exports to the United States during the fall and winter.

“Organic blueberry volume shipped from Chile to the United States over the past few seasons has grown from 4,538 tons in 2016/17 to 10,344 tons in 2018/19,” says Karen Brux, the San Pedro, CA-based North American managing director for the Chilean Fresh Fruit Association (CFFA). “With growing demand from the U.S. market, you can expect to see further volume increases in organic blueberries from Chile over the coming season.”

Similarly, “estimates show further growth in sea shipments of blueberries from Argentina to the United States and an increase in organic production in our country,” says Carla Ginobili, manager of the Argentine Blueberry Committee (ABC), in Buenos Aires.

Peru has increased its production and export of organic blueberries and avocados, according to Ben Johnson, president of Bridges Organic Produce, in Portland, OR.

“Demand has remained steady for the organic apples and pears we import from March through July from Chile and Argentina,” says Addie Probst, organic integrity and food safety coordinator for Viva Tierra Organic, Inc., in Mount Vernon, WA. “Working with growers in the Southern hemisphere, for instance, means that freshly harvested pears are available in our Northern Hemisphere winter months.”

One area that has increased a lot recently is the grape category, according to Jeff Shilling, vice president of procurement for FreshPro Food Distributors, in Caldwell, NJ. “There is much better availability on organic grapes coming from Chile and Peru as well as South Africa than there has been in the past.”

U.S. retailers can also expect to see a few new organic fruits this winter, says the CFFA’s Brux. “For the first time ever, the U.S. will be getting small volumes of organic cherries, white nectarines and red plums from Chile.”

EUROPE “We import organic kiwifruit from Italy. Kiwi are expected to be down in volume somewhat this year, although supplies should de be good,” says Viva Tierra’s Probst.

Organic kiwi (October-May), clementines (December-January) and ready-to-eat chestnuts (year-round) are also imported from Italy by Trucco, Inc., headquartered in Bronx, NY at the Hunt’s Point Terminal Produce Market, with cold storage facilities in Vineland, NJ.

NEW ZEALAND Apples lead the list of organic product imports to the United States from this Southern Hemisphere country. In fact, over the past five years, dollar sales have increased over eight fold, according to USDA FAS data.

“Among these are our marquee apple varieties Envy, JAZZ and Pacific Rose,” says Chris Ford, organics category manager for The Oppenheimer Group, based in Vancouver, BC.

Finally, as demand increases, retailers need to increase their organic product selection to meet those demands, recommends FreshPro Distributors’ Shilling. “The more initial demand by retailers for organic supply, the more likely the growers are going to move from conventional farming to organic farming. It’s all about the mighty buck. If there is more profit potential for growers in organics, that is where they will concentrate their future plans. This is true for domestic as well as imported produce.”

MARKETING & MERCHANDISING OPPORTUNITIES

The marketing of imported fruit is much the same as domestic fruit, according to Viva Tierra’s Probst. “Retailers can promote the freshness of fruit harvested in the off season. There is a definite flavor advantage to imported, new-harvest fruit over fruit which has been many months in storage. Our company has introduced new retail packaging that conveys our emphasis on seasonal freshness and the advantages of sourcing produce from multiple growing areas in order to follow the harvest. The new packaging will be available on our imported apples and pears in early 2020.”

The premium for organic fruits and vegetables can still be a challenge when it comes to promotion.

“The availability of organic fruits and vegetables has certainly increased year-round year. The only issue sometimes is getting something for a price that won’t slow up the volume of sales,” says Marc Goldman, produce director at Morton Williams Supermarkets, a 16-store chain based in Bronx, NY.

That said, price differences between domestic and imported organic produce is often ruled by supply and demand, says Robert Lichtenberg, director of purchasing for Earl’s Organic Produce, in San Francisco. “It costs the same whether you’re flying or sailing in conventional or organically grown produce. It’s the produce itself that costs more. However, with greater supplies worldwide in the future, organics overall should become more affordable.”

Lastly, adds Viva Tierra’s Probst, “Retailers open to stocking different sizes or varieties of fruit may be able to take advantage of surges in supply to negotiate discounts. Preset volume programs are also a good way to go, although they do require planning and commitment.”