Build Your Citrus Portfolio

Originally printed in the November 2018 issue of Produce Business.

From Sumos to Pummelos, different varieties open huge opportunities for retailers.

Oranges are still king of the fresh market citrus category – we eat 2.7 billion pounds of them every year – but consumption continues to decline slightly as more consumers are drawn toward the easy-peeler Mandarin and Tangerine varieties, or the ethnic favorites, limes and lemons.

Although a network of shippers from California, Florida and Texas can combine to supply these heavy hitters year-round, with a little help from groves in the Southern hemisphere, savvy retailers might do well to also keep an eye out for specialties that are piquing interest.

“As foodie trends continue to develop, we’ve noticed that millennials, bloggers and health enthusiasts are more inclined to try citrus fruits that are seasonal and unique,” says Monique Bienvenue, director of communications at Bee Sweet Citrus, Fowler, CA. “Specialty citrus varieties possess characteristics that vary from taste to appearance, making them a sought-out ingredient to healthy meals and specialized cuisine.

“Sampling can really help expand a consumer’s palate, especially if they are unfamiliar with certain citrus fruits. There are still many individuals who have yet to try a Cara Cara Navel orange or a Blood Orange, so offering samples can give them the opportunity to try something they normally wouldn’t think of.”

These intriguing specialties are of great interest to a few consumers and to retailers who want to earn a reputation as trendy, but there are greater changes in the citrus category that should concern every retailer.

One easy-peeler specialty that seems to be gaining traction is the Sumo Citrus, a cross between the Japanese Satsuma Tangerine and the large, juicy sweet California oranges.

The result of many years of breeding is a tangerine-orange cross that is easily the largest of the easy peelers.

“This legendary fruit, which is called Dekopon in Japan and Hallabong in Korea, is finally available for the enjoyment of consumers here in America,” according to the website of California-based Suntreat Packing and Shipping, Lindsay, CA. “It’s grown on our families’ farms in California’s Central Valley to the same exacting standards of the original Kumamoto, Japan farmer.”

Suntreat packs a full line of citrus from standards including oranges and lemons to specialties like Oro Blanco grapefruit, Gold Nugget Mandarins, and the trademarked Sumo citrus from its location in the heart of the San Joaquin Valley.

“Consumer response to Sumo Citrus has been amazing,” says Daniel Kass, vice president for sales and marketing at Lindsay, CA.-based Suntreat, the exclusive marketer of Sumo Citrus. “Consumers are fanatical about the unique flavor profile as well as the easy-to-peel, no-mess feature of Sumo Citrus. The size, shape and texture attract consumers but the incredible flavor keeps them coming back for more.”

As Suntreat’s Central Valley orchards mature and produce more fruit, this unique fruit figures to become more familiar.

“Sumo Citrus has been around for about eight years but only in the last year have our trees started to produce enough Sumo Citrus to satisfy growing consumer demand,” says Kass. “Over the next year, more consumers across North America will have a chance to try this amazing Mandarin.”

Another Tangerine cross, this one with the Pummelo, called the Honeybell, is also earning a devoted following as a large and juicy easy peeler.

“The Honeybell Minneolas are the major player right now in terms of specialties,” says Jason Myers, office manager at DLF International, Vero Beach, FL. “They’ve been increasing the past two or three years. They harvest in Florida in January and February; it’s a short season.”

Lemons and Limes

Many foodies and cooking enthusiasts are also looking with favor on the Meyer lemon, a cross between a lemon and a Mandarin that looks like other lemons but is far sweeter and less tangy.

“Meyer lemons are much less acidic and tart than conventional lemons and are fantastic for cooking,” says Julie DeWolf, director of retail marketing at Sunkist Growers, Valencia, CA. “There is so much opportunity in citrus to introduce consumers to new varieties.”

The lemon-lime category has increased in consumption the past three years by 30 percent, according to the U.S. Department of Agriculture biannual report Citrus: World Markets and Trade, and the Meyers are the sweetest of the lot.

This growth reflects both changing demographics, as Hispanics and Asians continue to become more prominent in our population, and the birth of greater interest among the rest of us in the many uses of limes.

An even bigger story is that Mandarin and Tangerine consumption increased 20 percent over the past three years, according to Citrus: World Markets and Trade, and these convenient easy peelers are breathing down the neck of the slowly fading citrus leader, the orange.

“Over the past five years there has been a shift from Navel oranges to the easy peelers,” says Peter Anderson, citrus category manager for Seald Sweet International, Vero Beach, FL. “It’s due to the ease of eating. If you buy a 3-pound bag, you get about 20 pieces for school lunches and have a few left over for snacks.”

These developments have led to a change in the short list of must-have varieties in the citrus category.

“We think Mandarins, Navel oranges, lemons, limes, and grapefruit are absolutely essential,” says Zak Laffite, chief sales officer for Wonderful Citrus, Los Angeles, which offers a full line of citrus, including proprietary varieties such as Halos Mandarins, and the recently introduced Sweet Scarletts Texas red grapefruit. “Combined, they account for more than 90 percent of citrus category dollars. Varieties such as Cara Caras make up a smaller piece of the pie but have been growing at a double-digit pace for years and should also be included.”

The Basics All Year Long

Atlhough specialty varieties add the touch that makes the category special, and easy peelers and limes are leading in a new direction, there are still old standards that must be on the shelves all year.

“A department should have grapefruit, Mandarins or Clementines, juice oranges to squeeze, Navel oranges and lemons,” says Veronique Sallin, vice president, for sales and marketing at IMG Citrus, Vero Beach, FL. “A retailer needs three geographic sources – the United States, South America, Peru and Chile, and South Africa for grapefruit.”

IMG is a Florida-based grower-importer-shipper able to offer year-round supplies of Clementines, Mandarins, Navels, Minneolas, lemons, and grapefruit.

Two geographic sources, maybe three, should be enough to keep these staples on the shelves 12 months of the year.

“The number of geographic sources a retailer needs is a function of how many citrus varieties the retailer wants to have on the shelf and whether it needs national distribution or just regional, for example exclusively on the East Coast,” says Wonderful’s Laffite. “Not all sourcing countries offer the full citrus basket or can land on both coasts. Also, volume availability for each variety may depend on how much that sourcing country prioritizes or has access to the U.S. market.”

The staples in the citrus category may change a little over the course of the year, depending largely on the availability of other fruit.

“Clementines, Mandarins, Navel oranges, grapefruit and lemons are carried by most retailers,” says Mark Greenberg, president and chief executive of Capespan North America, St. Laurent, PQ, Canada. “Cara Cara oranges and Minneolas are also usually featured in the winter months but less so in the summer months when fewer SKUs are devoted to citrus and more focus and shelf space is devoted to seasonal products such as grapes, stone fruit, berries and melons. Certainly, a department should offer soft citrus, Clementines and Navel oranges, bagged and/or bulk. All retailers will offer lemons and grapefruit. That would be the basic, essential citrus offering in all seasons.”

It is not really enough, however, to always have the basics on display.

“To really maximize sales and give the consumer the best possible experience, we recommend extending the portfolio to include several different flavor profiles,” says Sunkist Growers’ DeWolf. “Cara Cara Navels are becoming a must-have in many produce departments for their sweet flavor and unique pink interior. Blood oranges are striking with a surprising berry aftertaste and make a perfect addition to winter salads. Minneola Tangelos are bold, tangy and juicy and are growing in popularity. Pummelos are the sweetest grapefruit you will ever taste and an important specialty grapefruit offering.”

There are also varieties within the fast-growing easy-peeler category that are worth featuring.

“And then there are the later season, easy-peel Mandarins and Tangerines such as Gold Nuggets and Pixies that can extend the season by several weeks once W. Murcott Mandarins finish,” says DeWolf. “Overall, there are so many different and amazing flavors that citrus can offer, and retailers should do their best to give consumers the choice to discover their favorite.”

One of the benefits of the many new citrus entries is that there is something in the category for everyone.

“Citrus fruits really cater to all demographics because they are so versatile in the ways they can be consumed,” says Bee Sweet’s Bienvenue. “Health enthusiasts can include them in a fruit smoothie, parents can utilize their easy-to-peel quality as a healthy snack for kids, and foodies can use specialty varieties as a main ingredient in a unique vinaigrette dressing, or a baked dessert. Outlining the variety’s characteristics and flavor profiles are great selling points when it comes to gaining attention from various niche audiences.”

With all these changes in the citrus category, a very old standard is hanging on because it suits an important niche.

“We’ve been trying to bring in what you would call a juicing orange,” says Seald Sweet’s Anderson. “Although the planting of Valencias has gone down, there is still demand for them for juicing. The juice lasts longer than the juice from Navels.”

Although some consumers are taking Valencias home because the juice holds up longer in the refrigerator, a few savvy retailers use this venerable variety as the backbone of in-store juice programs.

“Roundy’s in Milwaukee, Big Y in Massachusetts, and Sendik’s in Wisconsin all have in-store juice programs,” says Anderson.

Does Size Really Matter?

The size of the citrus display may not be most important in driving sales for the category as even advocates of more shelf space cite it as one of a number of key factors.

“Promotions and sampling work, and the bigger the display, the better,” says IMG Citrus’ Sallin.

Some shippers emphasize the importance of visibility and sampling as the best way to increase sales.

“An end cap or display at the entrance of the produce section works throughout the year as it is in a prominent, eye-catching area,” says Paul Coffman, sales manager at LGS Specialty Sales Ltd., Yonkers, NY. “Promotions creating an engagement at the store-level create an opportunity to interact with shoppers and create a call to action to purchase products. Allowing shoppers to taste the fruit before committing to a purchase has proven to be a successful tool to creating more brand loyalty and sales.”

The planogram should be flexible enough to allow for change in space allotted for the citrus category at different times of the year.

“Display size will vary between the winter and summer windows, and that has much to do with citrus volume availability and competition from other non-citrus crops,” says Wonderful’s Laffite.

More important in assuring brisk citrus sales than the size of the display might be other ways of grabbing the consumers’ attention.

“Promotions do drive citrus sales, especially on easy-peelers and Navel oranges,” says Capespan North America’s Greenberg.

A taste of the fruit is helpful when merchandising the important specialty varieties.

“Sampling is one of the best ways to encourage trial, especially on new items,” says Sunkist Growers’ DeWolf. “This past season we started sampling several varieties at a time, such as regular Navels, Cara Cara Navels, Blood Oranges and Minneola Tangelos in the same demo, and by giving consumers the opportunity to directly compare each item to the others, it drove sales on all four items. The diversity of the portfolio really shines when you allow shoppers to discover their favorite flavor profile, ranging from very sweet to sweet/tart to savory to tangy.”

Size is less essential than having a visible, good-looking display of all the citrus varieties.

“I don’t think the size of the display is the most important part of merchandising citrus — it’s more about creating a destination for consumers, having all available varieties in one place with proper signage to identify the variety and the flavor profile,” says DeWolf.

“Because there are still several varieties that are not well known to consumers, providing that education is key to maximizing sales. One other way we encourage retailers to display citrus is through secondary display bins, which can extend a section without having to give up shelf space and also provide the necessary education, as well as beautiful photography, on the face of the bin,” adds DeWolf.

SOURCING CITRUS: WORLD AT YOUR FINGERTIPS

Logistics have already been developed so retailers can easily fill in the calendar with sources of all the major citrus varieties from spots around the globe.

“Having supply coming from at least two sources, such as the Northern and Southern Hemispheres, enables retailers to have a robust year-round availability,” says Paul Coffman, sales manager at LGS Specialty Sales, Ltd., Yonkers, NY. “For easy-peelers, Clementines and W. Murcotts are essential. One variety on Mandarins for consistency, carried in multiple pack sizes/types, is best — LGS offers fruit in a 5-pound box, 2-pound bag, and 3-pound bag to provide options.”

California is, by far, the single largest source of fresh-market citrus in the United States, and changes in the Golden State’s harvest show the shifting pattern of consumer preferences.

Navel orange acreage declined more than 10 percent in the decade ending in the 2016 harvest, while Valencia orange acreage dropped more than 30 percent, and lemon and grapefruit ground held steady. During that same decade, the acreage devoted to the popular Mandarin and Mandarin-hybrid varieties rippled, and production increased six-fold as the young orchards began to bear fruit.

“In the late-autumn, November through April, Northern Hemisphere sources of citrus will supply the market,” says Mark Greenberg, president and chief executive of Capespan North America, St. Laurent, PQ, Canada. “Traditional Mediterranean sources, such as Spain and Morocco, will supply some volume of Clementines and Mandarins to East Coast retailers, as will Israel. But California will dominate.”

Greenberg says retailers can remain in supply of easy-peelers and other essential varieties by following these transitions:

• In May, easy-peeler supplies will transition to Southern Hemisphere sources, and Navel oranges will follow in late June.
• Peru and Chile will offer the earliest easy-peelers, followed by South Africa.
• With Navels, South Africa will be first to enter the market with supplies starting in June and continuing through September.
• Chile will start a little later, with the earliest fruit arriving in July and continuing through the first weeks of October.
• South African fruit will arrive on the East Coast, but Peruvian and Chilean citrus will arrive on both the East and West coasts.
• Australian citrus will appear on the West Coast broadly following the Chilean timing.

Limes, meanwhile, are particularly easy to source because virtually all of them come from our neighbors to the south.

“We have limes 12 months of the year,” says Ronnie Cohen, vice president of sales at Vision Import Group, Hackensack, NJ. “95 percent of them are from Mexico, and the remaining 5 percent are from Colombia, Peru, Ecuador and Guatemala.

“I’ve been doing limes for 30 years, and consumption has increased significantly in the past five years. … People’s culinary preferences have also changed, and they are using things they weren’t before. Hello Fresh uses limes prominently. But this is a yoyo, or a roller-coaster.”

But this fast-growing commodity is reaching U.S. markets through a pipeline that has little infrastructure to ensure a reliable supply of quality fruit.

“Limes are where mangos were 10 years ago,” says Cohen. “With limes, you can get three or four harvests a year, depending on where you are, but the quality depends on the water. With lemons, you have a little more control.”

In just three years, U.S. lemon and lime imports increased from less than 500,000 metric tons to nearly 700,000 as consumption soared by more than 30 percent while domestic production remained steady.

Mexico is the largest source of the imports, but Argentina and other South American sources are becoming significant.

“Argentina and Chile have an opportunity to fill the gap because the favorable ocean shipping rate gives them a competitive advantage with California,” says Cohen.

South America may emerge as a major source of all citrus for U.S. supermarkets.

“Chile can offer the entire citrus basket, prioritizes the U.S. market and can deliver to either coast,” says Zak Laffite, chief sales officer for Wonderful Citrus, Los Angeles. “South Africa, on the other hand, delivers primarily to the Northeast and cannot offer lemons because of U.S. phytosanitary requirements and restrictions. … To offer the full basket throughout the counter-seasonal window, a retailer will at least need to source from four countries.”

Global Storm Clouds

A combination of crop disease and bad weather has led to a temporary slump in global citrus production, especially of juice oranges.

“Global orange production for 2017/18 is forecast to tumble six million metric tons from the previous year to 47.8 million as unfavorable weather leads to smaller crops in Brazil and the United States,” according to Reed Blauer, U.S. Department of Agriculture commodity analyst for citrus, in his report, Citrus: World Markets and Trade. “U.S. production is estimated to fall 24 percent to 3.5 million tons as unfavorable weather and citrus greening disease continue to cause fruit to drop in Florida before it is ripe.”

This continues a 5-year slide that has seen Florida orange production, largely for juicing, plummet by more than 60 percent, while the California harvest has remained relatively stagnant.
The other major player in juice orange production has also had recent weather-related troubles.

“Brazil’s production is forecast to fall 23 percent to 16 million tons as unfavorable weather resulted in poor bloom and fruit set,” according to Blauer. “South Africa’s production is expected to rise 8 percent to 1.5 million tons. Exports are forecast at a record 1.2 million tons and account for 25 percent of global trade.”

Although the supply of Florida juice oranges is plagued by the greening disease, the state’s growers are still contributing to the fresh-market pipeline.

“We send grapefruit, Tangerines, and Navel, Valencia, early gold, and Hamlin oranges out of Florida,” says Jason Myers, office manager at DLF International, Vero Beach, FL.

Mandarin and Tangerine production worldwide appear to be relatively stable. And the global supply of lemons and limes should be a bit more robust this year.