Spring Grape Primer: Four Sales Strategies

Category profits on the move as new varieties attract more consumers.

The quality of new crop North American grapes in May determines the payday this category provides for produce retailers over the next several months. Navigating the spring grape deal poses special challenges for retailers. In the summer, virtually all the grapes come from California, so it’s easy to source. In the winter, virtually all the grapes come from Chile, so it’s easy to source.

But in the spring, retailers need to balance between Southern California (out of Coachella), Mexican grape production, and some late Chilean grapes that are able to meet required USDA standards. “Grapes, like cherries, are a high sales volume item in our departments,” says Jay Schneider, produce director at Acme Markets, headquartered in Malvern, PA, which is part of the 2,200-plus Albertsons family. “If you don’t have them, you can’t make up the sales. I rely largely on these two growing regions [Southern California and Mexico] to supply us and to plan promotional strategies. It brings a new fresher grape to market for our customers.”

The chief strategy for profiting from the spring grape season for retailers is to consider it a sprint, according to Andy Kampa, category manager at Robinson Fresh, headquartered in Eden Prairie, MN. “Retailers need to price grapes appropriately in order to move through a lot of fruit in a short period of time. Early estimates are calling for 18 million cases out of Mexico and 6 million cases out of Coachella, CA. At 24 million cases, the volume is there, but retailers need to price the product at a level that keeps customers purchasing grapes time and again during the spring season.”

1. Make A Smooth Transition

The spring grape deal is quick and lasts about eight weeks, traditionally starting in early May and finishing up at the end of June when California’s San Joaquin Valley starts production. The volume and quality of fruit at this time is a natural for retailers to kick off the spring and summer fruit season.

“Within this time period you essentially have three different growing areas (Chile, Mexico and Southern California) that come in and out of production,” says Michael Smith, president and chief executive of Sigma Sales, in Rio Rico, AZ. “It is important for retailers to be in the right growing area at the right time to assure they are getting the freshest fruit available.”

In considering when to transition from South to North American grapes, Acme’s Schneider says he looks at how the quality is relative to the market and bases his decision off of good field reports and inspections on both sides.

“The Chilean marketing order usually goes into effect around the middle of April. This means they can continue to bring in seedless grapes after that date, but they have to pass U.S. No. 1 grade on arrival, so this usually limits availability to just red grapes,” says Schneider.

The undesired rainfalls this winter and high humidity levels in Chile through January should cause it to be a shorter season, specifically on green grapes.

“This could cause the early market on grapes out of Mexico and Coachella to be elevated as there should be demand with the absence of Chilean grapes,” explains Robinson Fresh’s Kampa. In addition, “depending on how the Crimsons hold up from Chile, the market could go one of two ways. If there is a general lack of quality, there will be an extreme demand to get into the new crop. However, if the quality holds on Crimsons out of Chile, there should be ample supply through April into early May due to the fact the U.S. is the closest, most viable market for the Chileans to export to. In this scenario, there could potentially be more grapes available in the marketplace.”

With regard to start dates, “most retailers look at Mexico and California as alternative sources, although some have a preference for one or the other,” explains John Pandol, director of special projects for Pandol Bros, Inc., in Delano, CA. “We take product from Mexico and transition into the Desert (Coachella Valley). The challenge is, if there is a gap between the two regions and fruit costs go up along with a limited availability to promote. Or there might be a big overlap making the fruit cheaper,” explains Acme’s Schneider.

Industry professionals in mid-March projected grapes out of Mexico to start 10 to 14 days ahead of normal, with fruit starting harvest in the last week of April. Meanwhile, the Coachella season should start in early May.

“We usually stay away from the Mexican grape crop and wait for the California season to start,” says John Savidan, produce director for Bristol Farms; a 12-store chain based in Carson, CA. “We ride our Chilean fruit through pretty much until the California desert fruit is ready to eat. Our customers like the local product, which is why we usually wait. The down side is that early fruit is generally smaller and doesn’t eat really well. As a result, we put a lot of trust in our suppliers when it comes to making the seasonal transitions. We almost never are the first guys to go out, and always wait for fruit to size and sugar up. In our minds we want customers to get the best eating fruit they are accustomed to receiving when shopping our stores. Our vendor partners know our specs and know when to suggest moving into these types of transitions.”

To sell more spring grapes, retailers need to make sure they are stocking the grapes preferred by shoppers. Research shows 94 percent of primary grape shoppers prefer grapes from California to other origins when grapes are priced the same. What’s more, 69 percent prefer grapes from California when the price for California grapes is higher, according to the California Table Grape Commission (CTGC) 2015 Online Omnibus Survey conducted by Fleishman-Hillard International Communications’ St. Louis-based research division.

“These numbers confirm shoppers are paying attention to where their food comes from and a good way for retailers to promote local origin,” says Cindy Plummer, vice president of domestic marketing for the Fresno, CA-headquartered CTGC. As conditions continue to allow for an earlier start out of California, a retailer’s focus should also be on the late season and how grapes handle the transition back into the import season.

“The historical pattern of ‘El Nino’ years is a big desert grape deal and a late Central California (San Joaquin Valley) start. So don’t set your transition dates in stone, especially on the back end,” recommends Pandol Bros.’s Pandol.

2. Create Excitement With New Varieties

Tried-and-true spring grape varieties like Flame seedless, Princess, Sugraones, Summer Royal and Thompsons are among the best sellers at Bristol Farms and Acme Markets. Beyond this, Acme’s Schneider has tried a number of new varieties.

“Every week or two we feature a new variety. Cotton Candy obviously is the most popular. Customers love to try new things and welcome these new varieties. I see this growing every year as more supply becomes available,” says Schneider.

In Mexico, “there is a lot of trial with the few early season varieties out there. There is also some trial with midseason varieties in combination with different production techniques to try and extend the season. Most of the early varieties are Israeli genetics and the response has been mixed. The ‘I don’t use Perlettes’ crowd buys them for their visual characteristics, they tend to be greener and have better stems, but not necessarily taste. Some retailers are requesting Perlettes and Thompson Seedless as heirloom varieties. There are at least 8 genetic programs from 4 continents at various levels of trial and introduction in Sonora and there is trial with new varieties out of new growing areas,” says Pandol Bros.’s Pandol.

One of these is the green-skinned Early Sweets, grown for the first time in the Obregon region or more specifically in the Yaqui Valley, which is located 160 miles southeast of the established spring grape-growing areas of Hermosillo. The first harvest is expected in early May.

“The fruit coming from Obregon will be some of the earliest green grapes available out of Mexico,” says Sigma Sales’ Smith. “Additional acreage here is being planted now that will come into production in about two years. This is the first year harvest on the early plantings so volume will increase going forward.”

Sigma will market these grapes and other varieties such as Flames and Sugraones for the first time under the popular Melo label from the Pablo Borquez family of growers.

Prime Seedless is another newer early season green seedless grape. Fresh Farms, in Rio Rico, AZ, is one of only two growers to grow the early Prime Seedless green table grape in Mexico.

“The main problem with the Perlette is it doesn’t get sweet early,” says Jerry Havel, director of sales and marketing. “The Prime Seedless is larger, sweeter and tastier.”

The clear-cut variety out of Mexico is the Cotton Candy grape (green), which has a sweeter flavor profile that kids love, says Robinson Fresh’s Kampa. “In addition to the Cotton Candy grape, Sweet Celebration (red) and Sweet Globe (green) are the most prevalent in Mexico, as well as a few other IFG (International Fruit Genetics, in Bakersfield, CA) varieties that have been planted. In Coachella, there are a number of grape varieties including the Valley Pearl, Magenta, and Ivory, which are also known as the SHEGENE-21, Pristine, and Scarlet Royals. Most of those varieties will be available in June. We expect the Ivory variety to be a mainstay in Coachella and the Central Valley in years to come.

New this year in black grapes, Sun World International, LLC, in Bakersfield, CA, will have Sable Seedless out of Mexico and Coachella, thus extending the seasonality of this grape from June to September when added to its traditional San Joaquin Valley harvest.

“We will also have a light volume of organic Midnight Beauty and Sable Seedless brand grapes out of Mexico,” says Rick Paul, grape category manager. “The company is renewing its interest in organics due to strong customer and consumer demand and low supply availability, and putting the investment in place to be USDA-certified organic in the next two to three years.”

3. Sign Displays With ‘New Crop’

Grapes have become such year-round staples that 80 percent of respondents no longer see them as ‘exciting’, according to proprietary research supplied by VIVA International Partners, Inc., a marketing consultant firm based in Nogales, AZ. “The ‘blur’ effect of grape displays on shoppers today is something that can be addressed, especially since the tote handles are what most consumers see first, not the fruit,” says Veronica Kraushaar, president of VIVA International Partners, Inc. “It is important to announce in point-of-sale, signage or in circular ads ‘New Spring Crop,’ ‘New Variety Here.’ Or, post this on-pack, such as on the tote handles, in order to give shoppers a reason to stop, especially when transitioning from winter to spring.” Large end cap or cube displays merchandised in high traffic areas within the produce departments or in the front lobbies is how Bristol Farms showcases spring grapes.

“I think from a merchandising aspect you have the ability to call out new crop on your signage and build larger displays of local fruit. Since the fruit is a new crop it generally holds up well and bulk fruit merchandising is an option for us, and quite frankly, one of our strengths,” says Bristol Farms’ Savidan. Packaging in springtime mirrors that of other times of year.

“High graphic bags continue to be the primary pack style, followed by clamshells. We are seeing one-pound clamshells help retailers achieve a desirable price point in the pack style, as well as merchandise specialty grapes separately from bulk grape displays,” explains Sun World’s Paul.

At Acme Markets, Schneider says he tried a number of varieties in 1- and 2-pound clamshells last year with great success.

4. Kick Off the Season With Promotions

The gap between the end of green grapes out of Chile and start from Mexico leads to high demand and typically high prices, says Miguel Suarez, chief executive of MAS Melons & Grapes, in Rio Rico, AZ. “Prices are too high for retailers to promote in the first week of harvest, but one week to 10 days’ later prices start to come down and it’s a good time to begin promotions.”

There are many opportunities to promote spring grapes since there will be ample volume out of Mexico and California.

“We will have good supplies of red, green, and black seedless varieties for Memorial Day promotions,” says Tom ‘TW’ Wilson, grape sales manager for the Giumarra Companies, headquartered in Los Angeles. “Our peak production will take place from May 20 to June 20, so grapes can be promoted from the middle of May to the Fourth of July holiday.”