FPPA President Lance Jungmeyer on current trade turmoil: "The industry will need to emphasize value"

Recent shifts in international trade policies driven by recurring tariff changes in the U.S. have significantly impacted the produce industry, prompting companies and organizations to reassess their global strategies. 

Lance Jungmeyer, President of the Fresh Produce Association of the Americas (FPAA), examines how the industry is navigating the uncertainty of the current trade landscape and how sustainability is driving consumer preferences.

What’s the biggest shift you’ve seen in the produce industry in the past 12 months?

The most significant change has been the focus on tariffs and trade issues—particularly the trade balance sheets. For produce from Mexico, we've been very concerned about the potential for tariffs. However, so far, goods compliant with the United States-Mexico-Canada Agreement are tariff-free. 

Our members have had to adapt by understanding how to handle tariffs—how to account for them, adjust their arrangements with customers and vendors, and manage banking strategies. These three days, when tariffs were implemented, were quite disruptive. Since then, the ongoing question has been whether tariffs will return and what they might look like. Currently, we are in a 90-day extension.

Another major development is the Tomato Suspension Agreement. The FPAA fought hard to keep it in place, but the Department of Commerce terminated it on July 14. This means a 17.09 percent import duty now applies to most tomatoes from Mexico, requiring payment that must be passed on. This has led to contracts from last year being rewritten as companies figure out how to operate under this new duty.

Tomatoes are a vital part of Mexican produce exports, accounting for 17 percent of the volume, over 4 billion pounds. Tomatoes rank far ahead of avocados in tonnage, though avocados lead in value due to higher prices. Industry players are now contemplating their future, whether to import more next year, cultivate more, or diversify into other items. The past six to twelve months have really been a rollercoaster, and the situation is still evolving.

You mentioned the tomato agreement. How are consumer preferences evolving, especially beyond tomatoes?

Consumers are increasingly gravitating toward unique, high-quality items that offer a sense of exclusivity, whether through flavor, shape, or color. This trend is evident in the rise of specialized tomatoes, like vine-ripened and fancy varieties. This also happens in the grape category, with cotton candy grapes and jellyberries being popular examples.

Mexican produce is well-positioned to meet this demand. We’re seeing innovations like larger, more attractive blueberries and experimentation with protected agriculture, shade houses, and greenhouses, producing unique and high-quality products. Consumers continue to seek items with cachet, and the industry is responding accordingly.

What trends or developments do you think retailers and importers should pay closer attention to?

Retailers should keep a close eye on standards related to water use and sustainability practices. As produce grown in greenhouses or other controlled environments often uses drip irrigation and other water-saving techniques, companies that demonstrate efforts to reduce water and carbon footprints will have an advantage.

Despite shifting political landscapes, sustainability criteria remain important to consumers. Retailers are increasingly demanding products that are environmentally responsible, reducing waste, minimizing packaging, and conserving resources. These factors are becoming integral to sourcing decisions.

Would you say consumer awareness around sustainability influences industry decisions?

Absolutely. While sustainability was once primarily about environmental responsibility, it now also ties directly into economic benefits. Implementing efficient practices reduces costs, less waste, less packaging, and lower transportation expenses, which benefits bottom lines.

Many companies are turning sustainability into a competitive advantage, viewing challenges as opportunities for innovation. They recognize that efficiency and environmentally friendly practices are not just good ethics—they're good business.

How are you approaching sustainability and environmental performance today compared to five years ago?

Five years ago, companies were beginning to realize that sustainability benefits their bottom line, saving money through efficiency. Now, it's more deeply integrated, with many seeing sustainability as a core business strategy. Reduced waste, less packaging, and more efficient resource use are tangible ways companies innovate.

Associations like ours help industry players navigate these changes. A big part of our role is advocating for market access, ensuring policies like tariffs don’t hinder trade, which directly impacts jobs and economic stability. For example, the import of Mexican tomatoes supports around 50,000 U.S. jobs, and any disruption could have significant ripple effects across supermarkets and restaurants.

What is your outlook for the coming few years?

The outlook is mixed. We might see a decline in overall tonnage sold, as consumers face higher prices across the board for goods like transportation, housing, and other essentials. This could reduce the amount they spend on fresh produce, even though they still value healthy foods.

To adapt, the industry will need to emphasize value, offering quality at a good price, and may see increased consolidation as companies seek efficiencies in a tighter margins environment. Mergers can have both positive and negative effects, but they often help companies leverage their strengths.

If you had one message for your industry partners right now, what would it be?

We're in the produce business because we love the sights and smells, and we love the aspect of being able to put a smile on people's faces when they dig into a fruit and vegetable that pleases them. And despite all the turmoil we see in the industry, whether it's issues with trade or domestically, growers having a hard time getting labor, I think it's at the end of the day, it's a refreshing thing to reflect upon the fact that we are doing good for people.

We're selling things that are alive and that make you feel alive. So fresh produce is an everyday new challenge. And I think people who are part of this industry have a hard time letting go.

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