U.S.: John Pandol offers advice over Chilean grape supply issues

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U.S.: John Pandol offers advice over Chilean grape supply issues

Grape expert John Pandol has highlighted ways Chilean grape exporters can mend the frustrations of U.S. retailers over continuity and commitment issues.

Pandol told www.freshfruitportal.com there were still great opportunities for the sector which has been in the game for more than two decades, but there was some fundamental issues that needed to be addressed in order to pave the way forward.

John Pandol

"Chile is looked at as an unreliable supplier by many retailers, and there is an opportunity to rebuild confidence in continuous supply," says the Pandol Bros director of special projects.

"For example, with the freeze in the III (Atacama) Region, many early grape exporters announced very high price expectations, which only encouraged retailers to convince California growers to store longer. Chile lost one or two weeks of market.

"Even retailers who have done fixed programs with Chile, either directly or through importers, have expressed frustration.   Every grower seems to want a program, many of which are not covered if another opportunity is available."

Pandol tells www.freshfruitportal.com the grade standard of Chilean grapes "always seems to get pushed to the lowest acceptable standard".

"Some retailers have gone back to spot buying from importers or repackers. The dollar exchange rate is better, or less bad than Europe, so we'll see if there is more pressure to ship to the U.S.A.

"There is an opportunity for better prices as food inflation is starting to move up all prices."

In December, Fisher Capespan chief operating officer (COO) Mark Greenberg told www.freshfruitportal.com the onset of new and later Californian grape varieties didn't pose a threat to Chilean grapes. Pandol too has his doubts about the effect of these varieties, but says Chilean growers will need to be aware of changing grape packaging and size trends.

"Most new varieties have been disappointing to the supermarket trade, so just because it’s a new cultivar doesn’t mean consumers view it as new or better," he says.

"There is debate whether the  pleated bags will displace standard grape bags or replace clamshells in grapes, like they have done in other products.

"With  more than 4 million boxes each of Sugraones, Princes, Scarlet Royal, Autumn Royal and Autumn King in California, all larger grapes, the size of a ‘large’ grape in the eyes of the consumer has changed.  We used to think of a big grape as more than 19mm  but 21mm is the new 19.  Even a good sized Thompson now looks small."

The retail situation

Pandol says Chile faces challenges in the way it sends its volumes at the season's end,  while growers will need to be aware of current demand for different varieties.

"The challenge of the Chilean Crimson business is not piling them up at the end of the season and, like Thompson, the misuse and abuse of postharvest," he says.

"Consumers and retailers like Crimson.  Red Globes and black grapes are everyday more marginal to the business - 3 to 5% each of consumer sales and only stocked in maybe 50% of retailers.  Red and white seedless are the hamburger – Red Globes and blacks are the soft drink.

"If Thompsons are good, retailers will stock them. The challenge is retailers have less tolerance for shrink (merma) in the store. Our biggest challenge is ourselves, misusing and abusing postharvest, holding perfectly good Thompsons for a higher price and waiting until the fruit goes bad. This is a problem with all white grapes, old varieties and new."

Peru's reliability threat to Chile

Pandol downplays the relevance of Peruvian grape supply to the U.S. in terms of volumes, but there are opportunities for the country.

"Everybody likes to talk about new things. Chile has been shipping 50 or 60 million boxes to the U.S.A. for 20 years or more.  Peru does in a season what Chile does in a week. Having said that, Peru can supply fresh seedless grapes in Dec and Jan and that is interesting.

"For most of the produce business, origin doesn’t matter. Importers are offering Chilean and Peruvian grapes the same way they offer grapes from Exporter A and Exporter B. I only know of one importer who has abandoned the Chilean grape trade in favor of the Peruvians.

"Some supermarket buyers are supporting the Peruvians because of some of the lack of reliability and ‘opportunistic diversion’ to other markets by the Chileans.

He says the main challenge for Chile is to be viewed as a more reliable supplier than Peru.

"If Peru’s  seedless supply successfully grows, and the Peruvians take care of the US market,  the conversation will change from 'Peru has to be out of the way before Chile starts' to 'we aren’t interested in Chile until after the Peruvians finish in March'. Of course, Chile will sell everything to Asia, or some other market, so it won’t matter."

Related stories: Chilean grapes need momentum to drive season, says Fisher Capespan exec


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