Interesting demographics driving berry boom, says Driscoll's CEO
In recent years the berry category has shown buoyant growth in the United States to become the number one fruit group, with similar trends seen in the U.K. and Scandanavia. While the share of strawberries in the group has fallen from 85-90% in 1990, it continues to be popular, just overshadowed by rapid growth for blueberries, raspberries and blackberries. At www.freshfruitportal.com we speak with Driscoll's CEO J. Miles Reiter about the changes the industry has witnessed, as well as trends for the industry and competition.
Reiter says the model of selling different berries together has helped raise the category in North America and Europe, with each berry "helping the other", while year-round supply has helped for consistency.
"Before each of the berries were sold apart differently and they were seasonal. Now there are quite a lot of berries available any time of year," he says.
He highlights the advent of clamshell packaging also worked wonders for the industry, helping supermarkets not only handle the sticky fruit better, but also drive sales due to their consumer convenience.
"It actually made them easier to sell together," he says.
Reiter, a grower since 1971, says the fourth reason behind the success is that berries have "done a good job", clarifying that there is still work to be done to improve quality 12 months of the year.
"The overall quality and flavor has actually improved somewhat over time."
"They're convenient to use. Blueberries, raspberries, blackberries, you can just pour out of the clamshell.
"With strawberries you just cut the end off, so it’s not much work. They’re very convenient compared to some other fruits."
While studies have shown the antioxidant benefits of blueberries that have made it considered a superfruit, Reiter thinks the biggest difference with this berry is that 20 years ago it was relatively new for the majority of people.
"They have a long tradition in a few parts of the United States where they grew wild, but in the last 20 years they’ve spread across the country, and now across continents.
"I don’t think it’s so much about the health – the health is important, but they taste good if they’re grown properly with good varieties.
"They’re convenient, they mix well with other things like breakfast or salads, so it’s this wonderful fruit that people didn’t even know about."
He says the promotion of berries sold together helps promote products that many people didn't grow up with, and now their children are eating them.
"I see that all the time. It's possible blueberries could pass strawberries in consumption.
"There's an interesting demographic that’s going to support the growth of the blueberry industry.
"You have this whole new group of consumers – that’s more true in the United States and Canada, but that is becoming the case in Europe, which is probably 15 years behind in development, and Asia's a little bit behind that."
Reiter says around 18-20% of U.S. households buy raspberries, 14% buy blackberries, 30% purchase blueberries and more than 70% consume strawberries.
"I don’t think strawberries will grow in terms of the percentage of households, but there is an opportunity to get people with really good quality strawberries year-round.
"With that, people who buy strawberries will buy more strawberries."
He adds there is still opportunity to find new consumers of blueberries, raspberries and blackberries too.
"That’s all based on the eating quality of the fruit. If we don’t supply good fruit we won’t sell more fruit, and so if we want to grow our businesses we have to supply what consumers will enjoy."
In terms of organic fruit, the executive points out the market is still growing, albeit at a slower rate than 10 years ago.
"These really big price differentials have narrowed so there’s not much difference now; that’s a good thing, not a bad thing, because the price used to be too different.
"That’s brought more consumers in; more availability and not such high prices. It’s still an important trend, particularly with young families.
"The organic consumer is a very desirable consumer. During the course of the year the organic berry consumer buys a lot more berries than just a regular consumer. Most of them buy organic and conventional."
Different markets and competition
While the counterseasonal berry market is still attractive, Reiter says it is now more complicated than it was 10 or 15 years ago, with supply to the U.S. from Argentina, Uruguay, Chile, Mexico and a growing Peruvian industry too.
"I think that a broader range of sources is going to improve consumer demand throughout the offseason, and then there is a lot of demand developing in Europe and in Asia.
"The sources a broader range of markets now than the U.S., so I think you’re going to see things shift.
"Mexico will probably take an increasing share of the U.S. market but probably won’t be so important for supplying Asia or Europe - that’s more likely to come from not just South America but South Africa too."
He says in this context fruit quality will become even more important than it is today.
"As things change there will not be room for poor varieties or inefficient farms. People will will need to grow on good land and good water so that competitiveness will increase. The opportunity is increasing as well."
Driscoll's and Chile
Driscoll's has been involved in the Chilean blueberry industry for almost 20 years, and nowadays it wholly owns its business in the South American country.
"We do expect to play a significant role now that China is open to Chilean exports. Just over the last few weeks we’ve been establishing some of our Chinese business.
"We’ll probably take that a little bit slowly at first but we’ll open up China for Driscoll's fruit from Chile.
"It's a big market, there’s tremendous growth of wealth and it's fairly broadly distributed, so there are a lot of potential consumers and there's a lot of enthusiasm for blueberries in China."