Few countries have seen such explosive growth in the table grape industry as Peru, which in 10 years has gone from exporting 8 million boxes to 47 million last season, recently becoming the world’s third-largest exporter.
Currently, Peru has around 19,000 hectares of table grape production registered for export, with Red Globe, Superior and Crimson as the predominant varieties.
Explaining the current state of the country, its producers and the industry, analyzing their evolution, and providing insights into the future challenges will be the main focus of the presentation of Alejandro Fuentes, general manager at Agrícola Don Ricardo, during the Global Grape Summit.
Fuentes will speak during a session called “Supplier Spotlight on Peru” at the inaugural event, which will take place on June 5 in London as part of the London Produce Show and Conference, and will bring together the most important players from the table grape industry.
Fuentes, who studied Food Industry Engineering at the La Molina National Agricultural University and received an MBA from the Kellogg Graduate School of Management Northwestern University, has previously held the roles of president of the Peruvian table grape association Provid and director of ProCitrus and ProHass, which has given him deep knowledge of the fruit sector and the challenges and opportunities it faces.
The significant growth the Andean country’s table grape industry has seen over the last few years is largely thanks to three key factors: its climatic conditions, the structure of the companies and the extensive market diversification, he explained.
One key aspect he will speak on at the summit is the factors that are shaping the table grape industry and allowed it to be so successful today, thereby painting a clear picture of the US$860 million industry's development and future opportunities for growth.
“I want to touch on the characteristics of the two production areas there are in Peru,” he said, referring to the north, where Piura is located, and the south, where Ica is located.
“Most years, except when there is an El Niño, we have climatic conditions that allow us to have great fruit condition”, which translates to greater trust in the markets of Peruvian grapes, he said.
Fuentes explained that, as the country functions almost as if it were a "greenhouse”, a huge array of agricultural crops can be grown there.
“Of all the microclimates that the planet has, Peru has 84% of them. It’s one of the countries with the largest number of microclimates in the world. It's also on the edge of the Amazon rainforest, which is an important source of water,” he said.
It is essential to understand how Peru operates as an agricultural producer in order to contextualize the growth it has had and the impact it's had on the entire agricultural industry, Fuentes explained.
He said that currently the country has 185,000 hectares of fruit and vegetable in total, and this figure is expected to continue to grow rapidly as new lands are made available and extensive irrigation projects are carried out.
“Including other projects that are in the construction process…we are talking about 220,000 new hectares, even without considering those lands that will be improved thanks to these projects,” he said. This development will help some sectors move away from rotative crops and move onto permanent crops, strengthening the country’s role as an exporter, he added.
“Peru has perhaps the most important ingredients to continue growing and to continue being one of the most important table grape players in the world.”
Another topic Fuentes will analyze during his presentation is the country’s markets.
Peru has a large number of free trade agreements with countries all around the world, which has helped to boost the table grape industry.
“Peru, in percentage terms, is more diversified than its competitors in terms of access to different markets. That is to say, the supply in the different markets is a lot more even, and so Peru doesn’t depend on any single market as much as its competitors do,” Fuentes said.
However, he said that one market in which Peru is growing rapidly in a number of key fruit exports, China, has received a declining portion of table grapes over the last couple of seasons due to the varietal reconversion from Red Globe to seedless varieties.
Part of the problem with the Asian country has been the ongoing lack of harmony between what can be sent to China and what consumers are looking for, he explained, but he attributed this largely to a lack of knowledge about newer varieties among consumers.
“Both the Chinese importers and the Chinese supermarket chains are learning which varieties work best in the country,” he said, adding that he expects China to become more important in the future, based on how the last two seasons have performed with newer varieties.
But China is not the only market in Asia that Peru is interested in - Japan is another potential destination in its sights.
“The only other relevant market that we are yet to enter is Japan, for which we have been trying to get an entry protocol for the last 10 years,” he said.
Finally, Fuentes said that an additional important aspect he will talk about is the business structure in Peru, which is characterized by vertical integration.
“With grapes, I would estimate that the top 10 most important players of the sector represent 50% of exports,” he said. “They grow the fruit themselves and they process a large percentage of what they export, and that generates efficiency in the supply chain. It means that things can be aligned in a much quicker manner.
“With the vertical integration, decisions can be made with information of very good quality, because it’s first-hand.”
Global Grape Summit a much-needed event
Fuentes went on to say that the global table grape industry is currently in a challenging period.
"We see that in various weeks of the year there is an oversupply of grapes in the markets, originating from many production countries which interact during the same commercial windows. This generates competition for quality, efficiency and costs that we have not experienced before," he said.
Therefore, there is a great need for an event like the Global Grape Summit, he said, as it will allow actors from across the global supply chain to come together and discuss the industry's panorama. It is essential to identify the role that every production region has and redesign the business for long-term sustainability, he said.
The star-studded lineup of speakers and panelists, including retailers, exporters, marketers and breeders from around the world, has been announced for the first-ever edition of the Global Grape Summit, which takes place in London on June 5, 2019. Numerous educational sessions have also been scheduled to provide attendees with insights they need to be successful in a fast-moving industry.
The commercially-focused, one-day conference, which is co-organized by Produce Business magazine and Yentzen Group, will be held at the luxurious JW Marriott Grosvenor House in Mayfair as part of The London Produce Show and Conference, the largest event in the UK - the 5th largest economy in the world - for the fresh fruit and vegetable sector. The Global Grape Summit will take place one day before the London Produce Show’s one-day trade exhibition.