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Perishable Pundit
P.O. Box 810425
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Produce Business

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American Food & Ag Exporter

Cheese Connoisseur



Chilean Avocado Marketing Goes On Despite Crop Loss

The news is cold for Chilean avocados. The Chilean Hass Avocado Committee issued this statement:

Impact of Antarctic Cold Wave on 07-08 Chilean Hass Avocado Crop

Based on a careful review and assessment by industry experts and growers of the Hass avocado production areas that were damaged by the Antarctic cold wave that hit central Chile in mid-July, the Comite de Paltas de Chile is estimating at this time Hass avocado crop losses of between 33% to 37% from last year’s record Hass avocado production figures.

Therefore this means that during the 07-08 export season — which runs from July 2007 to February 2008 — Chile will export to its international markets between 230 to 242 million pounds of Hass avocados.

The good news is that as in past years, Chile will continue to provide consumers and retailers from around the world — including those in the U.S. and the European Union — with fruit of the highest quality and maturity standards during the Northern Hemisphere’s low avocado production period.

Meanwhile, the Chilean Avocado Importers Association has reassured the trade that marketing efforts will continue even though volume is down:

ANTARCTIC COLD WAVE REDUCES CHILEAN
HASS AVOCADO CROP

CAIA to Continue Consumer & Retail Marketing of
Chilean Hass Avocados

A historic Antarctic cold wave in Chile has reduced the country’s Hass avocado crop this year. Despite the climatic setback, the Chilean Avocado Importers Association (CAIA) will continue to aggressively market and promote Chilean Hass avocados during the 2007-08 season.

“Although we will have less of a crop this year, we remain strongly committed to supplying a high volume of quality Chilean Hass avocados to the United States this season,” says Jorge Covarrubias, CAIA chairman and president of Santa Cruz S.A.

CAIA will update crop forecasts as soon as there is additional information.

“We are very excited about our consumer and retail marketing programs and believe their success will lead to increased Chilean Hass avocado consumption among general market and Latino consumers,” says Dana Thomas, CAIA board director and president of Index Fresh.

The Chilean avocado producers deserve a lot of credit. One of the largest problems in produce marketing is that so many marketers try to turn the spigot on and off depending on crop dynamics. Conventional wisdom, however, is that marketing requires a steady and consistent approach to be maximally effective.

The key is to really understand what the purpose of the marketing is. Some portion of marketing dollars may be spent specifically to boost that week’s sales, and, obviously, that expenditure can and should fluctuate. Yet much money is really being spent on brand building and that really shouldn’t depend too much on whether this week’s supplies are long or short.

With volume down, demand and prices will probably be strong. Many growers would be tempted to stop all marketing and worry about next year… well, next year. Even if dollars spent have to be adjusted down a bit due to the decline in volume, the commitment to continue the marketing effort is visionary and should be commended.

Fortunately, as cold as the winds might be in Chile, the Chilean Avocado Importers Association has a hot and spicy new spokesperson: Ingrid Hoffman, the first Latina to host her own cooking show on the Food Network, will represent the association at Fiestas de las Américas in Miami:

Ingrid Hoffmann to appear at the Fiestas de las Américas
on behalf of the Chilean Avocado Importers Association

Ingrid Hoffmann, host of the new show Simply Delicioso on Food Network, will be a spokesperson for the Chilean Avocado Importers Association (CAIA) to bring awareness to and to promote the use of Chilean Avocados.

Ingrid, a Colombian-born food and décor expert, is the first Latina to host her own exclusive cooking show on Food Network.

Hoffmann, who resides in Miami, will appear for CAIA at Fiestas de las Américas on Sept. 16. Fiesta de las Américas is a major consumer event for the Hispanic community, which will be held Sept. 15 and 16 in Santa Ana, California. With over 250,000 attendees in 2006, this Latin celebration has become one of the largest Independence Day events in the country.

Hoffmann’s show, Simply Delicioso, airs on Saturdays at 11:30 a.m. EST/PST on Food Network. She is also gearing up for the next season of her hit show, Delicioso, on Galavision. “Reaching both the Spanish and English speaking audiences has been an incredible experience,” says Hoffmann. “I am passionate about food and I want to inspire people to approach cooking in a new way. I also love introducing my culture through food, using delectable Latin ingredients, such as avocados.”

“Her shows and appearances will gain the attention of both Hispanic and general market audiences in a very meaningful way,” says Maggie Bezart, marketing director of CAIA. “Hispanics are big users of avocados, so we’ve designed our efforts to target this market. The Hispanic shopper is as important to us as the general market shopper,” continues Bezart. “Many of our programs are directed specifically to the Hispanic community and many are bilingual.”

The Fiestas de las Américas is a mega event for outreach to Latino consumers.

The weather in Chile is not controllable, but the marketing in Santa Ana, California, is. Here is to a commitment to building demand in weather both hot and cold.




Is There A Silver Lining In Chilean Snowfall?

Rick Eastes, Director of Special Projects for Ballantine Produce Company, was kind enough to pass on these photos of snow in Chile sent to him from a friend in Santiago.

Jim Pandol of Pandol Assoc. Marketing and Pandol Family Farms sent this note suggesting that despite the crop reduction on avocados, which we wrote about here, there may be a silver lining to the snow. In fact Chile could use some additional precipitation:






 

Snow is not uncommon in the foothills around Santiago. Neighborhoods at higher elevations do see snow. However, down in the city it is rare.

This cold has affected the avocados the most. Avocados in the northern areas were not heavily affected because temperatures were higher. The most affected areas were in the central part of Chile. Other fruits, such and grapes, stonefruit, apples, and pears, were not affected since they were still in dormancy. The winter has been relatively cold giving those crops good dormancy chilling hours.

Any kind of precipitation has been welcome in Chile since there have been concerns about water. However, those concerns and needs are greatest in the North. The Copiapo Valley is facing a very serious water shortage. It is expected that this water shortage could affect this year’s crop in terms of quality and volume. Water is crucial to grape sizing. If a grower cannot get enough water, he might be able to produce a crop, but berry size could be smaller and therefore volume would be less.

— Jim Pandol
Pandol Assoc. Marketing
Pandol Family Farms

We’ve found one of the hardest things to get a consumer to understand is that many times the size of the crop grows or shrinks, not based on the number of items produced but on the size of each fruit.

It is too bad the avocados were hurt. Let us hope the rest of the Chilean industry gets the water they need.




Mann Packing Promotion Links Education With Produce Consumption

The Junior Pundits — both Primo, aka William, age 5, and Segundo, aka Matthew, age 4 — are computer aces, and now the Pundit knows how to get a bargain on some educational software in time for school to start:

MANN PACKING PARTNERS WITH
LEADING EDUCATIONAL SOFTWARE COMPANY

Promotion Ideal for Back-to-School Shopping Season

Mann Packing, the category leader in fresh-cut vegetables, is partnering with Knowledge Adventure, a leading supplier of educational software to homes and schools during prime back-to-school shopping season.

As part of the promotion, Mann’s fresh-cut vegetable packages will feature a $3 rebate offer on any Knowledge Adventure software titles with the purchase of any two of Mann’s products. Over three million on-pack offers will be distributed.

Mike Jarrard, Mann President & CEO comments, “Mann’s is a brand that cares about family wellness. Good nutrition and a good education go hand in hand in that regard.”
We have been in this industry for nearly 10 years, and we know how to create really good research proposal.

For over 20 years, millions of parents and teachers have trusted Knowledge Adventure for proven results. Their popular products, such as Math Blaster and Jump Start World, are used in schools throughout the country. Jarrard concludes, “With Back-to-School shopping in full swing, we are proud to offer families and teachers the opportunity to save on these important learning tools.”

More children than ever before are growing up in homes with computers, according to a 2001 census report. Almost two-thirds of all children between ages 3 and 17 lived in homes with computers, and almost one-third in that age range have gone online.

Knowledge Adventure has sold millions of copies of its software to homes and schools and is recognized as an award-winning educational resource.

Three dollars is a good discount considering the low prices of bagged vegetables. Yet the real win here may just be the association of the Mann product with the idea of learning.

Mike Jarrard’s comment in the release that “Good nutrition and a good education go hand in hand…” is astute. There is some argument to be made that all the efforts to boost consumption through nutrition education are misguided in the same way that efforts to spot-reduce — lose fat on one part of the body — are misguided.

Just as losing fat depends on general physical fitness and caloric intake, there are relatively few people who have processed a lot of information on nutrition but are somehow inept in other areas of processing information.

Doubtless, Mann is doing this to boost its own sales, and we don’t know to what extent making software available less expensively will help educational achievement. But to the extent that this effort helps boost intellectual development and educational achievement among children, Mann may be doing the industry, and itself, a favor, as smarter, more educated, more intelligent people are better consumers of produce.




PMA Goes To Australia

Our piece, PMA Convenes First Country Council, pointed out that PMA was going abroad in a big way by establishing a “country council” to ensure its products, services and events are relevant to members and potential members in Australia and New Zealand.

Now PMA just held its Fresh Connections Conference, in Darling Harbor in Sydney, Australia. The Pundit has many fond memories of Darling Harbor, having stayed at the Novotel there 15 years ago when Peter Pokorny ran Woolworths’ produce operation and arranged for the Pundit to give the keynote address for that year’s Australian United Fresh conference in Newcastle. You can read our perceptions of that visit here.

The Darling Harbor setting was more appropriate for the event than PMA might realize. Though this was the third year PMA held the Fresh Connections Conference, this was the year to kick things into high gear since PMA established its Country Council. When the Pundit stayed at Darling Harbor, he spent an afternoon at the Australian National Maritime Museum where there was a visiting exhibit related to World War II and a movie that included Sir Winston Churchill expounding on the importance of the bonds between the “English-speaking peoples.”

PMA’s Fresh Connections Australia Conference Kicks Off
David Smith, Freshmax Holdings, Ltd., Australia/New Zealand Country Council member; Robert Nugan, Fresh Produce Group of Australia, PMA International Council member; Bill Schuler, Castellini Company, PMA Transportation Task Force co-chair; and Michael Simonetta, Perfection Fresh Australia, PMA Australia/New Zealand Country Council chairman (and emcee of the Fresh Connections Australia Conference) networked and enjoyed the opening reception in Australia, August 2. The Conference continued
August 3 with almost 200 attendees.

Now a new bond was being formed at this conference. Of course, PMA doesn’t only do events in English these days, and so it called upon Tom Reardon to give a presentation in Australia. As we mentioned in PMA Broadens Reach In Chile, Professor Reardon also keynoted, in Spanish, PMA’s recent event in Santiago.

Professor Reardon has made many contributions to the Pundit, including this piece from our mailbag entitled, China, COOL And International Opportunities.

Michael Batycki, Woolworth’s, member of PMA’s Retail Board of Directors and Australia/New Zealand Country Council and Rob Robson, One Harvest; member of PMA Executive Committee, Board of Directors, and Australia/New Zealand Country Council.

We tracked down Nancy Tucker, PMA’s Vice President For Global Business Development, just as she returned from the opening reception, and she shared her enthusiasm:

Arrived in Sydney this morning and spent all day in the second meeting of the PMA Australia/New Zealand Country Council. There is great energy and enthusiasm among these volunteers about working for the good of this industry under PMA’s umbrella. Key topics for the meeting included review and modification of key products for this market, consumer research, education and bringing new people into the produce business (increasing the visibility of produce as a desirable career) through working with the PMA Education Foundation.

This evening we kicked off the Fresh Connections Australia Conference with a wonderful reception in the Star Room of the IMAX Theater on Darling Harbor. The participants networked while enjoying great food and beverages and the view of the harbor. There should be just shy of 200 participants at tomorrow’s program, which features the following speakers and panelists.

We were also fortunate to get a few photos of the opening reception. Michael Simonetta, Perfection Fresh Australia, Chairman of the PMA Australia/New Zealand Country Council and the emcee of the event, welcomed the group by noting that those attending were a ‘who’s who’ of the vertical supply chain for the industry in Australia and New Zealand.

The sessions offered substantial educational value as the agenda makes clear:

Global Supermarket Growth & Development

Keynote Speaker:
Dr. Thomas Reardon, Professor, Department of Agricultural Economics, Michigan State University, East Lansing, Michigan, USA

Industry Panel Commentary

Moderator: Rob Robson, One Harvest

Panelists:

Robert Nugan, Fresh Produce Group of Australia, Australia

John Glover, Metro Cash & Carry, Vietnam

Ingrid Hoffma, Le Fresh International (NZ), New Zealand

 

Global Trends in Consolidation

Keynote Speakers:
William Schuler, President & CEO, Castellini Group of Companies, Newport, Kentucky, U.S.A. and Nancy Tucker, Vice President, Global Business Development, Produce Marketing Association, Newark, Delaware, USA

Industry Panel Commentary

Moderator: John Webster, Horticulture Australia Ltd (HAL)

Panelists:

David Smith, Freshmax Holdings Ltd, New Zealand

Michael Worthington, Timbercorp, Australia

Paul Moraitis, Moraitis Group, Australia

And the conference received substantial support from the local trade:

Excellent support has also been shown by conference partner Horticulture Australia Ltd (HAL) and 10 co-sponsors from Australia and New Zealand:

Amcor
Brisbane Produce Market
CostaExchange
Freshmax
Fresh Produce Group
Moraitis Group
OneHarvest
Perfection Fresh Australia
Woolworths
Zespri International

Following the event, John Baker, PMA’s representative in Australia, confirmed that almost 200 people attended the conference — to be precise 197 attendees — up 20% from last year’s event.

Michael Simonetta, Conference Chairman and Chair of the PMA Australia-New Zealand Country Council added these thoughts:

“PMA’s third Fresh Connections Conference was one of the most stimulating and beneficial local conferences I have attended.

It has set new standards in networking and information exchange for all of us in the fresh produce industry in Australia and New Zealand.

A feature of the conference was the representation and interaction from key businesses in all sectors of the supply chain, from growers to packers, marketers, retailers and service providers. It was particularly pleasing to see retail representation from supermarkets and independent retail groups alike. This is the first time I have seen all the main Australian retail groups together at one event.

As a result, networking was again rated the most valuable component of the conference.

Delegates also said insights into global trends and their impact were valuable and very well presented by the keynote speakers and panels.

Attendees spoke very highly of the event with content and networking vying for position as the key benefit of attending. For example, Robert Cavallaro, a Business Manager at Woolworths Ltd., praised the presentations for providing “the latest market trends,” while his cohort, Michael Batycki, Senior Business Manager of Produce, Woolworths Ltd., found that the “networking and interaction were most valuable.”

Australia is a big country, and it was particularly interesting that attendees seemed to think the conference worth a trip. For example, Graham Morgan, Managing Director of Bullfrog International, praised the organization of the effort and emphasized that it was “worth the effort to get here.” This is no small praise for a small conference considering that Bullfrog is located in far off Western Australia — the capital city, Perth, is 2,041 miles to Sydney!

And one North American expatriate, Dawn Gray, a Canadian who long has been active in the U.S. and who we profiled after she moved to New Zealand in our piece pundit Pulse Of The Industry: Enza’s Dawn Gray, thought PMA ought to be commended because of the impact of the event, beyond its immediate utility. As Dawn, now the General Manager for Enza/Turners & Growers, explained: “Keep up the good work PMA — our industry needs a common voice.”

Of course, the success of the conference just raises more questions for PMA and United back in the USA. As our series has been discussing, there is some question as to the compatibility of this type of international focus and a focus on lobbying the U.S. government.

After all, PMA’s international involvement has reached the point where an Australian is now holding a position on the PMA executive committee that, traditionally, leads to the chairmanship. As we discussed in Is It Possible To Have A PMA Chairman From Outside The US? and followed up with Pundit’s Mailbag — In Support Of Rob Robson, this would truly be a transformational event for PMA and certainly would color any discussions of merger between PMA and United.

A question for another day. For now, a tip of the hat to PMA and our Australian and New Zealand friends for making the conference a big success.




Serving Jingoism At An Omaha Hilton Restaurant

The Pundit family vacation ended with a few days in Omaha, where we attended a wedding. We stayed at the largest hotel in Nebraska, the Omaha Hilton, where the focus of its restaurant, the Liberty Tavern, was interesting, especially considering we just ran a piece entitled, The Problem With Food Miles. All over the hotel, there were signs explaining the philosophy of the restaurant:

At Liberty Tavern, it is our commitment to bring you the best and freshest artisan products from around the United States and only the United States.

We found that “and only the United States” a little disturbing. Now we bow to no one in the depth of our love of country, but this “and only the United States” concept strikes us as more than a little problematic:

  1. It is likely to mislead consumers. Although you could read it as saying that “artisan products” come only from the U.S. and other products can come from any old place, many consumers will read it as saying that everything served in the restaurant comes from the United States — which is not true.
  2. We are not sure what interest the restaurant is attempting to serve by this focus on “only the United States.” The menu clearly highlights the GRILLED HAWAIIAN FISH “OF THE MOMENT” and SEARED HAWAIIAN TUNA, so it is not a Food Miles or Carbon Footprint issue. The restaurant offers things like a NEW ENGLAND SEAFOOD POT PIE made with Maine Lobster, so it is not a local cuisine or locally grown initiative. There was no effort to systematically cover all the American regional cuisines, which would have been a theme. It just seems a form of jingoism.
  3. From a culinary education standpoint, the approach seems odd. Many of the artisan products have been produced in Europe for a lot longer than they have in the United States. One would think a chef would want to encourage an appreciation for fine food, whatever its source.
  4. From a business standpoint, this kind of focus seems likely to impoverish us all — don’t we want France to buy American grapefruit? Why should they if our attitude is going to be that U.S. provenance is required before food is celebrated?

We know this restaurant is at a mainland U.S. hotel — still the whole concept strikes us as odd for a Hilton, which represents itself this way:

Hilton Hotels Corporation (NYSE:HLT) is the leading global hospitality company, with more than 2,800 hotels and 490,000 rooms in more than 80 countries, including 150,000 team members worldwide.

In 2006 Hilton reacquired Hilton International, which had been spun off in 1964 — thus creating a truly global hospitality brand. With hotels in 80 countries, we might think the Hilton restaurant should celebrate the quality and diversity of foods from all over the world.

The truth is that the restaurant has food from all over the world, this “U.S. and only the U.S.” business is more marketing than substance.

Yet the fact that they think it is effective marketing indicates how consumers can be swayed by ideas such as Food Miles. The industry really should resist the temptation to grab a quick buck and stand for principles built on sterner stuff.




Pundit’s Mailbag — Chinese Produce Imports And Retail Responsibilities

We ran a short piece entitled, Garlic/Ginger Erratum, which explained that though an article we wrote under the name, More Food Safety Lessons From Chinese Ginger Recall, was correct, an e-mail announcement line mistakenly said garlic, not ginger.

We published the erratum to make clear that the recall dealt with ginger — not garlic. A produce buyer at one of America’s top food retailers sent us a note saying we might as well not have bothered:

There might not be a “recall” on garlic, but if it is from China, there might as well be one. I think you’ll find most retailers pushing away any produce supplies and/or suppliers shipping in product from China.

In light of the continued media exposure of all problems with products coming from China, it is only the safe thing for a retailer to do. Consumer confidence may be low with our own government, but that stems directly from the ease of market access that these tainted products from China have had in the United States.

Many would think it should be the government’s responsibility to keep these unsafe products out of our markets. In an environment where that control is not exerted, the retailers must stand up and take that responsibility. In fact, I think it should be the retailer’s responsibility to keep these off the shelves. Education must go along with that so that a consumer can understand why certain products are not offered.

We appreciate our correspondent taking the time to write. His letter reminds us of a piece we did with an executive at the British Retail Consortium in which we asked how it came to be that British retailers were so focused on food safety. Here is what we were told:

Q: What instigated the push for standards?

A: We had food scares that killed a few people in the U.K. Until then brand manufactures only had to produce a warrantee, saying, ‘our food is safe.’ A new law came in with a general food safety directive. It basically said you couldn’t just produce a warrantee anymore. What you have to do is demonstrate due diligence. In the event of prosecution, you would have to insure all possible precautions were taken to prevent a food safety incident. Suppose there was glass in a product. You would need to inspect premises to make sure of no foreign objects, register glass breakage, document how you cleaned the machine and cleared up the problem.

What happened was there was a huge employment of technology by retailers to inspect their suppliers. Really it only focused on retail private label products. Retailers wanted to insure their brand name was being protected. What ultimately happened was that select products needed to pass technical audits. When I worked in retail, I’d go down to do a technical once-over on safety practices. The retailer would only accept product on the condition the company passed an audit. Bigger companies were being visited by so many auditors it started to become a real burden.

The U.K. example makes us a tad skeptical that the Chinese problems will, long term, lead to retailers banishing the product. After all, in the U.K., the rise of a stern set of retail standards was driven by two factors: First that the product was typically placed under a private label — thus directly implicating the supermarket in any food safety outbreak — and then laws requiring due diligence were passed, meaning that simply getting a representation from a producer would not be sufficient to avoid liability.

In the short term, though, in produce, our correspondent is 100% correct. Very little fresh produce is imported from China, and when it is imported, it is solely to get a cheaper price and mostly on garlic, a relatively small item.

Whatever the truth about food safety standards in China, most reputable retailers are just not going to see enough upside in dealing with Chinese product to bother.

It is doubtful that this will make things much safer in the U.S. After all, garlic is typically a pretty safe product. It is almost always cooked to start with and mostly consumed in such small quantities — as a flavoring in sauces and what not — that it is hard to conceive of massive food safety problems with garlic.

Yet, in today’s world, it is not necessary for illness to occur for the food safety of a product to fall into question. Most of the time, in fact, we are now catching pesticide residues or bacterial issues through testing, not through people falling ill.

With all the consumer doubt that would arise right now from word that a Kroger, a Wegmans, a Safeway or a Publix was selling imported Chinese garlic — and the real reputational disaster that could come about if there was an actual problem — we suspect many retailers will simply walk away — at least until the problems are perceived to have passed.

Our correspondent’s reference to education is important, but it also shows the quandary the industry is in.

In the case of garlic, the issue, except perhaps in a transitory period, is not explaining to consumers why a retailer doesn’t have garlic — we can grow garlic in America, import it from Argentina, etc. The issue is how can a retailer explain that its garlic costs more than that at another retailer?

Our industry ethos is that a retailer shouldn’t promote food safety efforts. So a retailer, by this light, can’t tell the truth: “We decided to not handle garlic grown in China because we were uncertain as to the food safety standards being followed in China, so we are carrying garlic we feel confident in and that may cost more money. We think you will agree that peace of mind as to your family’s safety is worth the extra cost.”

To some extent, retailers could try to emphasize the flavor of California garlic or other qualities — but they may not be persuasive to consumers.

In effect, our letter-writer brings to mind the root cause of many of the food safety problems in the industry. In a variant of Gresham’s Law, unsafe or, more accurately, cheaply produced produce will tend to drive more expensively produced produce out of circulation.

The analogy is not perfect because Gresham’s Law functions in an environment where laws require people to accept money as legal tender — but the difficulty for a consumer of ascertaining the food safety status of any fresh produce item, combined with government pronouncements that the food supply is safe, functions in a similar way.

The desperation of the California Leafy Greens industry to get everyone “on board” with the California Marketing Agreement was not solely because of a feeling that the whole industry could be affected by any one player’s bad practices. It was also the certainty that non-signers would find plenty of markets for their sub-standard, but less expensive, crops.

The decision to not sell cheap garlic is relatively easy — how many consumers base their shopping patterns on who has the cheapest garlic? But it tells us little about how retailers would respond on higher volume items where they feel more of a need to be competitive.

Many thanks to our correspondent for his input from the retail side.

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