By Craig Stauffer
26 octubre 2020

From the CEO’s Desk: The Pros and Cons of Innovation in Fruit Varieties

A trip to your local grocery store’s produce aisles or your favorite fruit market looks a lot different and certainly more diverse than it did when I was a young boy accompanying my mom on a shopping trip. Depending on the season, you would likely not have many choices when looking for apples or grapes. Today we know we cannot only find almost any produce item at any time of the year, but in fact we have a huge number of varieties to choose from whether they be apples, grapes, and other produce items on our weekly shopping lists.

This is no accident. Fruit breeders and growers around the globe are always searching for the proverbial next best thing, sweetest bite, and consumer favorite. Depending where you are in the world you might see as many as 17 SKU’s (stock keeping units) on apples, 12 SKU’s on tomatoes including field grown, greenhouse grown, Beefsteak, Large Tomatoes on the vine, Cocktail tomatoes, Cherry tomatoes in multiple colors and pack types, grape tomatoes in multiple colors and pack types, Roma tomatoes on and off the vine… need I go on!

It is an exciting time in the growing industry as growers recognize the importance of taste, flavor, and shelf life. Gone are the days when yield per acre and “legs“ (the ability to ship long distances) were the matrix that growers relied on.  So, we are spoiled for choice, but when does choice become a hindrance to the grower, the retailers, and ultimately the end-user and grocery shopper?

Growers started to invest in diversifying their growing portfolio as a way to get out of the commodity trap. The goal is to position your offering in the premium category for as long as possible and have a competitive differentiator that is unique from price. Striking premium gold in the orchards and fields is only one part of this delicate venture. Once you have the new produce variety, you still need to market, promote, and pass the retailers rigorous processes to get on their store shelves. When looking at grapes for example, many retailers will carry a maximum of 3 SKU’s – green, red, and black. They are likely to green light adding one or two additional grape SKU’s that are identified as “premium”. The numbers of new grape varieties have exploded recently, which has created a lot of excitement in the category.  There are some really exciting new varieties of all colors that deliver what the grower and the consumer want.  However, retailers are resistant to identify by variety or brand many of these new varieties since they too have to back each new offering with a thorough marketing plan causing each new listing to come with a hefty price tag. Success is measured by profit per square inch.

Just as the retailers have deep investments with each new variety, growers have to calculate the logistics and costs on the growing, packing, packaging, and shipping sides of their business. It is a rather daunting exercise to not only produce the best quality, berry size, and brix – but to also have to purchase and pack all the different required pack types. If you are trying to pack 18 varieties, in multiple different pack styles – think plain packs, pouch bags, fixed-weight bags, and clam shells of different weights — it’s an extremely complex exercise.  The cost of carrying all the packaging inventory alone is enormous.  The opportunity for error on the pack line is equally enormous.

The final, yet debatably most important variable in the variety expansion discussion is the last step in the supply chain – the consumer. If the busy grocery shopper finds themselves overwhelmed or confused by the various price points and options, they will divert back to the safe and familiar choice. Another consumer pit fall is if they find the new variety once, and loved the eating experience, but then cannot find it again in a subsequent outing the buyer is left frustrated. I’ve heard for example from consumers how much they love Sweet Globe grapes – crisp, crunchy, and a fantastic eating experience. But when they try to find them at the retail level, it gets difficult. They will find a grape bag marked ‘premium’, and the grapes inside that bag sort of look like what they remember they looked like, but alas when they get them home, they are not what they expected.  Do this a couple of times and consumers will vote with their wallets and resist venturing into new categories. They will buy something that they know will deliver on the taste promise.

Taking all of this into account, we know the expansion of varieties will continue. The good news for all is that with this competitive landscape, only the best, safe, most flavourful pieces of fruit that consistently deliver will last in the marketplace. As a grower, Vanguard believes in the 10 key points below.  We believe that these must be in place when venturing into any new variety. With these at the forefront of the team you can best avoid potential pitfalls of expanding into what is likely an already crowded produce stream.

1. Understand just how big the market and niche markets are for the variety being considered

2. Identify its current and future competition, including complimentary products

3. Understand each varieties cost

4. Calculate the anticipated demand for the variety and determine if you can meet the demand

5. Work with your retail or wholesale partners early — engage them in the process

6. Collectively align packaging to meet retailer needs early

7. Secure commitments from retailers as early as possible for new varieties

8. Promote at all levels consistently by name (Protect your trademark/brand where possible)

9. Ensure your timelines allow for quality assurance and variables

10. Never compromise on taste