Posts Tagged “COVID-19”

Report: Inflation Causing Shoppers to Buy Less as Produce Prices Rise

By |

Consumers are more concerned about inflation than COVID-19 these days, according to the monthly primary shopper survey series by IRI in partnership with Anne-Marie Roerink, president of 210 Analytics.

“In January, 38% of the population were extremely concerned over COVID-19, which was down sharply from 66% in April 2020,” Jonna Parker, team lead for IRI Fresh, said in a news release. “Shoppers are very aware of food inflation (89%) and the vast majority (95%) worry about it.

“In total, 42% of shoppers are extremely concerned about the price increases they are seeing across the store — which means food inflation has more people on high alert than COVID-19 as of January 2022,” Parker said.

Like the inflated prices of products overall, fresh produce prices are also higher than last year.

The combined effect of concerns over COVID-19, inflation and supply chain challenges explains why shopper demand remains in flux as we enter the third pandemic year, Roerink said. In 2022, IRI, 210 Analytics and the International Fresh Produce Association continue to team up to document the dynamic marketplace’s impact on fresh produce sales.

The January survey showed several in-depth findings about fresh produce sales, volume, prices and shopper behavior.

In January 2022, the price per pound for total fresh produce increased by 9.0% over January 2021. The latest 52-week look is milder, at 7.1% increase, given the much milder inflation in the second quarter of 2021. Vegetable inflation is far below average, but fruit prices increased by nearly 14%.

“Consumers are aware and concerned about the inflation they are seeing,” Joe Watson, vice president of retail, foodservice and wholesale for the IFPA, said in the release. “And as a volume-driven business, the industry is concerned, as well, and doing everything in its power to get adequate supply to the stores and keeping prices down.”

The consumer price index increased 7.5% for the 12 months ending January 2022, the highest increase in 40 years, according to the Bureau of Labor Statistics.

IRI-measured price per unit for all food and beverages in multioutlet stores, including supermarkets, club, mass, supercenter, drug, military and other retail food stores, also shows that prices continued to rise over and above their elevated 2020 and 2021 levels.

Perishables, including produce, seafood, meat, bakery and deli, had the highest year-over-year sales growth in 2021, at +6.2% out of all food and beverages. However, fresh produce sales gains were below average, at +4.4%. Frozen foods had the highest increase versus 2020, at +26.0%.

From a dollar sales perspective, January 2022 was another great month for fresh produce, surpassing the records set in 2020 and 2021.

However, dollar gains were inflation-boosted while units and volume sales declined year on year.

“The risk in the current levels of inflation is volume pressure,” Watson said in the release. “At the same time, it is hard to measure the effect of supply chain disruption, several winter storms affecting the Northeast and the impact of frozen and canned purchases on fresh produce sales. In all, January 2022 sales still tracked ahead of January 2020, which was not yet affected by the pandemic purchase patterns.” 

Each of the five January weeks generated $1.3 billion or more for the fresh produce department, with the week ending January 16 being the biggest, at $1.43 billion. While year-on-year dollar sales were higher each week, volume sales were down. Year-on-year decreases varied from -1.7% the week ending January 16th to -6.2% the first week of the year.

“Our monthly shopper surveys are finding that consumers are hyperaware of inflation and are trying to mitigate the increases as much as possible,” Parker said in the release. “And that is exactly what we are seeing in recent trip baskets. On average, people are spending roughly the same amount of money per trip, but they have many fewer items in their baskets.

Saving by buying less is typically one of the later money-saving measures during periods of high inflation, but with the lack of promotions and already cooking a lot more at home, consumers are drawing on the lessons they learned and fine-turned during the Great Recession,” she said. “For many, that means buying less quantity and we are seeing that very clearly in fresh produce.”

January 2022 gains were down from the fourth quarter growth numbers across the board. Year on year, vegetables dropped into the negative.

Despite above-average inflation for fresh produce, its share of dollars remained below average in January 2022. Shelf-stable fruits had a very strong January, with year-on-year sales gains of 7.5%. Both frozen and shelf-stable are heavily impacted by supply chain disruptions and assortment, and inventory levels have been down significantly over recent months.

January Fresh Fruit Sales

“On the fruit side, all top 10 sellers gained versus a year ago with the exception of bananas,” Parker said in the release.

In a change from 2021’s reporting methods, this year’s reports will show the increase in dollars and the increase in volume versus a year ago.

“The difference between the two percentages is a close match for inflation on a per-pound basis, though lower promotional levels also play into higher dollar gains,” she said.

For instance, while January 2022 avocado dollar sales were up 13.3%, pound sales were down 12.4%, which would translate into inflation of about 26% on a per-pound basis, Parker said. In looking at the actual numbers, the average price per pound for avocados in January 2022 was up 29.4% versus a year ago, while promotional levels were down by 15.4%.

“This new reporting will help provide a better look at the effects of inflation, plus less promoting, on the dollar performance,” she said.

January Fresh Vegetables Sales

“The top 10 sellers on the vegetable side had a mixed performance in terms of dollar sales growth but has been very consistent in makeup,” Watson said in the release. “Tomatoes, potatoes and packaged salads have been the top three sellers for many months running. The importance of salads is further underscored by lettuce sales, in fourth place.”

Carrots had the strongest volume growth performance, pulling even with year-ago levels.  

What’s next?

The marketplace disruption caused by inflation, supply chain challenges and COVID-19 is not showing signs of letting up any time soon, the report shows.

Shoppers are reacting several ways:

  • At 82.4%, the at-home share of all meals reached its highest level in a year, which favors spending at food retail;
  • At the same time, the inflationary levels in retail have two-thirds of shoppers looking for one or more money-saving measures. Inflation will likely continue to drive dollar gains for most categories in the foreseeable future but is pressuring unit and volume sales;
  • For the first time since the onset of the pandemic, a greater share of shoppers (29%) feel their financial situation a year from now will be worse versus better (23%). About half, 48%, think it will be unchanged. This outlook may prompt a greater focus on money-saving measures beyond the current marketplace behaviors alone; and
  • Continued rising inflation and shortages are driving stock-up behaviors among 42% of shoppers. While 58% do not buy more than they need, 14% stocked up on one or more items out of concerns for continued price increases and 19% stocked up out of fear that the item will be out of stock next time. 

Read more »

New Zealand is Planning on Record-Breaking Kiwifruit Volume

By |

New Zealand’s 2022 kiwifruit harvest has kicked off with the first crop being picked February 17 in Te Puke and more kiwifruit to be picked around New Zealand over the coming months.

The 2022 season has the potential to be another record-breaking year with more kiwifruit produced than ever before. A forecast of at least 190 million trays will need to be harvested, overtaking last year’s record of over 177 million trays. On average, each tray has around 30 pieces of kiwifruit.

Zespri’s new RubyRed variety is picked first which is then followed by the Gold and Green varieties. The harvest traditionally peaks in mid-April and runs through until June.

The sweet, berry-tinged tasting Red kiwifruit will also be picked for supermarket shelves in New Zealand and some overseas markets this year. 2022 marks the first year that RubyRed will be sold as a commercial variety.

Zespri’s Chief Grower, Industry and Sustainability Officer, Carol Ward says, “With this season’s harvest about to commence, growers and the wider industry will again be following all government protocols and working hard to safely pick, pack and ship what’s expected to be another bumper crop of at least 190 million trays, maybe more.

The success of the 2022 kiwifruit harvest hinges on the ability for industry’s supply chain to operate effectively under the quickly changing COVID-19 settings. The industry requires 24,000 people to pick and pack the crop.

However, forecast surges in Covid-19 infection rates are expected to restrict the availability of New Zealanders. In addition, the opening of New Zealand’s borders is expected to be too late to replace the 6,500 backpackers required for harvest.

New Zealand has some 2,800 growers who produce kiwifruit across over 32,124 acres of orchards between Kerikeri in the north and Motueka in the south.

CEO of New Zealand Kiwifruit Growers Inc. (NZKGI), Colin Bond says that the industry has built experience over the past two years on how to operate a harvest under COVID-19 restrictions. “The health and safety of our workforce is our first priority and NZKGI is working continually with government agencies to develop operational processes to mitigate COVID-19 infections”.

The industry is working collaboratively to do everything we can to get all the fruit off the vines – and that must be done in a way which puts our people first”.

 

Read more »

Keeping It Fresh: Produce Season Challenges

By |

By Brendan McCallum, ALC Rochester

With every produce shipping season comes a new set of challenges, and the 2021 season may be the most challenging we have ever seen. The impact of COVID-19 on the economy has been massive and unprecedented, with every industry being affected in one way or another. While many industries suffered during this time, the agriculture industry saw volumes increase. Add on the usual surge in volume during the produce season, and you see an extremely tight capacity situation.
Shifting focus to the Northeast, which has its heaviest peak of volume in August/September, relying mainly on the production of apples, corn, and blueberries. In 2020 we had seen increases in produce sales within these major Northeast crops, only to see these numbers increase further coming into 2021:

  • Total corn production increase estimated at 6.5% between 2019 and 2020, with that trend continuing into 2021, which is in part due to corn exports increasing because of high demand from China and other importers. 
  • In New York, apple production is expected to increase in 2021 due largely to improving export markets and continued strong domestic demand.
  • Coming off a 2020 drought season, Maine has shown improvement in blueberry production in 2021 and will see continued improvements, due to further education/research on climate adaptions.

These are just some examples that will make up for a challenging peak in the Northeast produce season. Around this time, carriers will devote trucks to moving high crop volumes, diminishing available capacity throughout the country. This causes spikes in truck rates, which immediately impacts the ability to book shipments into or out of the affected and nearby states. It is important to apply advanced preparations and have a strategy in place to adapt to various seasonal demand changes. This is the season in which relationships built throughout the year with carriers becomes so important. Having people you can rely on to ship these products during a trying time will help mitigate disruptions and frustrations, ensuring continued success for everyone involved.   

****


Brendan McCallum is a transportation broker in his first year at the ALC Rochester, office. He has three years of previous experience working in Intermodal Logistics. Brendan attended The College at Brockport where he obtained a Bachelor’s Degree in Sport Management.     

Read more »

Spending on Eating Out Plunges in 2020 Due to COVID-19 Pandemic

By |

A nearly 20% decline in spending on eating out occasions contributed to a 5% decline in food spending in 2020, according to the USDA.

In a report on food expenditures, the USDA said 2020 U.S. spending on food totaled about $1.56 trillion, 5.3% lower than the $1.65 trillion spent on food in the U.S. in 2019. Last year was only the second time annual total food expenditures decreased over the last 25 years.

The only other time spending decreased, notes the USDA, was in 2009 during the Great Recession. 

The 2020 decrease in total food spending was driven by an 18.3% drop in spending at restaurants, cafeterias, and other eating-out places.

Because of the additional cost of eating away from home, that decrease outweighed an 8.5% jump in food-at-home (FAH) spending.

For the past 25 years, U.S. food annual total expenditures and the share of food-away-from-home showed steady increases, with the highest share of food away from home spending occurring during the summer months.

The coronavirus COVID-19 pandemic limited mobility of U.S. consumers and led to an economic recession for most of 2020, disrupting historical trends in food spending,” the USDA report said.

In April 2020, U.S. consumers spent about two-thirds of their food dollars at food at home retailers (grocery outlets), the highest value on record.

The last quarter of 2020 saw monthly increases in food at home spending, an expected outcome of colder weather and holiday meal preparation, which resulted in record-high food at home spending in December.

On the other hand, food away from home spending decreased in November by 10% and showed a slight increase in December but remained well below 2019 levels.

“While COVID-19 vaccine distribution for select groups began in the United States in December 2020, the post-pandemic landscape of the food economy remains unclear,” the USDA said.


 

Read more »

Prepackaged Fresh Produce Sales Soar Amid COVID-19 Pandemic

By |

CLEVELAND — A new Freedonia Group analysis projects US sales of fresh produce packaging to grow 3.7% per year to nearly $7 billion in 2024, as demand continues to rise among both consumers and foodservice establishments for produce sold in some form of packaging – including pouches, bags, and rigid plastic containers.

Among the key drivers of growth will be increasing sales of ready-to-eat (RTE) salads, as well as pre-cut produce such as apple slices, melon spears, and carrot sticks – which are typically sold in clamshells, cups, and other plastic containers. Sales of these and other prepackaged fresh produce have soared during the pandemic due to:

  • surging grocery sales – including more packaging-intensive online grocery orders – as consumers began eating out far less and cooking in way more
  • increased concerns about the safety of loose bulk-bin items that have been handled by others in stores
  • rising demand for convenience foods, including RTE produce, which require minimal or no prep before consumption, unlike their unpackaged counterparts, which often need to be washed, peeled, and/or chopped

Sales of plastic containers increased 5% in 2020, the biggest gain of the main produce packaging types – boosted by their intensive use with RTE produce. The sharp increase recorded in organic produce sales further bolstered plastic container demand, as these premium brands tend to employ value-added rigid packaging for product differentiation purposes, whereas non-organic brands tend to employ bags or pillow pouches due to their lower cost.

Through 2024, sales of plastic containers are expected to outpace those for all other major packaging categories, as clamshells and other plastic containers continue to supplant commodity bags and pillow pouches due to their good protective and display properties.

About the Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is the premier international industrial research company, providing our clients with product analyses, market forecasts, industry trends, and market share information. From one-person consulting firms to global conglomerates, our analysts provide companies with unbiased, reliable industry market research and analysis to help them make important business decisions. With over 100 studies published annually, we support over 90% of the industrial Fortune 500 companies. 

Read more »

California Prune Growers Look for Hope After a Challenging Year

By |

When the sun rose above the Sacramento and San Joaquin Valleys on New Year’s Day 2020, it was business as usual for California’s prune growers. Their plum trees had been tended to in the run up to winter in order to regulate tree shape and growth, and the first bloom of the year was just weeks away. By the time spring arrived however, the world was caught up in an unprecedented pandemic, the impact of which would be felt economically and socially across the globe.

For Californian agriculture, the combination of COVID-19 and the summer wildfires certainly made for an unusual and challenging year. Buoyed by a healthy, if relatively short, crop however, California Prune growers have found a sliver of hope in sales and are looking ahead to 2021 with optimism.

Donn Zea, Executive Director of the California Prune Board, which represents around 800 prune growers and packers, explains: “Agriculture, like other sectors, has been adversely impacted by the pandemic. The food service industry in particular has been devasted because of restrictions and lockdowns.

“However, with more people choosing to get creative in their own kitchens, consumers have been raiding their store cupboards and experimenting with ingredients they might not normally think to use, such as dried fruit. Consumers are also looking for natural foods with nutritional benefits, and that’s a trend we’ve seen reflected in our sales in Europe and the Far East in particular. We’re hopeful that it continues, especially given California Prunes contain vitamins and minerals that play a part in maintaining healthy immune systems.”

In response to the challenges posed by the both the fires and the pandemic, California Prune growers have adapted well. Donn adds: “Mother Nature waits for no one so, when the harvest came, California Prune growers and their teams worked against the backdrop of smoke, the intense heat of the summer sun and the COVID-19 workplace guidance necessary to keep everyone safe.”

California Prune grower John Taylor, of Taylor Brother Farms in Yuba City, CA, explains: “The pandemic has affected operations, but we felt it less in the orchards, where we were able to separate workers more easily. Our priority this year has been to keep our teams healthy and get through the harvest.”

His fellow Yuba City grower Nick Micheli, of Micheli Enterprises adds: “It was important we responded immediately with the correct procedures such as the implementation of sanitisers, gloves and masks to keep our people safe. Working in PPE in the heat was of course tricky but everyone pulled together under difficult circumstances.”

As challenging as 2020 has been, both growers agree it’s been a ‘vintage’ year for the prunes themselves, in terms of sizing, quality, consistent flavour and excellent sugar content. 

Donn adds: “We’re extremely proud of our California Prunes and the value they can add to the trade and the end consumer in terms of nutritional profile, premium taste and versatility – a process that begins right back in the orchards.”

With the arrival of 2021, the Board is well-placed to respond to the trend towards healthier eating, and its produce comes backed with decades of research into the benefits of eating prunes. For now, though, as the orchards lay dormant for another winter, California Prune growers are already looking ahead to the March bloom. After all, there’s nothing like a blossoming canopy of fragrant flowers to bring hope and optimism.

For more information on California Prunes, visit www.californiaprunes.net

ABOUT THE CALIFORNIA PRUNE BOARD 
Created in 1952, The California Prune Board aims to amplify the premium positioning and top-of-mind awareness of California Prunes through advertising, public relations, promotion, nutrition research, crop management and sustainability research, and issues management. The California Prune Board represents approximately 800 prune growers and 28 prune, juice, and ingredient handlers under the authority of the California Secretary of Food and Agriculture.

Read more »

Shipping Operations Expect U.S. Import Binge to Lose Steam

By |

U.S. surging imports are fueling record high freight costs and logjams at seaports, but transportation executives expect the rally to lose steam with a second wave of Covid-19 restrictions.

Reuters news agency reports container shipping companies got stung late last year and early this year when the pandemic halted trade around the world, and they question whether the U.S. import boom can be sustained.

“Let’s not get carried away,” Rolf Habben Jansen, chief executive of Germany’s Hapag Lloyd, was quoted as telling reporters. “This is just a spike that no one has foreseen in an unusual period. There will be a correction to that.”

U.S. consumer confidence ticked up in September, when retail sales accelerated. Still, consumers are eating through savings, layoffs are mounting and the country just set a record for new COVID-19 infections.

“Everything depends on the demand and how the second wave of COVID affects the world economy,” Aristides Pittas, CEO of shipping company Euroseas, said at a Capital Link virtual event.

In recent weeks, the cost of transporting goods from Asia to the United States – one of the world’s biggest retail markets – topped $4,500 per 40-foot container unit (FEU), the highest recorded level, data from S&P Global Platts Containers showed.

“We are sold out. The ships are 100 percent full. The containers are 100 percent full. You can’t get a container,” Jeremy Nixon, CEO of Japanese container group Ocean Network Express (ONE), said at a recent International Chamber of Shipping virtual event.

Read more »

Retail Potato Sales Remain Strong

By |

By Potatoes USA

Since public health restrictions for COVID-19 were put in place, potato sales at retail have been well above historical levels. This has continued throughout the summer, even as some of these restrictions have been relaxed. For the period from March 16 – September 6, 2020, sales of potatoes have been up every week, and the total value and volume are up 22 percent over the same period in 2019.

All categories, except prepared sides at the deli (many of which have been closed or refigured), have shown increases but the largest gains were for canned, dehydrated, and frozen potatoes. Fresh potatoes have also fared very well, with a 24 percent increase in volume and a 33 percent increase in value. Potato chips, the largest category at retail, has also performed well; up 8 percent in volume and 15 percent in value.

The greater increases in the dollar sales over volume reflects significant increases in the price per pound through the summer. The largest increases in price per pound were refrigerated and fresh potatoes, up 7.6 percent and 7 percent compared to the same timeframe in 2019.

Read more »

Keeping It Fresh: Beyond COVID-19

By |

By Nora Trueblood

We have been inundated with information, some mostly correct, some not, specific to COVID-19. I don’t know about you, but I am quite exhausted by it all. Every one of us is on a different journey because of the pandemic, and I personally continue to recognize that a person’s opinion is just that…their opinion. I do think it is safe to say, that we are all trying to manage and figure out our own journey through life as we deal with COVID-19.
Keeping it Fresh is distributed to many of our perishable/produce customers, and I wanted to take the opportunity in this issue to bring to your attention some of the great philanthropy that is taking place during this crazy time. Many of these growers/shippers work with the Allen Lund Company in everyday business, but many also donate food to Navidad en el Barrio, a project that has existed since 1972, and one that ALC has supported since 2004.
So, a hearty thank you from the Allen Lund Company and the recipients of these generous donations to:

We still have quite a road ahead, and we wish all of our industry friends the best as we maneuver through our current challenges.

****

Nora Trueblood is Director of Marketing and Communications, Allen Lund Company Corporate of La Canada, CA. She began her career with ALC in 2002 as Director of Marketing & Communications. Prior to joining the company, Trueblood worked as the event manager with the Montrose Arts Council and Alpine Dance in Montrose, CO, had her own production and event planning company and spent 7 years with Lorimar Television.

Read more »

Mushroom Shipments Rebounding after Pandemic-Related Shortages

By |

Mushroom shipments in the U.S. and Canadian are slowly starting to increase after growers curtailed planting in response to a huge drop in sales when COVID-19 hit in March.

South Mill Champs of Kennett Square, PA notes there have been extensive shortages of mushrooms because of the disruption of the foodservice market as a result of COVID-19. Shipments still remain significantly lower than a year ago, but meeting demand during what is typically the slowest time of the year for mushroom sales.

To-Jo Mushrooms of Avondale, PA., reports it had minimal supply interruptions, although there were challenges with fluctuations in demand. Since mid July more consistent shipments have been occurring.

Highline Mushrooms of Leamington, Ontario, reports it has maintained very strong and consistent demand from retail for mushrooms recently, making it difficult to maintain adequate supply for the demand.

Phillips Mushroom Farms of Kennett Square, PA notes when COVID-19 hit, it did not reduce growing or harvesting projections very much beyond normal seasonal changes, and demand has remained strong throughout COVID.

Ostrom Mushroom Farms of Olympia, WA., has reported frustrations because the company was in the process of moving production about 220 miles away to Sunnyside, WA., where an all-new workforce had to be trained under trying circumstances.

Read more »