Archive For The “News” Category
U.S. food expenditures generally followed several predictable trends over the past 25 years. But 2020 was an exception as people in the U.S. spent approximately $1.56 trillion on food, which was a 5.3 percent reduction from the $1.65 trillion spent in 2019, according to a USDA report.
The disruption of trends in food spending is attributed to the pandemic limiting mobility of U.S. consumers and the economic recession coming with it for most of 2020.
The drop from 2019 to 2020 was only the second time total food expenditures decreased over the last 25 years, with the other time in 2009 during the Great Recession.
The decrease in total food spending in 2020 was driven by an 18.3 percent drop in spending at restaurants and the like. Because of the additional cost of eating away from home, that decrease outweighed an 8.5 percent increase in food-at-home (FAH) spending as consumers shifted to buying more food from retailers.
In April of last year, U.S. consumers spent about two-thirds of their food dollars at FAH retailers, the highest value on record. FAH and food-away-from-home (FAFH) spending increased 7.9 percent and 36.2 percent, respectively, from April to May 2020.
This increase may be due in part to the stimulus checks and increased unemployment benefits that were provided with the enactment of the CARES Act at the end of March 2020. However, FAFH spending in May 2020 was still lover than the previous year, while FAH spending was higher.
The last quarter of 2020 saw monthly increases in FAH spending, an expected outcome of colder weather and holiday meal preparation, which resulted in record-high FAH spending in December.
FAFH spending decreased in November by 10 percent 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 economy remains unclear.
The USDA, Economic Research Service will continue to monitor the effects of the pandemic on food expenditures as more data become available and will examine possible long-lasting behavioral changes in the way people purchase food.
U.S. organic sales soared to new highs in 2020, jumping by a record 12.4 percent to $61.9 billion.
It marked the first time that total sales of organic food and non-food products have surpassed the $60 billion mark, and reflected a growth rate more than twice the 2019 pace of 5 percent, according to the 2021 Organic Industry Survey released Tuesday by the Organic Trade Association.
Black beans, flour, and chicken broth are not typically out of stock. They were in 2020. In that unprecedented year, organic’s reputation of being better for you and the planet positioned it for dramatic growth.
In almost every organic food aisle, demand jumped by near-record levels, propelling U.S. organic food sales in 2020 up a record 12.8 percent to a new high of $56.4 billion. In 2020, almost 6 percent of the food sold in the United States was certified organic.
The COVID-19 pandemic caused consumer dollars to shift almost overnight from restaurants and carry-out to groceries, with traditional staples and pantry and freezer items flying off the shelves. Consumer habits were upended, online grocery shopping and grocery deliveries exploded, and new products were tried as families ate three meals a day at home.
“The pandemic caused abrupt changes in all of our lives. We’ve been eating at home with our families, and often cooking three meals a day. Good, healthy food has never been more important, and consumers have increasingly sought out the Organic label. Organic purchases have skyrocketed as shoppers choose high-quality organic to feed and nourish their families,” said Laura Batcha, CEO and Executive Director of the Organic Trade Association. Batcha announces the new data Tuesday at Organic Day at Natural Products Expo West.
Stocking the pantry, refrigerator and freezer with organic
Leading the charge for healthy food was the desire for fresh produce. Fresh organic produce sales rose by nearly 11 percent in 2020 to sales of $18.2 million. Frozen and canned fruits and vegetables also jumped with frozen sales alone rising by more than 28 percent. Including frozen, canned and dried products, total sales of organic fruit and vegetables in 2020 were $20.4 billion. More than 15 percent of the fruits and vegetables sold in this country now are organic.
Pantry stocking was overwhelmingly the main growth driver in 2020. As bread making and cookie baking took kitchens across the country by storm, sales of organic flours and baked goods grew by 30 percent.
Consumers also turned to “meal support” products to help them in the kitchen. Sales of sauces and spices pushed the $2.4 billion condiments category to a growth rate of 31 percent, and organic spice sales jumped by 51 percent, more than triple the growth rate of 15 percent in 2019.
Meat, poultry & fish, the smallest of the organic categories at $1.7 billion, had the second-highest growth rate of nearly 25 percent.
Supply constraints
“The only thing that constrained growth in the organic food sector was supply,” said Angela Jagiello, Director of Education & Insights for the Organic Trade Association. “Across all the organic categories, growth was limited by supply, causing producers, distributors, retailers and brands to wonder where numbers would have peaked if supply could have been met!”
Jagiello, who spearheads the coordination of the survey for the association, also noted that because of the pandemic, not only ingredients were taxed, but packaging—bottle lids, pouches, corrugated cardboard, bottles for dietary supplements—was in short supply as were workers and drivers to transport product, making it hard for producers to ramp up processing to meet consumer demand.
Steady growth in non-food sector
The organic non-food category did not see the same exceptional growth in 2020 as organic food, but its growth held steady with prior years. Sales of organic non-food products reached $5.4 billion, up 8.5 percent and only slightly below the 9.2 percent reported in 2019.
Reflecting the pandemic and as in the conventional market, organic sales were driven by personal hygiene, hand sanitizers and cleaning products. Sales of organic household products saw record growth of 20 percent.
Textiles and fibers, the biggest category of the organic non-food sector, saw sales slow as stores closed, and clothes buying dipped. That said, the category fared better than expected given its ties to brick-and-mortar retail and the shutdown of that sales channel for a significant period of time. For the year, U.S. organic fiber (linens, clothing and other textiles) sales grew at a rate of 5 percent, compared to 12 percent in 2019, reaching sales of $2.1 billion.
What’s ahead in the “new normal”
While the growth in organic food sales is not expected to continue at 2020’s fast rate, organic food sales are expected to stay on a strong growth path in 2021. It’s anticipated that the grocery industry at large will get a lasting lift from the pandemic for the foreseeable future as many consumers continue to cook more at home.
“We’ve seen a great many changes during the pandemic, and some of them are here to stay,” said Batcha. “What’s come out of COVID is a renewed awareness of the importance of maintaining our health, and the important role of nutritious food. For more and more consumers, that means organic. We’ll be eating in restaurants again, but many of us will also be eating and cooking more at home. We’ll see more organic everywhere – in the stores and on our plates.”
This year’s survey was conducted early in 2021 from January through March 2021 and was produced on behalf of the Organic Trade Association by Nutrition Business Journal (NBJ). Nearly 200 companies completed a significant portion of the in-depth survey. Executive summaries of the survey are available to the media upon request. The full report can be purchased; online orders can be placed on this page.
“Rates keep going higher and higher, adding difficulty to the already complex produce industry.”
Intergrow Greenhouses, a farming company located in Upstate NY, focusing on the production and sale of greenhouse grown tomatoes, is thankful to have their own private trucking fleet to help service their customers. Stating the primary goal of their own fleet is to give the best possible service to top tier retail customers. Understanding the importance of “On-time, In-Full” is fresh, perishable produce they have taken transportation into their own hands!
“When you contract a load through an outside broker or carrier you lose some of the visibility and control required to really deliver the best service possible. That’s why we’ve invested in our own fleet and in a freight market like this it has really paid off having the ability to run our own loads.” Explains Dirk Biemans, President of Intergrow Greenhouses.
“Although we are close to major markets, there is a lot of freight needing to be moved in this area of the US and there is, and has been more demand than supply in the market. That’s why we are so grateful to be running some of our own trucks.” Says Bill Cook, a 30yr transportation veteran and current Logistics Manger at Intergrow Greenhouses. “During the peak season we have as many as 50+ loads a week shipping out of our facilities, of course our own band of guys can’t handle of that high volume, so they remain on our retail accounts, providing consist and reliable transportation for the business. “ Currently expanding their business with another 10acre greenhouse, Intergrow says they are first and foremost a grower and farmer but saw the need to deliver consistent quality service to their customers in order to grow their business. “Here at Intergrow we’re not only striving for the highest quality product but also reliability. Our customers need to have confidence we can deliver of premium product, reliably and consistently throughout the year.” says Kris Gibson, VP of Sales and Marketing “This last part of the puzzle, transportation, has really helped us grow these past years.”
As rates increase Intergrow has also seen their own fleet benefiting them in other ways… cost control. “Our own transportation costs have increased as well, but in a controlled in regimented manor.” Says Biemans. “We are not at the mercy of the market for some of our most important loads. “Rates keep going higher and higher making it adding difficulty to the already complex produce industry. No matter the freight market you are expected to deliver product under your contracted price.”
Intergrow is currently looking to hire additional drivers to their fleet and asks anyone interested to email Bill Cook at logistics@intergrowgreenhouses.com.
Per capita consumption of avocados in the U.S. avocado could rise from 9 pounds per capita in 2021 to 11 pounds in five years, according to a new avocado market analysis by Rabobank.
Authored by David Magana, senior analyst for fresh produce and tree nuts for Rabobank, the report signals good prospects for both short-term and long-term consumption gains.
For 2021, the report said healthy consumer demand for avocados is fueled by economic recovery, sustained retail sales and increasing foodservice activity.
Increased shipments from Peru and Mexico will offset a lighter California crop in 2021. However, avocado availability in the U.S. may be tight in some weeks later this summer when California’s and Peru’s seasons end and Mexico transitions to the new season.
Per capita avocado consumption, has jumped from 4 pounds in 2010, rising to 8.5 pounds in 2018. Following that trend of per capita gains of about 8% annually, per capita avocado consumption could exceed 11 pounds per year by 2026.
Consumer demand for avocados has been increasing, and one promising element of future demand is changing U.S. demographics, according to the report. Younger generations feature a greater proportion of Hispanic consumers.
About 25% of Gen Z consumers are Hispanic, compared with the 17% share among millennial consumers and 12% among Gen X consumers.
“Hispanic consumers in the U.S. tend to consume more avocados than the average U.S. consumer,” the report said.
Mexico’s per capita consumption, as a point of reference, is 18 pounds, which the report said “shows the headroom that remains” in less mature markets.
About 40% of U.S. households said they purchased avocados in the past 12 months, according to the report. That is lower than fruits such as blueberries, lemons, watermelon, grapes, oranges and strawberries and significantly lower than apples and bananas, which are purchased by about two-thirds of households.
Still-rising production prospects in Mexico, Peru and Colombia point to further increases in shipments to the U.S. and other markets.
Mexico will continue to be the main provider of avocados to the U.S. market, with shipments to the U.S. rising by single-digit percentages in 2021.
Acreage of avocados continues to rise in Mexico, with current acreage near 568,000 and about 50,000 acres of non-bearing groves yet to produce commercial fruit.
California’s avocado production has been flat to declining over the past two decades, but rising imports have allowed U.S. per capita consumption to gain.
Avocado production and exports from Chile have been flat to declining, reflecting tight water availability in some regions and growth in competing markets in Europe and Asia.
Peru has become an increasingly important supplier of avocados to the U.S. market. Avocado planted acreage in Peru is estimated at 106,000 acres in 2021, up from about 72,000 acres in 2016. Exports from Peru in 2021 are expected to reach a new record of 460,000 metric tons, a 26% increase compared with a year ago and almost 160% higher compared to 2016.
Avocado production and exports in Colombia will expand rapidly, the report said, with most shipments directed to European and Asian markets.
North Carolina produce shipments dipped slightly from 2019, U.S. Department of Agriculture statistics show.
Fresh produce shipments in the state totaled 1.09 billion pounds, down 2.3% from 1.11 billion pounds in 2019.
Here are shipment figures by commodity for 2020, compared with 2019 and 2010:
- Sweet potatoes: 532.6 million pounds in 2020, up 1% compared with 525.4 million pounds in 2019 and down 19% from 659.5 million in 2015.
- Seedless watermelon: 143 million pounds in 2020, down 21% compared with 181.5 million pounds in 2019 and down 6% from 152.4 million pounds in 2015.
- Cabbage: 21.3 million pounds in 2020, down 3% compared with 22 million pounds in 2019 and down 40% from 35.1 million pounds in 2015.
- Potatoes: 20.6 million pounds in 2020, up 41% compared with 14.6 million pounds in 2019 and down 2% from 21.1 million pounds in 2015.
- Blueberries: 18.1 million pounds in 2020, down 40% compared with 26.1 million pounds in 2019 and down 48% from 34.3 million pounds in 2015.
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Bell peppers: 16.5 million pounds in 2020, down 33% compared with 24.6 million pounds in 2019 and down 32% from 28.4 million pounds in 2015.
Greens: 11.7 million pounds in 2020, down 18% compared with 14.2 million pounds in 2019 and down 59% compared with 28.4 million pounds in 2015.
Apples: 10.8 million pounds in 2020, up 59% compared with 6.8 million pounds in 2019 and up 11% compared with 9.7 million pounds in 2015.
Cucumbers: 10.9 million pounds in 2020, down 5% compared with 11.2 million pounds in 2019 and down 40% compared with 18.1 million pounds in 2015.
Seeded watermelon: 6.7 million pounds in 2020, up 1.5% compared with 6.6 million pounds in 2019 and down 60% compared with 16.7 million pounds in 2015.
Tomatoes: 3.4 million pounds in 2020, down 18% compared with 4.7 million pounds in 2019 and down 32% from 5 million pounds in 2015.
Beans: 2.6 million pounds in 2020, down 44% compared with 4.6 million pounds in 2019 and 63% compared with 7.1 million pounds in 2015.
The market dynamics that have led to higher transportation costs were a long time coming and won’t quickly be solved.
Industry leaders discussed some strategies to deal with the problems during a recent United Fresh Reimagine webinar on the future of transportation.
“We project this is a multiyear problem, probably 48 months or longer,” said Todd Bernitt, Vice President – Managed Services for Robinson Fresh.
“The driver pool problem may take a decade or longer to play out,” he said about the driver shortage.
He said a normal load-to-truck ration should be 2.5 or 3 loads per truck. Now it’s about 8-1.
“We’ve seen peaks I’ve never seen before,” Bernitt said, citing 30-1 ratios from Florida this spring and 40-1 from Texas during the winter storms earlier this year.
“All of this is market based,” said Brian Kocher, President and CEO of Castellini Company LLC. “All of this fits together. Regional growing will change the strategy, as with urban, greenhouses and vertical farms. We’re building as much flexibility as we can and advise our partners to do that.”
One simple solution to improving driver retention is to treat drivers and transportation companies better, said Jeff Moore, Vice President of Sales for Tom Lange Company Inc.
“Treat carriers like your best supplier or your best customer,” Bernitt said.
Shipments of asparagus from Peru to PortMiami have continued to grow this year after last year’s record.
During the first three months of the year, the Florida port has processed a record number, over 14.1 million of pounds of asparagus.
“Miami-Dade County is a new gateway for asparagus from Peru to Florida, as well as for millions of consumers across the USA and Canada,” the port said in a release.
During 2020, PortMiami imported over 148.7 million pounds of
asparagus, shattering the previous year’s record of 112.9 pounds.
Over the years, the number of asparagus has increased exponentially, from just 26.2 million pounds in 2017.
So far this calendar year, PortMiami has imported 13 percent more than by the same time last year.
The significant increases in asparagus imports via ocean transportation to Miami demonstrate that importers consider PortMiami as their preferred gateway.
“The reason that Miami-Dade County attracts asparagus from Peru is due to the fact that we have an abundance of cold storage warehouses and some of the most experienced fumigation providers in the industry,” the press release said.
Peru contributes the largest share of asparagus that enters into PortMiami. The majority of asparagus varieties imported from Peru to PortMiami are Green Asparagus.
Demand for Imports from Peru have been substantial this year. A major factor for Peruvian growers is that the climate allows two full crops of asparagus a year, providing plenty of vegetables to Miami-Dade County.
According to Max Rodriguez, Director of Peru Trade Office, Miami. (PROMPERU), “Miami, despite the Covid19 crisis, asparagus exports continued to grow in 2020 and will continue to grow in 2021, consolidating Peru as the main supplier of asparagus in Florida and the second supplier in the United States.”
Recently Seaboard has added an express service between Peru and PortMiami that has helped create an exponential increase in asparagus imports, as the express route is only 9 days from Callao, 7 days from Paita and 6 days from Guayaquil.
Fresno, CA – Prima Wawona, the world’s leading grower and marketer of conventional and organic peaches, nectarines, plums, and apricots recently announced that it is expanding its acreage by another 2600 acres devoted to growing Stone Fruit. The new acreage increases the company’s total to almost 15,000 acres, equating to 1.0 million additional Stone Fruit trees, and further establishes Prima Wawona as the leading Stone Fruit grower in the world.
“As industry leaders, this investment represents an ongoing commitment to the growth and development of the Stone Fruit category and will help us achieve our long-term objectives. It will allow Prima Wawona to expand its ability to grow, harvest, pack and ship the healthiest, most delicious, highest quality Stone Fruit” said Eric Beringause, Chief Executive Officer of Prima Wawona.
“We look forward to building our partner relationships with valued retail and wholesale customers across North America and around the world by providing additional product for their shoppers who acknowledge and appreciate Prima brands as the best Stone Fruit available” said Kevin J. Kollock, Chief Commercial Officer. “Additional Stone Fruit will also provide selling opportunities with new customers who may not have experience with our superior products”. Kollock added that “our expansion will put Prima Wawona acreage at a total approaching double the peach acreage of all of Georgia, a state known for peaches”.
Prima Wawona has been involved in breeding & growing Stone Fruit for generations. The company is known for its unrivaled quality and consistency across multiple varieties. Prima Wawona is committed to quality control, unwavering attention to food safety, and ongoing research and development. The 2,600-acre expansion is on top of approximately 1,000 acres that are redeveloped and replanted with new trees every year as older plantings age out of production and further reflects the company’s commitment and investment in Stone Fruit.
“This expansion is an exciting opportunity for our team, customers, and ultimately consumers” said Mark Murai, Senior Vice President of Agricultural Operations. “We are the best in the industry in understanding what it takes to deliver the finest Stone Fruit available. That commitment to excellence includes our extensive proprietary breeding program and development of new, innovative varieties in both conventional and organic fruit that this additional acreage will provide”. Murai added that “as a company we are focused on sustainable farming practices and will be utilizing cutting-edge water management technology on all of our new & redevelopment acreage”.
For more information, please email the Prima Wawona Team at info@prima.com.
About Prima® Wawona:
Prima® Wawona is the largest producer of stone fruit in the U.S. Based in the heart of California’s central San Joaquin Valley.
By Matt Sarko,Transportation Broker, ALC Cleveland
Since the beginning of last year, the increase in the cost of freight has not only impacted the transportation industry but the economy as a whole. Transportation costs are now at an all-time high as drivers and trucks are currently in short supply.
Food prices rose 3.9% in 2020 and the U.S. Department of Agriculture anticipates another 2% to 3% increase for costs in 2021. The increase in transportation prices is primarily due to the shortage in drivers causing trucking companies to increase wages to attract more employees.
Additionally, the market is experiencing a shortage in semi-conductors, which is keeping new trucks from coming on the market and has since exacerbated the issue. The increase in transportation costs only adds to the supply chain problems for growers, suppliers, and retailers as they are still experiencing the effects of congested ports as well as the winter storm, which both continue to have widespread impacts across the U.S.
Furthermore, the rise in the price of fuel is also a major contributor to the inflated freight costs. As a result of these supply chain complications, retailers have begun raising prices on a number of different goods in order to offset the shortages and transportation costs. “The rise in transportation prices affects everything from the farmer and the tractor, to the fertilizer and even the plastic hamper you put the product in.”
With the supply chain in disorder, we will continue to see a rise in the price of consumer goods. Moreover, the cost of transportation will ultimately affect the prices of publicly traded companies such as Bed Bath & Beyond and General Mills, considering they have alerted investors about these problems on their earnings call.
For transportation brokers like ourselves, taking advantage of the spot market whenever possible might be the best way to combat the losses taken on contractual year round rates as freight prices continue to rise, and to also keep important products, produce, and perishables moving across the country.
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Matt began working fulltime for the Allen Lund Company in August of 2020 as a transportation broker for the Cleveland office. He originally started working his summer breaks during college as a broker’s assistant for the office. Matt joined the company with a degree in Finance from John Carroll University.
Mexico is now the world’s leading strawberry exporter in 2020, having over taken Spain.
The Mexico News Daily reported for over 20 years Spain was led the pack with $646 million in sales in 2020, while Mexico reached over $851 million, an increase of 12.4 percent from 2019.
The U.S. ranks third with $477 million.
Mexican strawberries’ main export destination was the U.S., as it imported 99.3 percent of Mexico’s shipments. Spain mainly exports within Europe.
Mexico overcame difficulties prompted by the current pandemic such as shortage of labor and the collapse of foodservice demand, to which 15 percent of the fruit is sold.
On the other hand, the pandemic contributed to the purchase of foods perceived as healthy, such as berries, according to the USDA.
The Mexican strawberry market surpassed the Belgian market in 2012, the Dutch in 2016, and the U.S. market in 2019.