Canned fruit marketers see ‘unprecedented’ retail sales

Issue Date: April 8, 2020
By Christine Souza
Processors say they have adjusted operatons in response to increased demand for canned peaches and pears.
Photo/Steve Adler

Amid COVID-19 concerns, people looking for a long-term supply of healthy foods are purchasing more shelf-stable items—and that has boosted sales of canned peaches and pears.

"The retail sales movement that we've seen over the past four weeks has been unprecedented. I think part of it is emotional that you kind of overreact and say, 'Let's get as much stuff as I can hold and have a supply of food for the coming days,'" said Rich Hudgins, president and chief executive officer of the California Canning Peach Association.

The executive director of the California Pear Advisory Board, Chris Zanobini, said the pandemic has reminded people that canned or processed fruit "can stay on your shelf for a long period of time and gives people reassurance that they can have something that is not only healthy, but is also not going to go bad."

Hudgins said the rising demand has led to occasionally empty shelves in the canned-fruit sections of supermarkets.

"Over many years, retailers have shifted to keeping just the bare minimum in the back of the store and relying on regular replenishments from central warehouses," he said, "but when you have triple the normal sales volume occurring within a week and you have reordering driven by algorithms that look at what you sold the prior week to place the order for the coming week, it just can't respond fast enough."

Processors of canned fruit such as Pacific Coast Producers and Del Monte Foods report they have been making changes in their operations to replenish depleted store shelves and ship products quickly to supply retail customers.

In an announcement, PCP said during the previous three weeks "we have seen unprecedented demand for our products for this time of year," adding that the demand represented four to five times the company's typical shipping volume. The company warned it was unavoidable that its retail customers would experience unplanned shortages, adding, "we are doing our best to maintain supply chains and fulfill orders."

PCP also said it had authorized overtime for employees so that orders could be processed the same day they are received.

In its statement, Del Monte Foods said it was taking preventive measures to continue operating manufacturing plants and distribution centers, and accelerating product deployment.

In addition, both companies announced donations of products to hunger relief organizations, with Del Monte donating to Feeding America and PCP to the California Association of Food Banks.

As retail demand for processed fruit products continues, Hudgins said, the food-service sector is seeing a decrease in sales as restaurants close or reduce hours. As this happens, Hudgins said, processed fruit is being shifted into schools and other feeding programs.

"You've got schools reconfiguring school lunches into more of a 'grab and go' setup, so schools would need fewer cans and more fruit cups that you can pop in as part of a grab-and-go meal," he said. "It is also anticipated that some of the decrease in commercial food-service sales channels will be partially offset by increased volumes moving into food-bank channels all across the nation."

Zanobini called the response by the public to purchase more shelf-stable items as they shelter in place "an opportunity for people to realize the importance of products like canned peaches and canned pears," but added he believes the surge in demand could be just temporary.

In recent years, demand for California canned peaches and pears has leveled off, due to imports and other impacts.

For pears, Zanobini said, farmers have seen a large decline in the proportion of the crop that goes to processing. At one point, he said, "We were processing over 240,000 tons of pears and last year we were down to 65,000 tons."

"The change in market dynamics—the desire to have things that are self-stable—has really been a very positive boost in the last month for the canned fruit category," he said. "I hope this current scenario provides some stability and, hopefully, pricing back to the growers reflects this increase in desire for a canned fruit."

Hudgins said he expects processors will have enough canned fruit inventory going into the 2020 crop year but predicted "they'll be running on fumes by the time we get to new pack." A limited supply, he said, provides a better backdrop for pricing discussions, but he said he plans to move very cautiously.

"Not only are there uncertainties with regard to the marketplace, there are uncertainties around the cost and availability of labor," Hudgins said.

In a few weeks, cling peach growers expect to have employees in the orchards thinning trees and, this summer, hand-harvesting fruit.

Peach grower Kulwant Johl of Yuba City said, "I am worried because peach thinning should start in about three weeks, so will we have enough people, and will we have enough people during harvesttime? Not everybody can thin or pick peaches; people who are unemployed just aren't going to do that."

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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