Follow us on: Facebook Twitter YouTube

Food market faces new holiday demands

Issue Date: November 25, 2020
By Ching Lee
The Trinchero Family Estates wine-bottling facility in Lodi runs more than three dozen brands of wine. Despite the pandemic and downsizing of holiday gatherings this year, Tom Fantham, the company’s chief commercial officer, says he expects wine sales “to be vibrant” for the remainder of the fall and winter.
Photo/Ching Lee
At the Trinchero Family Estates warehouse in Lodi, the company typically increases its wine inventory before the last quarter of the year in anticipation of the holiday season.
Photo/Ching Lee

The pandemic may have put a damper on big holiday gatherings, office parties and other social events, but farmers and food marketers say they still expect people to eat—and have worked to keep up with shifts in demand.

With the recent surge in new COVID-19 cases, most California counties have implemented the state's most restrictive safety measures. Health and government officials have urged people to avoid nonessential travel and to keep get-togethers small this holiday season.

How these developments impact holiday food purchases remains unclear, said Bill Schiek, a dairy economist and executive director of the Dairy Institute of California.

"The bottom line is we just don't know how folks are going to respond for certain this holiday season," he said.

Regardless of whether or not people will scale back gatherings, Schiek said he expects they will still want to make and eat their traditional holiday fare. They may not cook huge quantities, he said, but there might be more people cooking at home this season, which will affect demand for dairy products.

"We're still going to have food. We're still going to do the dishes that we normally do," Schiek said. "We just may have more leftovers and we may be freezing stuff."

Demand for big turkeys is down 5% this year, while demand for bone-in and boneless turkey breasts is up 5%, said Bill Mattos, president of the California Poultry Federation. This could be an indication people are "trying to get a little less meat," maybe because they're having smaller groups to feed, he said. Turkeys weighing 12 to 18 pounds have been the most popular size, and Mattos said he does not expect that will change this year, as people often buy Thanksgiving turkeys anticipating leftovers.

Though the pandemic has put "a little interesting spin" on the holiday marketing season, Mattos said he doesn't think people will change their shopping habits too much, "because we're still going to see gatherings, maybe not big, but people are still going to probably want whole-body turkeys."

"I think we're going to see brisk sales for the California bird no matter what, just because they always go first and we only can supply 35% of the consumption in California," he said. "We don't believe we will have a surplus of turkeys from California this year."

Thanksgiving may boost demand for turkeys, but the business has been on a downward trend, Sacramento County turkey farmer Ken Mitchell said. After two years of reductions, he said, "the forecast is we're going to cut back," noting he's producing 19% fewer birds this year.

With his region being such a tourist destination during the holidays, San Diego County egg producer Frank Hilliker said pandemic-related restrictions have pummeled his restaurant clients, who do "a ton of business this time of year." Food service accounts for about 65% of his egg sales, which are down more than 50%, he noted. Though his retail sales have climbed about 10%, he said, he's trying to reduce cost and lower production by delaying replacement birds and buying fewer eggs from other farmers.

As in past years, Hilliker said he expects in-home egg consumption will rise as people eat more hot breakfasts when temperatures drop and holiday baking takes off.

As a maker of sparkling wine, Eric Donaldson said his business in San Joaquin County was "gaining so much momentum" before the pandemic lockdowns, with his busiest months in January and February, until he was forced to close his tasting room. More recently, he began holding outdoor tastings and flights by reservation, he said, but "we're not getting tourism."

Donaldson also makes custom sparkling wine for other wineries, and he said that side of the business has not changed—though he expects production will drop next year, as his clients' tasting rooms are slow to move product and there's less need to process new wine. At the same time, his wholesale business to a local grocery store has increased, he said.

As a business owner, Donaldson said he's been "reactionary, because it's so unpredictable what's going to happen." In the meantime, he said he's working on equipment to make it run better so when he can reopen his tasting room, "I'll be in a good position to handle it."

Sales of wine and spirits typically rise during the last quarter of the year, said Tom Fantham, chief commercial officer for Napa County-based Trinchero Family Estates, and with the growth of in-home consumption this year, he said he doesn't anticipate people will downsize their purchases this holiday season. People will still celebrate, he added, albeit in smaller gatherings or in their "bubble groups," and they will continue to buy wine and spirits.

Recent trends in wine consumption appear to relate more to the pandemic and "our new normal rather than holiday shopping behavior," Fantham noted.

More people are trading up in size, with the 1.5-liter bottle seeing strong growth, said Kent Mann, Trinchero's vice president of operations. Others are trading up in price, Fantham said.

"These are likely people that used to go out and spend money regularly in restaurants and are now spending more on wines they're enjoying at home," Fantham added.

With the state's almond crop expected to top 3 billion pounds this year, Mike Briano, vice president of sales and marketing for Harris Woolf Almonds in Ballico, said almond prices have stayed at low-enough levels to allow buyers to continue using the nut in their products and to innovate with it. For this reason, almond marketers have seen "record months," he said, adding he remains "bullish on the future of almonds and nuts in general."

"The fear is everything is kind of in a standstill, but we haven't seen that," Briano said.

There have been some shifts in how and what people are buying. For example, some buyers who used to make larger purchases now buy only what they need so they don't sit on product for which there might not be demand after the holidays, said Kevin Souza, Harris Woolf sales and marketing manager. More retailers are seeking larger-volume items as shoppers stock up, and that could drive demand during the next few months, especially if there's a new wave of infections and people are shut up at home, Briano said.

"I think that's probably one of the bigger reasons why people are grabbing so much supply and shipping numbers are up," he added.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at [email protected].)

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




Special Reports

Features

Series

Special Issues

Special Sections