Chilean clementine suppliers this year believe the product will hold its own against domestic and imported competitors, having carved a niche market and staple status.
The clementine deal is becoming increasingly crowded, with Peru, Chile and South Africa increasing their stake in the imported deal, but suppliers say there is still room for growth.
“It’s gotten to the point now where we are really truly consumers looking for citrus year-round,” said David Mixon, chief marketing officer for Seald Sweet, Vero Beach, Fla. “Is it an opportunity for promoting? Absolutely.”
Mixon insists that suppliers need to take advantage of every promotional program possible given strong competition from summer produce.
Ronald Bown, president of the Chilean Exporters Association in Santiago, provided 2009 statistics for citrus that put clementines in a close third place behind oranges and lemons. Oranges topped the list with 35% of the market, followed by lemons at 34% and clementines at 25%.
Manuel Jose Alcaino, president of Decofrut, Santiago, said clementines receive a warm reception in the U.S. market despite their arrival when there is a great deal of domestic fruit in the market.
“For the remainder of May, June, July, August and some of September — five months — it has no competitor, just South Africa,” he said of other clementines in the imported deal.
Alcaino said South African product has a better competitive advantage on the East Coast, but Chilean clementines have a great opportunity to grow in the West.
“There is a window for the Chilean market on the West Coast that is very attractive,” he said.
This year, Alcaino said Peru is leading the way in clementine volume increases, with a jump over 2009 of up to 25%; South Africa follows edging up by about 10%; and Chile’s increases are estimated to be around 5%.
This year’s deal presents additional challenges with overlap between source countries because of an expected late start from Chile and early start in South Africa.
“I think there is always an overlap between South Africa and Chile,” said Mark Greenberg, vice president of procurement for Fisher Capespan USA LLC, Gloucester City, N.J. “They are almost always selling clementines at the same time, which means there are more in the market.”
Greenberg reiterated that national distribution is largely split between South African clementines on the Eastern half of the U.S. and Chile on the West due to their respective shipping proximities.
James Milne, citrus category director for The Oppenheimer Group, Vancouver, British Columbia, downplayed the competition between Southern Hemisphere citrus exporters noting that each tries to avoid direct competition.
“Different variety timeframes and slightly different emphasis on each item can mean that direct competition is avoided for lengthy periods,” he said.
California summer fruit
Matt Gordon, Chilean program manager at DNE World Fruit Sales, said peaches, grapes and stone fruit get the lion’s share of promotional activity during the summer and clementine suppliers have to fight for ad space to ensure timely movement.
Joe Berberian, sales manager for Bee Sweet Citrus Inc., Fowler, Calif., said retailers will always have shelf space for citrus, and the only real competition is from California valencias.
Greenberg said he expects California to “inundate the market” with navel oranges well into June, providing a tough competitor in the citrus category.
Paul Marier, vice president of sales and marketing in the Montreal office of Fisher Capespan, said smaller clementine sizing this year may pose a problem for suppliers once competition with summer fruit heats up.
“If you are the only one bringing in smaller sizes, then you are going to be in trouble,” he said. “If the industry is all sizing small because of the nature of the crop, the chains will support it, sometimes reluctantly.”
Navel import spike
A change in import protocol for Chilean navels will likely lead to a rise in navel imports this year.
“Chile expects an important increase in navels to the U.S. There is a growth of 13%,” said Alcaino.
Alcaino said an agreement signed at the end of last year’s deal certifies orchards to allow importation of navel oranges without fumigation.
Gordon said South Africa also will be importing more navels, providing yet another scenario for the two countries to vie for market share.
“As usual, both countries will be strong competition for Chile on clementines,” he said. “South Africa is the strongest competitor with regards to navels on the East Coast. We expect South Africa to ship more navels to the U.S. than last season.”