July, 1991

Fruits of Thought

The Year Round Riddle

Today, in the heart of the summer, when many items reach their greatest availability, is a good, dispassionate time to think about the import of counter-seasonal produce and its effect on the trade. Most specifically, is year-round availability of product a good thing for the industry? This question is implicit in the examination of growers’ claims that they are hurt by the depressing effect of imports on prices during the beginning and end of the season.

The answer depends on what perspective one brings to the issue, and which arguments one buys. In terms of pure consumption, it is almost certainly true that year-round availability boosts tonnage sold and consumed. The human stomach can hold only so much at one time, and the opportunity to eat a product twelve months a year provides an easy way to boost consumption for any produce item.

But whether year-round availability produces higher returns for growers is hotly disputed in the industry.

On the one hand, some industry members, such as foreign producers of counter-seasonable produce, argue that year-round availability of product is a plus for the domestic grower. They point out three basic points: (a) year-round availability keeps consumers in the habit of eating a particular item, thus making it easier to sell; (b) year-round availability maintains vital shelf space at retail for the commodity, rather than provoking a seasonal fight to win back the shelf space given to other commodities during the off-season and (c) a variety of foodservice uses open up for product that is available on a year-round basis. Menu planners are often unable to include an item in a menu if reasonably priced, year-round availability is difficult to achieve.

Of course, it’s that “reasonably priced” point that is the stickler with those who argue that year-round availability is not, for growers at least, the unblemished blessing others portray. After all, what year-round availability often translates to is lack of product scarcity and sometimes, a lack of excitement among consumers and retailers.

Product prices often are highest at the beginning and end of deals. Whole industries, such as the Coachella Valley grape deal, were established to take advantage of high prices paid for the first product available. But year-round availability tends to reduce or eliminate the high-priced periods at the beginnings and ends of seasons. Indeed, today it often seems that as one growing area dies out, another is already producing, thus maintaining consistent supplies and a fairly stable pricing structure.

Perhaps the most intangible argument is the one about excitement. This argument points out that if year-round availability keeps people in the habit of eating an item, it may also make that item seem commonplace – even boring.

As exotic and gourmet items have boomed in the past decade, some wonder if it’s not, at least in part, because our old “exotics” – fresh grapes appearing suddenly, delicious peaches around just for a moment, strawberries here and gone – have now become staples.

This has retail implications as well. The first “anything” of the season is an exciting merchandising event for the retailer. A product that is always on the shelf can turn into a perpetual “tomorrow’s promotion.”

This, of course, needn’t happen. And perhaps, that is the answer. The advantages of year-round supply cannot be obtained other than by having product year-round. But the negatives often can be compensated for through intelligent marketing.

Price is, after all, a function not only of supply, but also of demand. This indicates that proper promotion needs to be used to keep demand high enough to give growers adequate returns. And excitement can be created for both consumers and retailers through marketing and promotion. In fact, though the seasonal availability of a product provides an easy promotion opportunity for everybody, year-round availability can, if properly marketed, produce dozens of promotional possibilities during the course of a year. Who would have thought, for example, that you could have a Presidents’ Day promotion for fresh grapes in February?

In many ways it is the year-round availability of product that makes brand marketing feasible. The investments made in advertising, marketing, promotion, etc., are more likely to pay off if they can be applied to a continuous year-round production program. And even if prices are lower at previous peak price periods, shippers who operate in many areas have the opportunity to sell greater volume, thus making up in volume what they may lose in margin.

But to take advantage of these possibilities requires a marketing program and a commitment to promotion, including a pledge to invest the sales time and marketing dollars necessary to ensure that retailers pay attention to the marketing possibilities for items available year round.

It also requires that growers and shippers have an expanded view of their role. If a business is defined as a grower/shipper of Coachella grapes, then that business is redefined as a grower/marketer of grapes and so capitalizes on opportunities to sell grapes from many regions and countries, the profits from doing this can well exceed the cost of lower prices in one season.

If growers and marketers bring this attitude to the produce industry, year-round availability of product can easily turn out to be a boon to both sales and profits.  pb