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Demand for canned fruit remains ‘unprecedented’

Issue Date: December 9, 2020
By Christine Souza

With the arrival of winter and as COVID-19 cases rise, retailers are preparing for continued increased sales of healthy, shelf-stable items such as canned cling peaches and pears.

Catherine Brew-Cain at Del Monte Foods Inc. said the company continues to see strong demand for its products.

"Sales across all our categories are up significantly this season, including canned fruit," Brew-Cain said. "In a typical holiday season, we see a 70% sales spike. This year, we've already seen a 100% lift in sales."

Del Monte has worked to meet "unprecedented demand," she said, "by increasing our plant operations, expanding our pack season, expanding our grower and co-packer network, executing direct customer shipments from plants and increasing labeling capacity."

Rich Hudgins, president and chief executive officer of the California Canning Peach Association, said the initial rush of "pantry loading and borderline panic buying" early in the year that led to empty supermarket shelves eventually faded, but he added that canned fruits, canned vegetables and most center-store items continue to see increases in retail sales compared to last year.

"Between the increase in retail sales momentum and a smaller-than-anticipated 2020 crop delivery, we actually moved from struggling with an oversupply situation last spring to a much more balanced inventory position today," Hudgins said. "We're seeing some continued decline in food-service business, but that's been largely offset by increased retail sales."

For the canned-peach business, he said, "we think we're in a balanced position going into 2021, and hopeful that we'll see a (COVID-19) vaccine widely available in mid-2021."

The executive director of the California Pear Advisory Board, Chris Zanobini, said the 2020 crop was "the smallest pear crop we've ever had," at 90,000 tons. Of that amount, about 58,300 tons of Bartlett pears went to canneries, he said.

"It just was a really, really short crop," Zanobini said. "Lake and Mendocino counties were fairly consistent, but the Sacramento Delta was down significantly. Some of that had to do with pretty significant pruning in trying to manage the crop size, but nobody anticipated that it would be as small as it was."

Earlier in the year, when retail purchases spiked, the supply chain suffered temporarily, Hudgins said, noting that retailers typically don't keep an abundance of inventory on hand. Since then, he said retailers have built more anticipatory inventories, to avoid the situation from last April.

"A good year in the food business, over the last decade, has been low, single-digit-percentage growth year on year," Hudgins said. "The system was never designed to handle double-digit-percentage increases in retail sales over a very short period."

Fruit processors also took new steps to keep employees safe from COVID-19. Processors such as Pacific Coast Producers and Del Monte Foods reported they increased cleaning and sanitization routines and set up health-monitoring mechanisms at manufacturing facilities.

Steve Freeman, vice president of field operations for Pacific Coast Producers, said during his harvest summary this fall, "We were very fortunate that we got through the whole season without anybody from the field department having a single incidence of COVID."

Even though the year brought new challenges and hurdles, Freeman said, "We are proud to say overall, it was a successful year."

The 2020 cling peach crop reached 246,000 tons, Hudgins said. Yields were the lowest the sector has seen since 2006, at 15.4 tons an acre, compared to the 10-year average of more than 17 tons per acre.

Bearing acres for cling peaches totaled about 16,000 this year, he said, with more new plantings from 2017 expected to move into the bearing category in 2021. More acres of cling peaches will also be removed, Hudgins said, estimating bearing acres for 2021 will drop to about 15,340—meaning the projected 2021 crop could be about 251,550 tons.

"We're going to see a slow ratcheting down of our bearing acreage over the next several years," Hudgins said.

This year, canned fruit products that would have been sold to food service were shifted to schools and other U.S. feeding programs.

"USDA made a $25 million Bonus Buy purchase of canned peaches this summer that went to the food distribution network across the country that was dealing with unprecedented demand," Hudgins said. "Our products fit very well in distribution for feeding programs all across the country."

This season, many specialty-crop farmers took advantage of federal pandemic relief through the Coronavirus Food Assistance Program 2. Applications for the program end Dec. 11.

"The (CFAP 2) program has been a big help. I've encouraged all of the peach growers not to miss the opportunity for the benefits that the program provides," Hudgins said, adding that farmers incurred increased costs this year, including purchase of more personal protective equipment for employees.

Pear growers are also taking part in the CFAP 2 program "as an opportunity to help stabilize their profitability," Zanobini said. Although retail sales are doing well, he said there was a huge backlog of food-service product that wasn't consumed due to restaurant and other food-service closures.

(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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