South American Superstars

11/1/2012

From exotic fare to mainstream favorites, the array of produce from below the equator presents a deliciously profitable opportunity for supermarkets.

Shakira isn't the only South American sensation topping the charts.

Cherimoyas, feijoas, baby bananas, blueberries and grapes are just some of the fresh produce exports from countries like Chile and Argentina with a growing fan base in the United States.

South American exports, of which produce is a key commodity, are soaring, as the region builds on its reputation for high-quality agricultural products. According to a new study by Inter-American Development Bank (IDB) in Washington, D.C., Latin American exports grew 26 percent from 2010, for a total of $1.1 trillion in 2011.

IDB's annual report further found that exports by the Andean Community, which includes Bolivia, Colombia, Ecuador and Peru, led the region, increasing by 37 percent over 2010. The Mercosur trade bloc of Argentina, Brazil, Paraguay and Uruguay came in second, with a 28 percent rise in exports. Chile's export market grew 17 percent, and Venezuela's exports surged by 45 percent during the first three quarters of last year.

While the availability of South American produce at a time of year when much of our domestic production is under the blanket of winter is an obvious factor driving demand for south-of-the-equator fresh food, the region has also found success in catering to our burgeoning Hispanic market.

South America's familiarity with the cultivation of feijoas (pineapple guava), strawberry papayas and plantains perfectly positions the continent to supply the 52 million Hispanics currently in the United States — a population that the U.S. Census Bureau expects will triple by 2050 — with the flavors of home.

Beyond Bananas

Los Angeles-based Melissa's has been sourcing produce from South America since the company's inception nearly 30 years ago. As a specialty produce company, Melissa's has focused on more exotic offerings.

Take bananas, for example. "We don't bring in the Cavendish," says Robert Schueller, director of public relations. "We bring in all the other varieties, from cooking plantains to red bananas to Burro bananas to Manzano bananas to baby bananas." The majority of these come from Ecuador, Schueller notes, adding that while most are earmarked for Hispanic markets, that trend is beginning to change.

"Baby bananas have become very popular in mainstream markets because of their size," Schueller observes. "The category appeals to both kids and older adults, who would typically cut a medium-size banana in half and eat the rest later." He's also seen "dramatic growth" in plantains and red bananas, the latter of which can be shocking in color to some, but "definitely cater to the foodie market."

From Asian pears and quince to pomegranates and passion fruit, Melissa's has been importing more fruit from South America, notes Schueller, who cites greater availability as a big reason for the uptick. Countries like Chile are also capturing attention and market share with flavorful cross-hybrids such as plumcots, which he describes as 60 percent plum and 40 percent apricot.

Chile Exports Education

"Chile has become a food-producing and exporting powerhouse because of its privileged natural conditions for food production, entrepreneurial spirit, democratic stability, commitment to free trade, environmental sustainability, and sound economic management," reports ProChile, the Trade Commission of Chile. Indeed, the nation is the world's largest exporter of fresh grapes and plums, and the second-largest exporter of avocados.

Chile's export figures continue to show healthy growth. "It looks as though Chile will set another record for exports," says Tom Tjerandsen, managing director North America of the Chilean Fresh Fruit Association in Sonoma, Calif.

The end of the season showed that the total exports of fresh fruit from Chile rose from 2.46 million metric tons in 2009-10 to 2.63 million metric tons for 2010-11. There was a modest decline in shipments to North America, as more countries compete for a finite amount of fruit from Chile, Tjerandsen notes.

Grapes are the No. 1 fruit export from Chile, followed by apples, blueberries and avocados. In addition to this more mainstream fare, Chile exports some 75 species of fruit, from prickly pears to chestnuts to gooseberries.

To keep their fruit sales strong, "Chilean exporters are funding an aggressive two-pronged marketing effort," Tjerandsen reports. One is aimed at helping retailers encourage shoppers to put more fruit in their baskets, while the second is designed to increase the use of Chilean fruit in foodservice channels. The retail campaign involves a 25-second television spot that talks about Chilean fruit, followed by a message inviting consumers to shop for the fruit at a particular supermarket, such as Stop and Shop.

Chilean fruit is also going after America's student population with a campaign that Tjerandsen says has "taken off like wildfire." The campaign has the Chilean Fresh Fruit Association working with college and university campuses around the country to host events like a weeklong "Blueberry Mania," which challenges the schools to incorporate Chilean blueberries in their menus. The association provides recipes and menu suggestions, and the schools' chefs develop the concept from there.

Blueberry Mania T-shirt giveaways and contests boosted student participation in the campaign, which just marked its inaugural year. "It's a tactic that has hit a very responsive chord," Tjerandsen says. "With 10,000 colleges and universities, we'll be doing this campaign for a while."

Tropical Merchandising

Los Alamitos, Calif.-based Frieda's Inc. is another specialty produce company finding success with South American-grown offerings. "We import all kinds of tropical fruits from South America, like cherimoyas from Chile, pepinos and purple pepinos from Ecuador, Cape Gooseberries from Colombia, and various specialty pears from Argentina," explains Karen Caplan, Frieda's president and CEO. "We also bring in the very rare Coquitos (baby coconuts) from Chile, which are grown on 50-year-old Chilean palm trees."

Caplan cites changes in USDA import restrictions as the reason behind the increase in the number of products available from South America. This, coupled with a more sophisticated consumer base, has helped the category make tremendous sales strides.

"There has been increasing demand [for South American produce] as consumers hear and read more about tropical fruits on the Food Network, food blogs, websites and in cookbooks," Caplan notes.

How can supermarkets make the most of this momentum in South American produce? "Create a 'Tropical Destination' near the pineapples or bananas," Caplan suggests. "Make sure all the fruit is labeled, and offer consumers a website they can go to for more information, recipes, etc." Frieda's website has an entire section devoted to Latin produce, which offers detailed product descriptions, quick usage ideas, health facts, and selection and storage tips.

Caplan also recommends sampling overripe tropical fruit whenever possible, rather than disposing of it. "This creates an all-around win for the store, the produce manager and the consumer."

"Baby bananas have become very popular in mainstream markets because of their size. The category appeals to both kids and older adults, who would typically cut a medium-size banana in half and eat the rest later."

—Robert Schueller, Melissa's

"There has been increasing demand [for South American produce] as consumers hear and read more about tropical fruits on the Food Network, food blogs, websites and in cookbooks."

—Karen Caplan, Frieda's Inc.

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