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Californian Grape Growers Plan Increased Exports to China

September 07, 2017
Andrew

On August 30, Natalie Erlendson, Director of Marketing at Sun World International LLC, gave an online lecture to listeners of Produce Report, in which she discussed Californian grapes and their future in the Chinese market. Sun World has been growing, packing, and shipping table grapes since 1976.

Sun World and the Californian Grape Industry

Sun World currently grows and ships 8.5 million cartons (72,250 metric tons) of grapes each year from California and Mexico. This figure is expected to reach 12 million cartons (102,000 metric tons) by 2020 with the new plantings the company currently has in the ground. Overall, California produces approximately 110 million cartons of grapes each year, a value that has remained steady since 2014. In the 2016 season, 36% of these were exported and China was the third largest export market, receiving 2.8 million cartons. Californian grapes are generally shipped to China by sea, and quality is maintained by selecting specific varieties with good shelf life and shipping characteristics, alongside inspections in the field prior to harvesting to ensure the optimal quality characteristics for picking and safeguarding the cold chain throughout the shipping process.

The 2017 season has seen mixed results so far. At the beginning of the season, delays in the crops from both Coachella and Mexico, typically the first growing regions to bear fruit each year, left many growers unable to capitalize on the supply gap left by Chilean growers. The fruit coming out of California at the start of the season was also not as strong as in previous years, with low sugar and acid contents for many varieties. However, the late-season varieties have a much more promising outlook and are expected to reach the typical high standards. While the early heat may remain a problem for some growers, Sun World’s varieties seem to be holding up well. The Peruvian grape industry has also been adversely affected by heavy rains this year, which is expected to lead to a light and short market from November to December and potential opportunities for Californian growers to make up the deficit. Higher volumes of Sun World’s AUTUMNCRISP®, ADORA SEEDLESS®, and SCARLOTTA SEEDLESS® brand grapes are predicted, which should result in a better supply season and a superior product reaching China toward the end of the year.

Varieties, Innovation, and Licensing

Of the 87 varieties of grapes produced in California, the main ones currently exported to China are public varieties from the U.S. Department of Agriculture’s breeding program, including Scarlet Royal (472,000 cartons), Autumn Royal (462,000 cartons), Red Globes (349,000 cartons), and Autumn King (249,000 cartons). Over the coming years, Ms. Erlendson expects to see many growers replacing these with their stronger-performing proprietary varieties.

Sun World’s Innovations Division operates one of the world’s largest and longest-standing private variety development research centers for grapes and has released over 50 proprietary varieties to date. Among the most notable varieties are the early- to mid-season black seedless grape MIDNIGHT BEAUTY®, currently the largest variety shipped to the Chinese market, and the mid- to late-season grapes SABLE SEEDLESS® and SCARLOTTA SEEDLESS®, a black grape with a tropical and Muscat flavor and Sun World’s flagship red grape, respectively. The company has licensed over 32,000 acres of its varieties across the world’s major grape-growing regions, including Chile, Peru, South Africa, and Australia.

Although Sun World is highly vertically integrated in California and grows, packs, ships, and markets its own grapes, it partners with growers and marketers worldwide to grow and sell its varieties to other markets. Many of the licensees are also planning to increase their volumes substantially over the next four years, aiming to dispatch an additional two million cartons of Sun World grapes to China by 2021. According to Ms. Erlendson, this should ensure the presence of premium grapes on the retail shelf throughout the entire year.

Consumer Trends and Opportunities in China

Ms. Erlendson explained how Sun World pays close attention to global consumer trends and believes that several key trends in the Chinese market demonstrate that branded grapes have clear potential in China. One is the continuing demand of Chinese consumers for Western brands, as long as those brands can successfully engender a local connection with consumers. The company aims to achieve this by cooperating with its in-country partners who possess a firm understanding of the local market, and through consumer research to better understand the attitudes and behaviors of Chinese consumers. This has revealed the key attributes that Chinese consumers are seeking when it comes to grapes – a fresh and healthy snack with a sweet taste. Sun World has also received positive consumer feedback about its new packaging that will soon reach the marketplace.

To connect with consumers, Sun World’s strategy includes a variety of in-store and point-of-sale merchandising combined with a strong digital marketing presence, which has already proved successful in the U.S. and Australia and which the company aims to expand to China over the next year. In the words of Ms. Erlendson, “Our ultimate goal is to create a love for fresh and healthy Sun World grapes, grown with care, with the Chinese consumer, and to create and build consumer loyalty, demand, and trust, so that when consumers see the Sun World brand they know that they will get an excellent eating experience and a high-quality grape that they can trust and love.”

Asia Fruit Logistica

Sun World has tested its proprietary varieties in China and is assessing the opportunities for future licensing. Garth Swinburn, Sun World’s VP of Licensing, will be at Asia Fruit Logistica this week to participate in a panel discussion about variety development. Interested parties are invited to visit the company’s booth in Hall 3D, Booth V-17.

Image sources: Sun World International (main image, body image two), Pixabay (body image one)

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