In little more than a decade, Peru has risen through the ranks to become one of the world’s top three table grape exporters and 2020/21 is shaping up to be yet another record year for the industry.
According to grower-exporter association Provid, there has been a 5-6 per cent increase in planted area this season compared with the 20,454ha registered in the 2019/20 campaign, in which exports reached a record 48.9m cartons.
Barring any unforeseen events, this means exports could top 50m cartons – an increase of almost 50 per cent in just three years – and based on this current growth trajectory, Peru will soon have an annual export volume of 70m cartons, putting it on a par with Chile and South Africa.
For the coming season, the biggest concern is whether market prices will be high enough to offset the increase in Covid-19-associated production costs. Labour costs, in particular, have surged due to the shortage created by workers returning to their home town, while the additional safety measures that companies have had to put in place to prevent the spread of the virus will also affect their bottom line.
Fortunately, early indications suggest demand will remain high as consumers continue to focus on health and nutrition as a means of warding off Covid-19. Average prices in the US are higher than at this stage last year, and with Californian stocks down on 2019 and 2018, the outlook is favourable.
Similarly, the European market is seeing increased demand and consumption and should remain buoyant, even in the event of further lockdowns due to a second wave of coronavirus, as grapes are less reliant on the foodservice channel than other fruits and vegetables.
Market diversification is another of Peru’s key strengths. The country currently sends grapes to more than 80 markets worldwide, with the US and Europe together absorbing around 70 per cent of shipments. But it will be Asia that drives volume and value growth in the coming years, according to Arturo Hoffman of Ica-based Agrícola Don Ricardo.
“Asia – and China in particular, is the only market where we can achieve large export growth, given the size of the population and the fact that we’re starting from a relatively low base,” he tells Fruitnet.
“However, it’s crucial that we understand the potential of each variety, since not all of them work and very few of them work well. If we can get this right, the opportunities in China and other regional markets like South Korea, Indonesia, Japan and Taiwan are huge.”
With more than 1,000ha of table grape production, Agrícola Don Ricardo is a prime example of the large, vertically-integrated and highly sophisticated operation that has allowed Peru to emerge as a major force in the Southern Hemisphere table grape deal over the past decade.
The company has also been at the forefront of Peru’s varietal renewal and today, 80 per cent of its table grape acreage is made up of new varieties.
“Planting decisions are based on productive trials and taken in conjunction with our customers around the world, meaning that not a single hectare has been planted without us knowing exactly how to grow it and who to sell it to,” says Hoffman. “Knowing what the end consumer wants is the only way to grow successfully.”
While Red Globe is still the most widely grown and exported variety in Peru, the country’s portfolio has improved markedly over the past three years. Today there is a much better balance of red and green seedless grapes and traditional and licensed varieties.
Analysis from Fresh Cargo Peru shows that Red Globe accounted for 50 per cent of the total export volume in 2017/18 but by 2019/20 this had fallen to 35 per cent. Over the same timeframe, white seedless varieties increased from 19 per cent to 28 per cent of overall exports, and red seedless from 23 per cent to 26 per cent. Sweet Globe and Crimson were the top two seedless varieties exported last season, followed by Sugraone, Sweet Celebration, Jack’s Salute, Timpson and Allison.
Along with improved varieties, a greater focus on quality and service are Peru’s best line of defence when it comes to maintaining the profitability of its grape offer. Better collaboration between other supply countries will also help to prevent market and price imbalances.
For Agrícola Don Ricardo, this means tailoring its offer to specific markets, and forging commercial alliances with producers from other origins with a similar ethos so that it can add value to its offer. The aim, says Hoffman, is to position itself as the “supplier of choice” for its customers.
The company is set to see a significant increase in production, not just in grapes but also citrus, blueberries and avocados, and to accommodate this growing output it plans to build two new processing plants equipped with the latest sorting and packing technology. It has also embarked on a digital transformation strategy spanning the entire operation, generating the management tools that will enable it to manage future growth in an well-organised and controlled way.
“The aim is to make the business as efficient as possible, ensuring that the products we provide are of optimal quality and condition,” Hoffman explains.
“We will continue to develop our programmes with our main customers and explore new market opportunities that allow us to grow our volumes organically. Our strategy is to expand in a calm and measured manner, generating solid and long-term relationships with our clients in new markets.”
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