north american fresh asparagus market...5 asparagus consumption in usa 0 0.2 0.4 0.6 0.8 1 1.2 1.4...
TRANSCRIPT
North American FreshAsparagus Market
1
North AmericanFresh Asparagus Market
Chris Martin, President and CEO of Gourmet Trading Company
Global Asparagus Production
2
Global Asparagus Imports
North American Fresh Asparagus Market
• History
• Today
• Future
Production Driven Growth
3
Asparagus Marketing, 1990
• Commodity based
• Direct communication with retail and food service buyers
• Little concern for end consumers
Asparagus 1990
30 Lb Wood Crate
15 Lb Wood Crate
4
1990 U.S. Market Supply
Sources: Mex/Peru-Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade Commission MI/CA/WA-USDA National Agricultural Statistics Service and USDA Commodity Reports
PE.4M2%
MX2.9M19%
WA2.5M16%CA
9.5M60%
MI.5
3%15.8M 11lb. units
86,900 tons
1990
1990 U.S. Weekly Supply
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000Michigan
California
Washington
Mexico
Peru
5
Asparagus Consumption in USA
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.619
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Fresh
Total.59 lbs per person per year
1.1 lbs per person per year
86.44% Growth
40% Growth
1 lbs per person per year
1.4 lbs per person per year
Retail Asparagus Ads, 2008
SOURCE: USDA MARKET NEWS
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Mother’s Day
Thanksgiving
4th of July
19%
1%
6.42%
Easter
Christmas
Presidents Day
Labor Day
6
Retailer Outlook
“In my mind it’s kind of like the lobster of the vegetable world. Well liked. Considered a bit upscale and expensive in the past, primarily consumed in restaurants……I don't think we've found the top yet, there's lots more to go.”-2008
Michael Agostini Senior Director, Produce and Floral
Food Service Outlook
“Asparagus has become an important part of ‘plate presentation’ in many restaurants and a sought after ‘side’ on many menus. It is a staple on most ‘white tablecloth’ and ‘steakhouse’ offerings.” -2008
Robert SorensonDirector, Strategic Sourcing
7
Asparagus Marketing, Present
• Building a brand, adding value
• Outreach to retail and food service buyers, as well as end users
• Cross promos, leveraging the CPG company’s budgets
• Use of press, bloggers, and social media for promotion of asparagus
• Leveraging the health benefits of asparagus
• Working with retailers on category management
• Pushing retailers to promote at peak times
• New packaging
• Locally grown promotions
Regional Purchases
8
Asparagus Quick Facts Fresh Trends 2010
Likelihood of Asparagus Purchase Based on:
9
Asparagus Price Elasticity Example:
The average retail for Asparagus over the last year has been $3.50/lb The peak season is January thru March.
On a seasonal basis, retailers promote off of this average. Research indicates the following incremental sales gains at different price reductions:
ASPARAGUS PRICING ELASTICITY8.1
4.0
1.5 1.3 1.2 1.2 0.9 0.9 0.7 0.6 0.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
$1.50 $1.99 $2.50 $2.91 $2.98 $3.51 $3.79 $3.91 $3.97 $4.82 $5.99
TOTAL # WEEKS LIFT VS AVG WEEK
Asparagus Seasonality – Typical Retailer
$4
.83
$4
.83
$2.7
4
$4.7
2
$6.6
7
$5
.62
$3
.99
$2.0
5 $2.4
9
$2.4
9
$1.9
9
$3.9
1
$2.5
0
$3
.73
$3.8
3
$3.0
1
$4.9
4
$5
.97
$5
.97
$5.9
6
$5.9
5
$5.8
7
$3.0
1
$3.8
4
$2.0
0
$3.4
9
$3
.77
$1.9
9
$3.5
3 $3.8
8
$1.5
0
$2.3
8
$2.9
4
$2.9
7
$2
.98
$2.5
0
$3.5
0 $3.8
5
$3
.90
$3
.95
$3.9
1
$2.9
9
$2.9
3
$2.9
4
$2.9
7
$2.9
6
$2.9
6
$2.9
7
$2.9
7
$3.9
8
$3.9
8
$3.9
8
$3.9
8
$3
.81
$3.7
2
$3
.86
$3.9
1
$3.9
3
$3.9
6
$2
.89
$3
.95
$2.8
8
$2.9
9
$1.9
9
$2.8
7
$2.9
6
$2.9
9
$1.9
9
010,0
00
20,0
00
30,0
00
40,0
00
50,0
00
60,0
00
70,0
00
$0.0
0$
1.0
0$2.0
0$3.0
0$4
.00
$5.0
0$6.0
0$7.0
0$8
.00
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10
Asparagus Packaging 2010Bunched, 2.5 kg, 5kg, and 28lb box
Asparagus Packaging 2010Bunched, 2.5 kg and 5kg box
11
Asparagus Packaging 2010Grilling Bunched, 5kg, and 28lb box
Asparagus Packaging 2010Club Store, 2.25lb bag and 1.75lb bunched
12
Asparagus Packaging 2010Food Service, trimmed and washed 2.5kg bagged
Asparagus Packaging 2010325gram value bunch, 220gram tip bunch
13
Asparagus Packaging 2010Bagged Microwaveable, 12oz Green, 8oz white
Asparagus Packaging 2010Purple Bunched, 2.5 kg and 5kg
14
2009 U.S. Market Supply
Sources: Mex/Peru-Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade Commission
CA/WA-USDA National Agricultural Statistics Service, USDA Commodity Reports and WAC Asparagus Document
MI- MI Asparagus Advisory Board
PE16.8M48%
MX12.3M35%
WA1.9M5%
CA3.3M10%
MI.6
2%34.9M 11lb. units
192,000 tons
2009
1990 vs 2009 U.S. Market Supply
Sources: Mex/Peru-Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade CommissionCA/WA-USDA National Agriculture Statistics Service, USDA Commodity Reports and WAC Asparagus Document, MI Asparagus Advisory Board
Net Change in Market Share 1990 2009 %Chg
Peru 2% 48% 46%
Mexico 19% 35% 16%
Washington 16% 5% -11%
California 60% 10% -50%
Michigan 3% 2% -1%
15
Other Production Areas
• 2008– Michigan
• 420,000 11lb units
– Canada• 953,000 11lb units
Source: Michigan Asparagus Advisory Board and CPMA
Michigan
• 199023,500 acres
*20% Fresh
*80% Processed
• 200911,200 acres
*27% Fresh
*73% Processed
STOCKTON
SALINAS
SAN JOAQUIN
Sources: 1990-USDA National Agricultural Statistics Service 1991 Veg. Annual 2009-MI Asparagus Advisory Board
Los Angeles
Lansing
Oceana County
State of Michigan
16
Factors in Michigan
• Cost of Labor - $7.40 minimum wage per hour• Average Yields – 4,000 lbs/acre• Major Crops
- Corn- Soybeans- Wheat
• Other major industries – Car Manufacturing, timber and fishing
Michigan Acres
23,500
11,200
-
5,000
10,000
15,000
20,000
25,000
30,000
52% Decrease
Sources: 1990-USDA National Agricultural Statistics Service 1991 Veg. Annual 2009-MI Asparagus Advisory Board
17
Michigan AcresFuture Predictions
Sources: 1990-USDA National Agricultural Statistics Service 1991 Veg. Annual 2009/2010-MI Asparagus Advisory Board
10,700 10,700 10,700 10,700 11,000
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
California
• 199029,000 acres
• 200914,680 acres
STOCKTON
SALINAS
SAN JOAQUIN
Sources: USDA National Agricultural Statistics Service and USDA Commodity Reports
Los Angeles
18
Factors in California
• Cost of Labor – minimum wage $8.00/hr• Water Shortages• Average Yields – 2,850 lbs/acre• Seasonal Crops
– Blueberries– Corn– Pistachio and Almond Crops
Yield Source – USDA Commodity Reports
California Acres
42% Decrease
29,000
14,680
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
49% Decrease
19
California AcresFuture Predictions
13,880 13,080
12,280 11,480 11,080
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2010 2011 2012 2013 2014
Washington• 1990
30,000 acres * 27.5% Fresh * 72.5% Processed
• 20096,500 acres* 95% Fresh * 5% Processed
Pasco
Sources: USDA National Agricultural Statistics Service and USDA Commodity Reports and WAC Statistics
Seattle
20
Factors in Washington
• Transition from Process Production to Fresh
• Cost of Labor – minimum wage $8.67/hr
• Average Yield – 3,750 lbs/acre
• Alternative Land Uses:– Corn, Cherries, Apples, Hay, Potatoes
Washington Acres
30,000
6500
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
78% Decrease
21
Washington Acres Future Predictions
Increase of 23%7,000
7,500 7,500 7,500
8,000
6,400
6,600
6,800
7,000
7,200
7,400
7,600
7,800
8,000
8,200
2010 2011 2012 2013 2014
Mexico
• 19907,677 acres
• 200928,767 acres
Caborca, SonoraNorth Mexico 77.7%
Baja Ca.5.4%
GuanajuatoCentral Mexico16.8%
Sources: Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade Commission
22
Factors in Mexico
H. Caborca, Sonora–78% of Mexico’s crop
• Water
• Yield-6,000 lbs/acres
• NAFTA
Factors in Mexico
Guanajuato-17% of Mexico’s crop• Alternative Land Uses-Corn, Berries and Seasonal crops• Yield-3,000 lbs/acres• Production Shift to Spring
Baja – 5% of Mexico’s production• Water• Soil Types• Hurricanes• Yield – 2,400 lbs/acres• Production Shift to Spring
23
Mexico Acres
7,677
28,767
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
375% Increase
Mexico AcresFuture Predictions
28,967 28,467 28,467 28,467 28,467
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2010 2011 2012 2013 2014
24
Peru• 1990
22,232 acresAir 100%
• 200966,341 acres
Air 71%, Ocean 29%• Total US Industry-34.16% of total
acres
• 2008- White 17%, Green 83%
• Fresh 66.37%, Canned 25.29%, Frozen 8.34%
*III Censo Nacional de Productores de Esparrago 2007
Trujillo
Lima
Ica
Factors in Peru
• Added cost of airfreight
• Option to divert from fresh to processing
• Fumigation/Irradiation
• Water (Ica Valley)
• Free Trade Agreement
25
Peru Acres
22,232
66,341
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
298% Increase
Peru AcresFuture Projections
Source - IPEH
65,353 61,276 60,040 58,805 58,558
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2010 2011 2012 2013 2014
26
Supply Comparison
Source: 2014 Estimated growth using historical data. 1990-2010-Mex/Peru-Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade Commission. CA/WA-USDA National Agriculture Statistics Service, USDA Commodity Reports and WAC Asparagus Document
PE.4M2%
MX2.9M19%
WA2.5M16%CA
9.5M60%
MI.5
3%
15.8M 11lb. units86,900 tons
1990
PE16.8M48%
MX12.3M35%
WA1.9M5%
CA3.3M10%
MI.6
2%
34.9M 11lb. units192,000 tons
2009
U.S. Supply
0
50
100
150
200
250
300
350
400
450Domestic ImportsMillion Pounds
Source: ERS USDA Vegetable and Melons Yearbook Data #89011
27
Supply TrendsPast and Present
Source: 2009-USDA Commodity Reports and National Agricultural Statistics Service. 1990-Mex/Peru-Dept of Commerce, Census Bureau, Foreign Trade Statistics and U.S. International Trade Commission. CA/WA-USDA National Agricultural Statistics Service
2009
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000MichiganCaliforniaWashingtonMexicoPeru
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000MichiganCaliforniaWashingtonMexicoPeru2009
1990
U.S. Industry Forecasted Units
Source: 2009 based on USDA Commodity Reports and IPEH Forecasts %
-11%
-14%
-3%
25%545,455 559,091 572,727 586,364 600,000
3,596,182 3,388,909 3,181,636 2,974,364 2,870,727
2,386,364 2,556,818 2,556,818 2,556,818 2,727,273
12,591,691 12,319,191 12,319,191 12,319,191 12,319,191
15,305,320 14,350,268 14,060,392 13,770,748 13,828,585
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
2010 2011 2012 2013 2014
Michigan California Washington Mexico Peru
28
2014 – A Projection
PE16.8M48%
MX12.3M35%
WA1.9M5%
CA3.3M10%
MI.6
2%
34.9M 11lb. units192,000 tons
2009PE
13.843%
MX12.338%
WA2.78%
CA2.99%
MI.6
2%
32.3M 11lb. units177,650 tons
2014
2014 – A Projection
Net Change in Market Share 2009 2014 %Chg
Peru 48% 43% -5%
Mexico 35% 38% 3%
Washington 5% 8% 3%
California 10% 9% -1%
Michigan 2% 2% 0%
29
Supply TrendsPresent and Future
Source: 2009-USDA Commodity Reports and National Agricultural Statistics Service, MI Asparagus Advisory Board. 2014-Forecasted hectares and avg .yields, Peru IPEH forecasts
2009
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
MichiganCaliforniaWashingtonMexicoPeru2009
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2014 Proj.MichiganCaliforniaWashingtonMexicoPeru
Asparagus Marketing, Future
• Special packs, less commodity based
• More category management and assistance
• More promotion to end consumer
• More emphasis on locally grown and sustainable
30
Asparagus Packaging 2014
TrimmedMicrowaveable
TipsMicrowaveable
Asparagus Packaging 2014
New Varieties: Purple
31
Competing Vegetable Consumption
0
2
4
6
8
10
12
14
16
Artichokes
Asparagus
Snap beans
Broccoli
Carrots
1.6 Lbs
1.1 Lbs
2.2 Lbs
6 Lbs
9 Lbs
Future
34,425,012
33,174,277
32,690,764
32,207,485 32,345,776
31,000,000
31,500,000
32,000,000
32,500,000
33,000,000
33,500,000
34,000,000
34,500,000
35,000,000
2010 2011 2012 2013 2014
DemandSupply
32
US Production Time Frame
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Apr
Apr
May
May
June
June
July
July
July
Aug
Aug
Sep
t
1415161718192021222324252627282930313233343536
MI
CA
WA
Mexico
Peru
Distribution Areas
California
Washington
Michigan
Mexico
New Jersey
Peru
33
US Based Marketing Opportunities
• Locally grown– 1 day’s truck ride
• Michigan
• NJ
• WA
• CA
• Sustainable, family farms
• Transition to Organic
Thank You.Questions?
Chris MartinGourmet Trading Company