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The fresh domestic garlic crop, produced almost entirely in California, is anticipated to be good this year. Depending on the region in the state, harvests will run throughout late June.

However, the garlic industry — growers, importers, wholesalers and distributors alike — always keep their eyes on the Chinese garlic crop. As the world’s largest garlic producer, China tends to control market prices.IMG 0268

“We believe that China’s crop is very large, with numbers reported to be record-breaking,” said Louis Hymel, director of purchasing and marketing for Spice World, based in Orlando, FL. “Some areas in China did experience some quality issues, however. Despite that, with the high volume produced there, the crop will still be very large.”

He added that like every year, there are many unknowns about the upcoming garlic crops around the world, or the effect they will have on pricing in the United States.

“U.S. duty rates, which are established by the U.S. Department of Commerce, are subject to change, and those rates affect prices,” noted Hymel.

Spice World is a leading producer of California garlic. In early June, Hymel said that the crop was looking nice and the company was gearing up to start harvesting.

“Without any unforeseen surprises from Mother Nature, it should be a good harvest with good yields,” he said.

The company grows in several regions in California, so it’s harvest periods differ. The majority of Spice World’s crop is harvested during the third and fourth week of June.

Hymel said that like just about any fresh harvested item, people like fresh garlic as compared to stored.

“But when garlic is properly cured, put into proper storage, maintained in perfect conditions and monitored — such as in our custom-built garlic cold storage rooms — it can be difficult for most consumers to tell the difference,” he explained.

Spice World’s Squeeze Garlic and Squeeze Ginger continue to increase in popularity and demand. The products, also offered in organic options, are now a common condiment in kitchens and foodservice operations across the nation.

“In addition to Squeeze Ginger, we are also now selling fresh ginger,” said Hymel.

Bill Christopher, president of Gilroy, CA-based Christopher Ranch, concurred about the Chinese garlic market this year.

“We’ve heard that it’s another big crop,” he said. “Growers there had a late rain, so some of the crop got a little wet. They are expected to ship fresh garlic with no problem but peeled will take a bit longer.”

He added that market prices for both peeled and fresh garlic are very low — possibly the lowest in a decade.

“A shipper was given a low duty rate in what we can only refer to as an unfortunate judgment call by the U.S. Department of Commerce, and they’re taking advantage of it,” explained Christopher. “The duty rate could hold for another approximate year-and-a-half, so it’s going to be a tough go for all domestic growers unless China has a late crop issue.”

Christopher Ranch is a leading California garlic producer, and Christopher agreed that this year’s crop is expected to be good.

“California-grown garlic is known for its superior and more intense flavor,” he said. “And it’s the safest garlic on the market. While there’s no disputing these claims, some people still shop for the cheapest garlic.”

Juan Pablo Lozano of Miami-based Garland Food also agreed with reports about the size of this year’s Chinese garlic crop.

“It’s a big crop, and it apparently is very good quality,” he said. “The large volume will make prices weak in the U.S. There is more than one shipper, with no or very low duties. This means that fresh garlic will be pretty cheap based on the huge volumes expected.”

He added that the market can expect to see low pricing because fresh Chinese market will be available everywhere.

In addition to typically being higher in price than Chinese garlic, Lozano said that California garlic is additionally burdened by freight costs to the eastern United States.

Mexico, he pointed out, is shipping nice quality peeled and fresh garlic at very low prices currently.

“Spain is also shipping strong, and there are many shippers in this deal,” he said. “With so many different origins, there will be a lot of non-Chinese product available, and this too will affect prices. There are too many players in the game and under the same umbrella. It’s going to be pretty competitive to acquire product.”

Maurice A. Auerbach Inc., based in Secaucus, NJ, is the largest garlic and specialty produce distributor in the Northeast. Paul Auerbach, company president, said the new crop and harvest in Mexico and Spain were beginning in early May.

“California will start soon, behind,” he said. “We handle garlic from all production areas, but with strong concentrations from California, Argentina, Mexico, Spain and China.”

Maurice A. Auerbach’s line includes all types of fresh, peeled and jarred garlic in every package type and size available. It ships its products under the AuerPak brand name.

“One common theme this year is there is less larger size garlic expected,” said Auerbach. “Spain had rains around harvest time, which has slowed them down a little and might hurt the yields. Because they are running a little behind, the full assessment is not yet in. Spain, however, remains very active in our marketplace.

“The overall market is lower this year than it has been in the past few years,” he added.

Most agree that every year in the garlic business is different, and it’s impossible to foresee exactly how the market will perform. A year with decent runs from all points of origin, with no or limited quality issues, is one for which most hold out hope.

Executives from The Kroger Co.’s produce department have reportedly indicated that there is some flexibility in the new company-wide 90-day payment policy that was announced earlier this week.krolog

The new policy, which, if accepted by produce suppliers, would invalidate the Trust provisions of the Perishable Agricultural Commodities Act, was relayed to its suppliers via letter earlier this week, stating that the policy would go into effect Aug. 1, 2018. Though the letter clearly stated that the new payment terms “are not considered optional to Kroger”, there apparently has been some easing of that position.

The letter to its “valued suppliers” was met quickly by protest from suppliers and their trade association representatives. United Fresh Produce Association President Tom Stenzel had a conversation with an executive at Kroger and reported to other association executives that there was some movement on the issue and that Kroger wanted to get that message out.

Stenzel confirmed that conversation with the following statement to The Produce News on Friday, June 22: “We understand verbally from Kroger’s produce team that there is flexibility for produce suppliers regarding the recent supplier letter announcing 90-day payment terms. They’ve encouraged produce suppliers to talk with their Kroger contacts about payment options, and offered to meet with suppliers at their business suite in the United Fresh show next week in Chicago. We appreciate that direct dialogue,” he wrote. “There’s still significant concern in the industry to see a more formal clarification of payment policies for produce, and we encourage Kroger to consider that option.”

Expressing that concern was Western Growers Senior Executive Vice President Matt McInerney, who had been briefed on Stenzel’s conversation. “We appreciate that Kroger has been responsive to the incredible outcry from the supplier community.” He said. “But if this is a preference and not a demand, we would like to see specific clarification in writing that the policy does not apply to produce.”

McInerney went on to say that while he understands the opportunity some larger shippers might have to sit down with Kroger and discuss payment options, “as far as we are concerned there are no options. This new payment policy requires shippers to abandon their PACA Trust rights. Our members don’t think that is an option.”

He added that clarification in writing would allow dissemination of the policy exemption to all grower-shippers, even small operators without direct access to Kroger.

Under the terms of the PACA Trust, a produce supplier is given priority status in the event of a bankruptcy, largely because of the perishable nature of fresh produce. However, to preserve those rights, the supplier basically cannot extend payment terms beyond 30 days.

One chief financial officer of a western vegetable shipping operation told The Produce News that if Kroger’s policy was adopted throughout the industry, it “effectively shatters PACA and forces a pretty material reengineering of everyone’s balance sheets.”

He said this is a major issue for any Kroger supplier and if other retailers followed suit “it would flip the entire industry on its head.” He explained that a supplier with $1 million per week in sales to Kroger, which he said is not an abnormally high figure, would see its Kroger balance sheet grow from $4 million to $12 million, as typical industry pay is a bit less than 30 days. “That supplier would have to go out and find another $8 million in working capital. They would either have to raise capital or get a new bank line.”

He added that while a bank might extend a line, they would probably do it a higher rate considering the 90-day payment term is an added risk. If every supplier had a similar policy, this CFO indicated that there would be many, many companies that simply couldn’t raise the additional capital as the industry’s margin lines are already very thin.

He also dismissed the Kroger option of offering quick payment at a discounted rate as extremely expensive. The retailer offered that through Citibank a $1 million invoice could be paid in 10 days at a discount of 0.72 percent. A supplier of that size would effectively be borrowing $1 million every 10 days at that interest rate. On an annual basis that represents a rate of about 25 percent…an interest rate that no CFO would consider.

He added that the new payment policy is, at its core, Kroger’s attempt to raise capital on the balance sheet of its suppliers.

The National Mango Board will host its annual Mango Mania Display Contest during the month of July. Retailers big and small have a chance to win big prizes. The NMB will also send a $15 digital gift card to each valid entry. Additionally, stores that include Tajín fruit seasoning will receive a second $15 digital gift card incentive.nmb

The Mango Mania Display Contest is designed to help stores boost mango sales, while showcasing their creativity in creating beautiful eye-catching displays and educating shoppers about mangos. Retailers are encouraged to use NMB’s POS materials included in their Mango Mania Kit available to order online. The display must be kept in place for at least one week between July 1 and July 31, and contest entries must be sent to the NMB by Aug. 6. Prizes will be awarded by the NMB in two store categories: one to six cash registers, and seven or more cash registers.

The contest will award more than $10,000 in prizes and incentives, including $1,000 for first place, $800 for second place, $600 for third place and $200 each for eight honorable mention winners. Every entry will receive a $15 digital gift card and retailers that include any Tajín product in their Mango Mania display will earn a second gift card incentive.

“The Mango Mania Display Contest is one of our favorite programs with the retail partners,” said Valda Coryat, director of marketing at the NMB. “Year over year we are wowed by the thoughtfulness and creativity of the displays, as well as the excitement and engagement from our partners. It is so much fun for us to see how each store uses different inspiration and originality to create a compelling display that is educational and eye-catching. We can’t wait to see this year’s entries.”

The NMB’s partnership with Tajín fruit seasoning will add to the chance for incentives for stores to enter and will increase the reach of the contest while offering retailers a great cross-merchandising opportunity. Mangos and Tajín are a perfect complement, the sweetness of the mango paired with the ‘zing’ of Tajín creates a new eating experience for many consumers. The partnership is expected to drive incremental sales of both items.

“This is our second year of Tajín partnering with the NMB on their Mango Mania Display Contest,” said Eric Patrick, North American alliance director at Tajín. “The results last year were fantastic, and we look forward to seeing the creative displays that retailers big and small build this year. Mangos and Tajín are a delicious combination, and these joint displays create a ton of interest in both products.”

ALDI, one of the fastest-growing retailers in the country, continues to dominate the competition when it comes to value. For the eighth consecutive year, the grocery retailer has been named the value leader by Market Force Information, which surveyed nearly 13,000 U.S. consumers.aldi

In addition to earning the top spot for value, ALDI moved up to No. 4 among America’s favorite grocery stores, as measured by customer satisfaction and loyalty. When surveyed, ALDI customers were among the most loyal and least likely to switch to a different grocery store. ALDI was also the only grocery retailer among the top five to increase its loyalty score year-over-year.

“The grocery industry is fiercely competitive,” said Jason Hart, chief executive officer of ALDI. “Maintaining the No. 1 position for value highlights our constant commitment to offer customers high-quality food at the low prices they deserve.”

In addition to securing the top value leader spot and a leading customer satisfaction and loyalty ranking, ALDI earned top scores in other survey categories, including checkout speed and cashier courtesy.

“We make grocery shopping smart, fast, easy and affordable. We’re thrilled shoppers are loyal to ALDI and chose us, again, as one of America’s Favorite Grocery Stores,” Hart said.

The Market Force Information U.S. Grocery Benchmark Study surveyed consumers online in April 2018 to gauge shoppers’ grocery habits, including satisfaction, preferences and brand awareness.

“The insights Market Force provides through our annual supermarket study serve as a meaningful performance measure in the marketplace,” said Brad Christian, chief customer officer for Market Force. “It is great to see our research affirm the value proposition of ALDI as the industry landscape has evolved over the last eight years. Consumer feedback consistently shows that ALDI leads the marketplace in value.”

ALDI is deep into expansion and remodeling plans that will bring its store total to 2,500 by the end of 2022, helping as many as 100 million people save money on groceries every month. ALDI also offers online grocery ordering via Instacart in the Atlanta, Chicago, Dallas and Los Angeles metropolitan areas.

With a combination of old world service and new world innovation, Catania Worldwide leads an international group of companies dedicated to maintaining the attitude and integrity of the original company founded in 1929 by Michael Leonard Catania.24

Mario Masellis, director of procurement for the Mississauga, ON-based company, noted that when it comes to summer citrus, Catania prides itself on being an importer, distributor and provider of value-add services, such as packaging and customized-bagging. The latter could be anything from a two-pound bag all the way up to an eight-pound bag.

“It all depends on what the customer wants,” he said. “It also depends on the label they want to put on it, if they have their own film or want us to develop film for them.”

With more than 80 years of experience behind it, the company knows what it takes to prosper in the industry. For Masellis, it all starts with having consistent quality, and not just bagging everything. He said that because shipping takes time, there are mechanisms in place to make sure that no bad fruit gets through.

“Being successful is not having the retailer see any of that,” he said. “We weed out all of the bad stuff, and make sure the taste is at its optimal experience. Only then will we ship it out.”

Labor disruptions are causing challenges for the company, but that’s an issue facing everyone in the industry today.

“A lot of people think we can get cheaper labor because of where we grow, but if you bag the fruit there, you can’t ship it out unless you relook at it and you would need to reopen the bag and it doesn’t make sense,” Masellis said. “Unfortunately, our labor costs here have gone up, especially in Ontario where our minimum wage has increased from $11.75 to $14 an hour. Also, we’ve heard the minimum wage will be installed in South Africa, so that will increase their costs as well.”

Transportation costs have also recently grown due to new regulations installed on truckers. But these are challenges that they are dealing with and the company is just happy things are running smooth with the upcoming season.

“Crops are looking pretty much the same as last year, growing methods haven’t really changed, and equipment hasn’t changed much, so we’re basically just moving along,” he said.

With summer citrus, there’s not a great deal of packaging options, as you can’t go into clamshells, so bagging remains the one way to dress up the product.

In early 2018, the company opened a new facility in Vineland, NJ, that will serve as a brand-new distribution center and storage facility. It will replicate its production line in Toronto and be able to bag, sort and distribute to customers on the Eastern Seaboard of the United States.

“We will be up and running with full certification in a couple of weeks,” Masellis said. “Another thing that’s exciting is we are going for full certification of our avocado production in Mexico and we should be fully food-safety-certified for avocados out of Mexico by August.”