Industry needs aggressive retail promotions to move large spring melon crop
Coming off a short watermelon crop out of southern Mexico during the winter months with extremely high prices, a sudden increase in volume as the northern Mexico production has gotten under way has led to a sharp drop in prices, according to John Gee, vice president of sales for Eagle Eye Produce, who is currently president of the National Watermelon Association and also sits on the National Watermelon Promotion Board.
“Basically, at this point in time, there has been a little too much volume for the demand that is out there, because of how high the retails were [before the volume hit] coupled with what’s going on with the coronavirus situation,” Gee told The Produce News March 31.
Speaking “with my industry hat on,” Gee said, “what we need to do in the watermelon industry [is] together as an industry we need to give out promotions at aggressive pricing in order to keep the movement up.”
Bad weather issues in southern Mexico in recent months “basically decimated a good portion of the crop,” leading to “a really high, expensive market situation,” he said, noting that market prices have been in the range of more than 40 cents a pound for the last two to three months. As a consequence, “in the stores, up until a week ago, most of the retails were very, very high,” mainly in the range of $7.99 to $9.99 per melon. As people “started doing their frenzy buying,” high-priced watermelons were not at the top of their list.
Now with volume starting to come into the market from areas such as Guaymas and Tampico, “basically we have seen our market price get cut in half,” dropping to unsustainable levels, he said.
“Watermelons are a great item that are healthy and that have shelf life,” Gee said. “They provide multiple servings per watermelon. It is obviously something that tastes good and is very nutritious. So, I am hoping as we move forward that it is something that people incorporate into their list of things they are trying to purchase as they shelter in place.”
But to make that happen, he said, the industry needs “to get out in front of it and get things moving. Create a demand for it.”
With the peak watermelon selling season approaching, there will be “good supplies all the way through” for Easter, Memorial Day, the Fourth of July, and beyond.
“We want to make sure the retailers don’t forget about the watermelon category as we move into our biggest watermelon selling time of the year,” he said. “It is important that we don’t let them forget us and we get them out there at promotable prices and make sure we stress the nutrition value.”