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New trends in vegetables overshadowed by impact of drought on global trade.

New Trends in Vegetables Overshadowed By Impact of Drought on Global Trade Tight U.S. supply situation will keep prices high as packers deplete inventories to fill export orders. While out-of-stocks loom in North America, surplus in Europe and competition from fresh sector is softening prices.

A lot is happening in the world of frozen vegetables, but people can be forgiven if they don't notice: not when supplies are short because of drought, and could get shorter.

Sure, single-serve packs are getting more attention in the United States, and value-added products are making greater strides in Europe. But in Japan, a lot of buyers would be glad just to know where the next shipment is coming from.

Last year's drought, which hit the U.S. Middle West especially hard, also affected packers in the Northwest. Hit by unanticipated domestic demand as well as the traditional needs of their own region and the export trade, their stocks were rapidly depleted.

What Herbert Wiltsek of DenBere International, San Francisco, Calif., calls "program buyers" --Japanese importers with long-term contracts with U.S. packers--have been taken care of, although sometimes on a pro-rata share based on supply. But the spot market has virtually dried up.

Japanese spot buyers have been scouring Mexico for spinach, broccoli and cauliflower, Wiltsek told Quick Frozen Foods International, and gone as far as Europe for peas--New Zealand, the most obvious source, has been plagued by a drought of its own. About 70% of the Japan trade is usually on a programmed basis, he said, vs. 30% spot.

"One programmed buyer wanted 50 containers of mixed vegetables, but only got 25," Wiltsek recalled as an example of some packers being forced into allocations. "We put the Japanese on a pro-rata basis a long time ago," confirmed Gordon H. Smith of Smith's Frozen Foods, Weston, Ore. "But that was only on peas--everything else, we've been able to supply 100%."

But what about next year? Thanks to abundant snows in Oregion, the outlook for the 1989 pack there looks good. However in California, the Department of Water Resources has announced it will reduce deliveries to farmers by as much as 60% this year. The Federal Bureau of Reclamation has similarly imposed a 50% cut in other parts of California. And in the Midwest, the weather outlook is at least iffy.

The talk of the Western Frozen Food Convention in February was that many processors would be out of stock before the new pack year even got under way. Frozen pea inventories as of Feb. 1 were down to 132.7 million pounds, compared to 213.9 million a year earlier. Cut corn stocks were off from 232.1 million to 177.3 million, cob corn from 270.4 million to 196.8 million, and green beans from 160 million to 119.7 million.

Oddly enough. U.S. troubles with meeting export and domestic demand for peas, corn and green beans coincided with a decline in domestic imports of broccoli and cauliflower. California growers have complained about such imports for a long time; last year, they were off nine percent in broccoli, from 194.8 million pounds to 178.2 million; and 14% in cauliflower, from 58.5 million to 50.3 million. Mexico's shipments dipped from 164.4 million to 153.1 million, and from 55.9 million to 47.9 million pounds, respectively.

William Rembold, vice president of sales for Patterson Frozen Foods, Inc., Patterson, Calif., said Hurricane Gilbert was responsible for most of the drop in Mexican imports, having ruined some fields there. A diamond-back moth infestation also affected some fields, but new areas brought under cultivation more than offset that. In any case, he said, the flood of imports is expected to return this year. Rembold, meanwhile, doesn't expect the water shortage to affect early California crops of peas, spinach and broccoli, but it may impact on second crops of lima beans and green beans, he said.

One interesting contradiction in the domestic market is that sales of branded single-serve vegetables are on the increase, despite problems with high prices, whereas large economy sizes of private label vegetables are where the action is--in some regions, at least. Birds Eye has come out with 5.5-ounce microwaveable vegetable combinations such as pasta alfredo with broccoli, in the wake of last year's debut of the Stokely's Singles line. Birds Eye's line is selling in New York City, where there are a lot of singles. But Western Family Foods, Tigard, Ore., reports phenomenal sales growth in 40-ounce private label commodity vegetables (corns, peas, beans, mixed)--without any drop in volume for 20-ounce polybags.

All the growth in blanched vegetables seems to be in broccoli, reported Preston C. Williams, president of Southern Frozen Foods and chairman of the American Frozen Food Institute. More people are microwaving vegetables, he said, but they seem to be emptying conventional packages into microwave cookware rather than using microwave boxes--polybags still predominate, and family sizes have the edge over single serve.

As for Southern vegetables: "All the growth in the last few years has been in Texas and offshore." Fresh competition? "We have a shot at selling Mrs. Housewife something for two meals a day. Any time she buys any other product, we miss a sale."

But being a regional specialist has its advantages: despite the lack of normal rainfall, prices haven't increased much on Southern vegetables, because the South was least affected by the drought.

Bountiful Europe

Unlike the United States, Europe had a good year. "The fruitful and good summer of 1988 has caused a considerable increase in the degree of self-sufficiency as far as vegetables are concerned," commented Nills Logl of FDB Svendborg Fabrikker, Svendborg, Denmark. But that bright cloud has its dark lining: "demand has been stagnant and sometimes decreasing, which has had a clear effect on the retail price level." Competition from fresh vegetables was stronger than usual; this year, he forecasts, pea prices may go up 2-3% (By contrast, Colin A. MacDonald, sales manager for Norpac Food Sales, Lake Oswego, Ore., expects U.S. prices to go up 10-25%).

K.A. Dilworth, brand manager of Findus, Croydon, Surrey, U.K., characterizes the fresh competition as "still seasonal," adding that fresh vegetables are "therefore sometimes very expensive." As for upscale chilled vegetables, they're too expensive; canned vegetables are "too downmarket"--and everyone's scared of irradiated products. Specialty imports and prepared vegetables are the fastest-growing frozen vegetable categories, and cartons are increasing in popularity for those products, although polybags still dominate the overall market. Blended vegetables and ethnic mixes have reached the saturation point in Britain, Dilworth said. There has been little interest in breaded vegetables, he told QFFI.

With the removal of all internal trade barriers in 1992, Europe will also begin to implement common weights and open-date coding--that means the U.K. will have to start putting metric weights on all its FF packaging. Raw material prices are static on most major items at the moment, thanks to a balanced market. The main challenges in the U.K., Dilworth feels, are the vegetarian opportunity, microwaves, persuading farmers to grow to quality rather than price, organic vegetables (Svendborg Fabrikker reports a growing demand in Denmark, too, for "ecologically grown" vegetables requiring specialized seed varieties), and long-term competition from fresh, chilled or aseptic pack vegetables.

In France, where private label accounts for 30% of the sales in commodity vegetables, there has nevertheless been an evolution toward higher quality, with upscale "extra fine" lines replacing "fine" and even "very fine" versions. Oddly enough, introduction of upscale lines has been accompanied by a strong trend toward cartons as opposed to polybags, especially at freezer centers.

One factor is the smaller size of average households; cartons of 300 or 450 grams make more sense than one-kilogram polybags. In 1987, the smaller size cartons showed sales gains of 12%, while the increase was ony 9.3% for one kilogram polybags, according to the French FF magazine Grand Froid. As for 2.5-kilogram polybags, the magazine said, they are losing ground year by year even in freezer centers and home delivery services.

Vegetable blends account for 15% of the French market, and gained eight percent in the first eight months of last year, Grand Froid reported. These include vegetables for ratatouille and couscous; salad blends (to be served cold) such as Californieone, Camarguaise, Creole, Koukai, Andalouse and Mexicaine; and cooked blends such as Meridionelle mix. Bonduelle has pioneered the salads, under its Croq'-salade line; Findus has taken the lead in pre-cooked blends.

Growing even faster--100% last year--are vegetable purees, a segment introduced by Bonduelle in 1985 and since exploited by other companies. Broccoli, celery, peas, carrots, cauliflower and green beans have all been pureed. They come in portion-control chunks of 30 grams (Bonduelle, Wigan La Portagere), 10 grams (Paysan Breton) and six grams (Vivagel). Retail packaging is in 450-gram cartons or one-kilogram polybags; 2.5-kilograms polybags go to the catering market.

Frozen vegetable imports (here including potatoes) by the 12 members of the European Economic Community (EEC) totaled 1,008-210 tons in 1986, according to FICUR (the French Federation des Industries et Commerces Utilisateurs des Basses Temperatures). Exports for the same year totaled 940,761 tons--with the Netherlands accounting for nearly half of that total, at 448,949 tons. Belgium and Luxembourg combined accounted for 252,223 tons, so the Low Countries altogether contributed nearly 75% of all EEC exports.

West Germany was the EEC's largest importer, at 272,367 tons in 1986; Britain was second, at 212,213 tons, and France third, at 190,861. French imports have been growing, due to stagnation in domestic output over the past four years. Spinach and green beans are the main French imports; Britain and West Germany both import substantial quantities of peas and green beans, while the latter takes a lot of spinach as well. Spinach and green beans (aside from potatoes) dominate Dutch exports, peas and green beans those from Belgium and Luxembourg.

Spain, which exported 25,514 tons in 1986, will doubtless become a more important factor now that it is a member of the EEC; ditto Portugal, which accounted for only 4,946 tons in 1986. Spain imported 22,295 tons the same year; doubtless that was mostly potato products. Although it doesn't figure in EEC statistics, Turkey might become a factor in the European import market: it enjoys duty-free entry, and labor and other costs may well be lower than in even Spain or Portugal. Merko Gida Sanayi ve Ticaret A/S, Istanbul, hopes to increase its modest (20 tons) export sales by 30% this year, and has installed additional processing equipment and storage capacity to improve the range and quality of its products, according to Hakki Severge, director.

So far, Merko's business is mainly in strawberries, cherries, apricots, citrus fruits, tomatoes, peppers and cauliflower. Trial production of broccoli, corn and leeks is under way, but it doesn't amount to much yet. Contract farming for frozen fruits and vegetables is only just beginning; sourcing for frozen products is still mostly from produce intended for the fresh market. But Turkish frozen fruit and vegetable production is expected to double in the next two years as new plants come on line, (1988 total was about 40 million pounds, or about 18,000 metric tons), reports another Merko executive, Duncan Blake, and an irrigation project in southeast Anatolia will bring an "enormous" area into cultivation in 10 to 15 years.

Turkey counts its competitors for the European market as Yugoslavia and Poland. Meanwhile, way down east, in China, the Shantou Special Economic Zone Agriculture Development Corporation boasts it exported 15,000 tons of vegetables in 1988, earning $3.3 million in foreign exchange for the Shantou and Chaozhou regions of Guangdong Province. The corporation has 667 hectares under cultivation, including American sweet corn and asparagus on 167 hectares each, various "high grade" vegetables on 200 hectares and "other" vegetables on 133. Those 1988 figures are only through September, compared to 14,000 tons and $2.5 million for the whole of 1987. Japanese cauliflower as well as American corn and asparagus are said to have produced bumper crops last year; exports are apparently mainly to Hong Kong, and include such fresh produce as cucumbers and lettuce--which are now assigned 233 hectares.

Gratins Popular

Creamed spinach accounted for a market of about 5,000 tons last year, and there are a few other creamed vegetable products in France, notably broccoli. Breaded vegetables, including cauliflower and mushrooms, have been introduced by Findus and Wigan La Portagere), and in 1987 Findus launched a line of au gratin vegetables such as spinach souffle, aubergines courgettes. Bonduelle followed up last year with its Les Bos Gratins line, and Vivagel and Wigan La Portagere have now gotten into the act with items like Gratin Dauphinois.

Although it doesn't amount to a lot of volume, there is a certain amount of prestige attached to Sloan's Supermarkets, New York, N.Y., importing Bonduelle frozen vegetables from France. "It's because of an image situation," said Jules Rose, chairman of the board. "You want to have the whole store reflect a sophisticated image." Sloan's has been carrying assorted varieties of Bonduelle vegetables in 16-ounce packs for a couple of years now. How do they sell? "A whole lot better when they're featured at 99 cents," Rose quipped. But they do well enough the rest of the time that he feels justified in expanding the line, albeit not willy-nilly -- "French frozen vegetables aren't necessarily always better than domestic lines."

Meanwhile, at Oregon's Norpac Food Sales, Colin A. MacDonald seems to think that a lot of U.S. product managers are barking up the wrong tree. Prepared vegetables? "A dog; limited growth due to price." Breaded vegetables? "Doggy; bad for diets." Fruit bars and other exotic fare? "A real dog." Purees? "Not much potential." Blends? "This category is close to maximum." About the only real potential he sees is in portion control items or instant salads for the catering (foodservice) trade. MacDonald also looks to South America as the next source of supply (Uruguay, Chile and perhaps Argentina already have considerable export potential.)

Meanwhile, the Soviet Union is short of potatoes. Three out of four of them never make it to the country's dinner tables--not because of vodka moonshiners, but rather because they get lost in transit, or rot on the ground for lack of transit, or rot in transit. So complains Komsomolskaya Pravda, the Soviet youth newspaper. This isn't exactly news; Western journalists have been saying it for years, and China seems to delight in running exposes on Soviet agricultural losses (although itself has a poor transportation system for perishables). Just last month, Mikhail Gorbachev proposed a reorganization of Soviet agriculture to emphasize private leaseholds and thus encourage more productivity--but without better transportation, improved yields may not help that much.

What's New in the West

In the West, new products are the thing; getting them to market can be taken for granted. An example in the U.K. is a line of frozen souffles--Cheese, Smoked Ham, Spinach, and Broccoli and Almond--from Frozen Quality Ltd. (Froqual), London. Froqual figures it is a real breakthrough in added-value products, because it is so hard for amateur cooks to get souffles right that they hardly ever even try. The products come in twin packs, each souffle in its own CPET ramekin. They are positioned to serve as breakfasts (the smoked ham version, in particular), snacks or "lazy" main meals, and to appeal to both calorie counters and (for meatless versions) vegetarians.

Findus, meanwhile, has rolled out Brittany Cauliflower as part of its range of specialty vegetables, exploiting the reputation of the Brittany region of France for superior produce. "New from France" reads a notice on the package; the box contains an inner plastic bag to assure greater freshness. Other items in the Findus specialty range, which showed a 10% growth last year, include Mange Tout, asparagus, corn on the cob, creamed spinach and saute potatoes. Introduction of the cauliflower, in 300-gram packs, seems to parallel introduction of items like IQF broccoli in the United States. But larger sizes (16 ounces) in both national brands and private label are becoming the rule for IQF broccoli in the U.S.

While on the subject of broccoli, Sunseeds Genetics, Inc., Hollister, Calif., reports that demand for a new hybrid seed, Green Lady, has outrun the supply. The variety, with blue-green dome-shaped heads and very fine beads, was developed especially for commercial freezing--only trial samples have been available recently. Other recent Sunseeds items include the Eagle, a hybrid carrot that grows well in muck soils to roots eight or nine inches long and an inch and a half across; the Everest, a hybrid cauliflower with exceptionally pure white head color; the Debut, a hybrid spinach that reportedly out-yields all others and is tolerant to three types of Downey mildew; and Prime Pak, a hybrid sweet corn with ears nine inches long and two in diameter, resistant to rust and wilt.

At the other end of the production cycle from seeds are the preservatives. The American Frozen Food Institute (AFFI) is concerned that a proposed regulation against sulfites fails to list mushrooms as a GRAS (generally recognized as safe) exception. "Sulfite treatment is absoutely necessary to obtain a good quality frozen, unblanched mushroom," AFFI declared. "Untreated mushrooms deteriorate rapidly during processing and are subject to discoloration during defrosting. No identified alternatives to sulfites are available for this use."

Meanwhile, in the frozen fruit and berry market, it appears that the 1989 Mexican strawberry crop won't do the United States much good--Japanese, Australian and European importers have dibs on 40-50 million pounds of the 60-70 million pound harvest. Japan uses strawberries in processed products, ranging from preserves to ice cream, pie filling, yogurt and topping--and Mexican strawberries are firmer, offering better fruit identity. By March 9, Imperial Frozen Foods, Great Neck, N.Y., an importer, was "virtually sold out" of the 1989 Mexican pack, although it had some 1988 lots left over. "Don't be surprised to learn that all Mexican strawberries will be priced higher than California and Northwest now and in the near future," warned Imperial's Sam Skolnick.

California increased its strawberry acreage to 19,000 this year, compared to 17,650 last year, when the yield was 856.1 million pounds (203.7 million of which went into freezers). Nationwide pack was 313 million pounds, down from 334 million. Average field price was 23.7 cents a pound for No.1 berries last year, compared to 28.7 cents in 1987; 1989 prices were to be posted beginning in May. Blackberry deliveries to Northwest processors last year were 31.9 million pounds, down from 35.8 million; red raspberry deliveries 34.7 million pounds, down from 40.6 million; and black raspberry deliveries 3.36 million pounds, down from 4.44 million.

Meanwhile, at the other end of the U.S., the Wild Blueberry Association of North America reported a record crop of 52.3 million pounds for 1988, compared to 36.3 million for 1987--a 44% increase. Maine accounts for about half the wild blueberry harvest in North America. The rest comes from the five eastern provinces of Canada. (Western Canada, meanwhile, is a source of raspberries, although statistics on production aren't immediately available.) Meanwhile, on the other side of the world, China is trying to develop an industry around such specialty items as Chinese gooseberries ("kiwifruit," as it is better known in the Occident). Fourteen farms are being set up in Shanxi, Hubei, Henan and Jiangsu provinces for the gooseberry project.

Frozen peach production in the United States was off somewhat last year, from 144.9 million to 134.9 million pounds; price was also down, from $169 to $160 a ton. Frozen apricot output was down from 13,100 tons to 12,200, but the price rose from $291 to $294 a ton. There was a small amount of frozen prunes and plums, 1,300 tons (up from 1,200), priced at $128 a ton (down from $135). Frozen tart cherry output fell from 188.2 million to 161.6 million tons, with the price tripling from 7.4 cents to 22.5 cents a pound. Frozen apple output statistics for 1988 won't be available until July 10; for 1987, it was 248.8 million pounds, and $132 a ton--both down from 1986.

Climbing the `Bean Stalk,' Vegetable Growth Tops All

Regular frozen vegetable tonnage rose 2.5% in the United States last year, giving the category a 15.4% share of all frozen food products sold in retail stores. Dollar value was up almost 7%. And, according to statistics from SAMI-Burke, prepared vegetables logged an even more impressive 10.8% gain, while rising 15.3% in value.

The New York-based consumer product tracking service reported that prepared vegetables led all FF segments in growth. Second on the tonnage list was breakfast foods, which posted a 10% gain in supermarket movement. Here's how other categories fared:

Baked goods, +3.7%; potatoes, +3.5%; single dishes, +3.2%; fruits, +3%; prepared foods, -0.9%; juices and drinks, -2.9%; pot pies, -3.8%; meat and fish, -5.5%; refrigerated and frozen desserts, -5.8%.

PHOTO : Microwaveable single-serve boxes continue to be rolled out in the United States as the

PHOTO : leading vegetable packers vie for the small-household market. The Birds Eye "For One"

PHOTO : offering of Potatoes & Broccoli in Cheddar Cheese Sauce sells for 89-cents per 5-ounce

PHOTO : serving. The Green Giant "One Serving" of LeSueur Baby Early Peas in Butter Sauce, which

PHOTO : is presented in a special microwave-designed tray, costs a dime more at 99-cents per

PHOTO : 4.5-ounce serving.

PHOTO : Specialty imports merchandised in boxes are among the current hot sellers in the U.K.

PHOTO : Findus's Brittany Cauliflowers (top) from France is an example of such a product. Above, a

PHOTO : 1.2-pound bag of Saute Potatoes boasts "20% Extra Free."

PHOTO : Froqual's new Perfect Souffles line is formulated to turn amateur cooks into goof-proof

PHOTO : chefs. The Spinach and Broccoli & Almond offerings show just how much value can be added

PHOTO : to frozen vegetables.

PHOTO : Future frozen vegetable packs may feature these new varieties promoted by Sunseeds

PHOTO : Genetics: A hybrid sweet corn (left) with ears nine inches long and two inches wide; a

PHOTO : hybrid carrot (above) that grows especially well in muck soils.
COPYRIGHT 1989 E.W. Williams Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Annual QFFI Survey; includes related article on organic vegetables
Author:Pierce, J.J.
Publication:Quick Frozen Foods International
Date:Apr 1, 1989
Previous Article:Some big Israeli FF firms struggle, but innovative entrepreneurs bloom.
Next Article:Italian market remains conservative when it comes to frozen vegetables.

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