Opportunity Awaits

Citrus Nursery Source: Opportunity Awaits

The key to the success of a citrus nursery: Sell what growers want to buy. Seemingly a simplistic business model, but as is true with many things, the devil is in the details — and the target is moving. The picture is a little more clear on processed varieties, but fresh varieties present a unique challenge. Space in nursery screenhouses is at a premium, and few nurseries will speculate on what growers might want. Nurseries wait for growers to request varieties and grow on contract. Growers don’t want to plant what packers and marketers aren’t requesting. What consumers are demanding today should have been anticipated and planted five years ago.

The simple answer is to get all parties on the same page. I know, I know, stop laughing. Since this is about as likely as a satisfied Gator football fan, let us consider the factors that affect variety demand by working our way up the decision tree.

The Ag Marketing Resource Center reported that, in order to affect demand of fresh produce, you need varieties that meet consumer needs and have new or novel characteristics. Following better varieties, demand can be affected by rising incomes (fresh costs more, and better fresh costs most), production expansion (so local supply can supplant import), population diversity (new tastes and preferences), recognition of lifestyle changes (need for convenience), and increased consumer awareness of the health benefits of consuming fresh fruit.

Comparing Apples To Oranges

No commodity group has been more successful at increasing demand for new varieties than the apple industry. Success factors for apple included: development and commercialization of better varieties (that drive demand, not just consumption); meeting the needs of traditional buyers while attracting new consumers; expansion of season (better storage); new flavors; and differing appearance.
 
Retailers are very clear about their perception of consumer needs when it comes to fresh citrus. Retailers want seedless, easy peel, good shelflife, good external color, year-round supply, sufficient flavor (to drive repeat purchases), and innovative packaging (to drive impulse). Clearly, packaging is outside the control of nurseries, but be aware of what retailers are looking for. Retailers impact packers. Packers influence growers.
 
A 2011 study published in the International Food and Agribusiness Review (conducted cooperatively by FDOC, UF/IFAS, and USDA-ARS) addressed consumer preferences in fresh citrus. According to this report, consumers (in order of importance) care about freshness, appearance, flavor, juiciness, size, price, peelability, and seed count.
 
Drive To Survive
So, we have an idea what the retail trade is looking for. We also have insight into what drives consumer purchases. The result of ignoring this information is clear. Twenty years ago, Florida had roughly 53,000 acres of fresh specialty fruit. Ten years ago, this dropped to approximately 27,000. Today, this number is 13,000 to 14,000 acres. Though freezes and disease pressure factor into the equation, changing demand factors have clearly had an impact. (This logic can be applied beyond specialty fruit).
 
Citrus is a perennial crop, and can’t turn on a dime like some berry or vegetable industries. Propagations take 10 to 12 months and trees require four to five years to produce a crop. Critical mass is necessary to establish retail demand. Nobody has the magic formula to solve this dilemma. However, in light of what we do know, consider this road map:
– Understand what consumers are looking for. Marketers and growers will select varieties that help meet this demand.
– Understand what retailers want or will accept. This may differ from consumers, but is no less significant.
– Work with your growers to make decisions based on anticipated demand. In the fresh arena, growers don’t want to be ordering trees when others already have reached critical mass and whose fruit is in the marketplace.
– Nurseries that want to be successful with fresh varieties must engage early and commit resources. There is risk here as not all varieties will make it commercially. Differentiate.
– Nurseries and packers/marketers are becoming more involved with their growers’ production practices. As advanced production systems are adopted in the field to accelerate cropping and minimize lag time to critical mass, rootstock variations and potting systems (for better development) at the nursery should be part of the overall system.
– As critical mass of new varieties grows near, the industry will support activities that increase trade and consumer awareness to drive demand and commitment of shelf space. Private marketing efforts will ultimately engage to sell these new varieties into the market with packaging innovations, merchandising, etc.
Early strategic involvement of citrus nurseries is critical to the success of the fresh and processed sectors. Times are changing. Get in gear.

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