The California table grape industry is growing by leaps and bounds with continued profitability in its crosshairs.
A report from Rabobank paints the California table grape industry as a robust business where variety innovation is strengthening its competitive advantage globally.
“The recent proliferation of new varieties has been key to expanding the late-season market for U.S. grape growers,” according to the report’s author – Karen Halliburton-Barber, a senior analyst with Rabobank.
“These varieties are helping growers shift to higher yielding, more efficient varieties to help mitigate rising production costs.”
Table grapes are a large segment of the U.S. produce industry with record-breaking retail sales last year at about $2.5 billion. Sales growth is rising about 9 percent annually.
“Rabobank sees the potential for U.S. table grape industry sales to grow to $3 billion in the next five years if current trends continue,” Barber told Western Farm Press.
Among the reasons for strong growth is growers are shifting from older varieties (Crimson, Thompson Seedless and Red Globe, for example) to newer varieties (including Autumn King) which can reduce grower input costs and boost productivity – in other words more boxes of fruit per acre.
Another reason for the strong market growth is the more natural colors of newer varieties, and larger-sized fruit which is catching the attention of consumers looking for a different grape.
Today, shoppers prefer the grape colors red, green, and black, respectively.
Most table grapes today are seedless, which like mandarin citrus, are drawing strong consumer acceptance.
Extra sweet and super sweet varieties are tantalizing consumer taste buds, including the new cotton candy grape variety. Media attention to sweeter grape options has helped sway consumers to taste new grape flavors.
Overall, Barber says the demand drivers for fresh grapes include health benefits, convenience, taste, and appearance.
On average, consumers eat about eight pounds of grapes annually.
Kathleen Nave, president of the California Table Grape Commission, says table grape shipments have increased exponentially over the last decade. Last year, table grape shipments from the Golden State hit a record at 117.4 million boxes.
This compares to about 80 million boxes in 2003. Shipments broke the 100 million box plateau in 2012.
Rapid export growth
Table grapes are the sixth largest California exported farm commodity, according to the California Department of Food and Agriculture. Nearly one-half of the California fresh grape crop was exported last year – a record setting 48.6 million boxes.
2013 exports to Canada, the largest foreign buyer, soared 17 percent over the previous year. China-Hong Kong are the second leading export market (7.9 million boxes), followed by Mexico (6.6 million boxes).
The 2014 California table grape harvest begins in May with fruit from Coachella Valley vineyards in southern California and then shifts northward.
Barber says marketing advances, including new packaging, have benefitted grape growers. Packaging changes have reduced grape shrinkage from nearly 20 percent about a decade ago to nearly 0 percent today.
The major challenge for the California table grape industry is profitability. Barber says the key is to produce more grapes per acre to offset escalating costs for land, labor, and water.
Traditionally, Thompson Seedless grapes yield about 800 boxes per acre while the goal for the new Autumn King variety yield is nearly 1,500 boxes per acre – an almost 50 percent increase.
Some newer fall varieties have extended grape shelf life in cold storage which allows shipping into early February. This inches the California table industry closer to its goal as a year round supplier of fresh grapes.
The full Rabobank table grape report, entitled “The Right Variety at the Right Time – Securing Success in the Robust U.S. Table Grape Market,” is available to Rabobank customers.