Six Reasons For Chilean Blueberry Crisis

I attended the the Seminario Arandanos put on by ASOEX on May 26th and May 27th in Santiago, Chile. It was attended by over 750 people including growers, exporters, marketers and other blueberry industry stakeholders. I thought Juan Ignacio Allende, General Manager of Exporter Vital Berry Marketing, gave an insightful presentation on what caused, as he dubbed, the “blueberry crisis” in Chile this past season. Mr. Allende cited six main reasons that caused the blueberry crisis during the 2008-09 season. They are as follows:

1. Violent and Concentrated Growth of Blueberry Supply

Fresh blueberry supplies in Chile increased from 22 million pounds in 2004 to approximately 92 million pounds this past season, a 300% increase in the last five years. However, Mr. Allende noted it was the “violent” increase in supply during weeks 48 through week 4 that caused the major disruption. Also, 85% of the fresh fruit was sent to the U.S. versus only 78% the previous season. (see reason #6 below).

2. Limited Retail Promotions for Spike in Blueberry Production

Exporters, marketers and retailers were caught off guard by this significant increase in production and there were not enough retail promotions set up in the U.S. in order to move this amount of volume. However, you can’t blame U.S. retailers for this one, as they are only as good as the information they are given.

3. Poor Quality of Blueberries

This huge spike in production in a nine week period put pressure on the industry to harvest, pack and ship the fruit in a timely manner. Therefore, there was a lot of poor quality fruit that arrived in the U.S. market and this just exacerbated the problem.

4. Too Many Retail Blueberry Pack Sizes

In past seasons, most retailers, excluding club stores, sold 4.4 oz. and 6 oz. clamshells. However, due to the “violent” increase in volume, retailers sold 6 oz., 1 dry pints, 18 oz. and 2 lb. packs. There was not a standard retail pack, which created instability in the market. In addition, there were a significant amount of 6 oz. cases that were shipped to the market which drove down price.

5. High Retail Prices & Margins

Mr. Allende moved to California during the past season to analyze the market. What he observed was that retailers were charging too much money for Chilean blueberries, which curbed consumer demand. For example, according to his figures, retailers were purchasing cases of blueberries containing 4.5 lbs of fruit for $8-$10 per case and they were retailing them for between $24 and $48. More specifically, their cost was approximately $0.67 per retail (6 oz.) unit and selling them from $1.99 to $3.99. Retailers were able to get away with this when there was not as much volume, but not anymore.

6. World Currencies Dropped Versus the U.S. Dollar

The drop in Euros and the GBP versus the U.S. dollar severely impacted blueberry exports to the U.K. and countries in Europe. For example, in April of 2008 the British Pound was worth $2.00 to $1.00 U.S. But in April of 2009, the exchange rate was $1.50 GBP/$1.00 USD.

This 2009-10 season will be very important for the Chilean Blueberry industry. Blueberry growers, exporters, marketers and retailers will need to work together in order to move this crop. Mr. Allende recommends the following solutions:

1. Better retail prices and lower margins
2. Set up programs in advance
3. Improve fruit quality
4. Develop new markets

If the industry can accomplish these four things, they can turn this crisis into a "Blueberry Recovery."

Top 5 Reasons @BerryGiant Uses Twitter

Some of you might be wondering why I am blogging about
Twitter and not berries, but if you are spending time reading my blog then you might be interested in following me @BerryGiant on Twitter. So I have listed the top 5 reasons why I use Twitter, in no specific order of importance. These aren't the only reasons, but these were the first 5 that came to mind.

Reason #1: I share my berry experiences and travels through Twitter

I have a unique role in my company. Amongst other responsibilities, I am responsible for developing our berry supply which takes me to cool places like Argentina, Chile, Uruguay, Mexico, Oregon, Washington, New Jersey, Florida and of course my home state of California. I travel to all of these locations and meet with berry growers/suppliers and most of the time, I visit their farms. This role gives me a unique insight into these berry growing markets. Thus, I feel that I can add value to my followers by providing them with up to the minute information on each of these markets and the different variety of berries being produced. For example, last week I attended a Blueberry Seminar in Santiago, Chile and was able to update my followers on the seminar in real time. Next week I will be doing the same from Tucuman, Argentina where I will be a guest at Profutal's Fresh Fruit Expo.

Reason #2: I build relationships and my network through Twitter

I have met many new people and have built a stronger relationship with friends through Twitter. For example, I met @agleader through my brother-in-law who is a fellow farmer and neighbor of @agleader in Los Banos, CA. However, I only saw @agleader a couple times per year and heard bits and pieces about his life through my brother-in-law. Well, Twitter has allowed me to get to know more about @agleader, both professionally and personally, through his tweets. In addition, I follow him because I get relevant news that impacts the agriculture industry. He is farming news for me.

Also, @agleader introduced me to his followers and introduced me to #AgChat. According to #AgChat, "it originated on the microblogging site, Twitter. Since there are a number of agriculture folks now on Twitter, it's a logical tool to discuss issues related to our business. The mission of #agchat is to keep an ongoing, open dialogue amongst the various players in the agriculture, farming and ranching worlds." There is a weekly Tweetchat on agriculture topics. I would have never been introduced to #AgChat if it wasn’t for @agleader and Twitter.

Reason #3: I obtain my news through Twitter

I follow @foxnews, @kyracnn, @espn, @thepacker to name a few in order to obtain my news daily. You see, in pre-twitter days, I would have to log onto each of those sights to obtain my news. Once there, I would have to spend time navigating the website to find the news that is important to me. By following these sources on Twitter, the news comes to me and I can quickly scan the tweets on my blackberry in the morning before my commute (Okay sometimes during my commute) for the news I want drill down deeper on. However, most importantly, I also receive a great deal of news from the people I am following and not just the media.

Reason #4: I'm building my personal brand through Twitter

Twitter users are expected to grow to 18.1 million users by 2010. According to Dan Schawbel Author of ME 2.0, "By leveraging the Twitter platform to build your brand you can showcase yourself to a huge and growing audience." Therefore, I hope to add value to my followers and build my personal brand through Twitter.

Reason #5: I get consumer feedback about berries through Twitter

I like to log into Tweetdeck and follow what people are saying about strawberries, blueberries, blackberries and raspberries. I use Twitter Search to follow key words and my computer “tweets” constantly about berries. In fact, I turn Tweetdeck off during work hours because the chirping is too distracting and I'm too curious about what people are saying about berries. I would never get any work done.

So these are my top 5 reasons why I use Twitter. How about you?