Fresh Berries Move Into New Markets

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Fresh berries move into new marketsGlobal Berry Congress 2011

Joe Barsi, VP Business DevelopmentApril 2011

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Agenda

Background

What the export berry numbers tell us

What the export berry numbers don’t tell us

Export Opportunities & Challenges

Summary

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Introduction

Watsonville, CA native

Worked in the produce industry for 18 years

Worked for California Giant Berry Farms for 6 years

Help develop global berry supply Joe Barsi

VP Business Development

California Giant Berry Farms

jbarsi@calgiant.com

twitter.com/BerryGiant

http://berrygiant.wordpress.com

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California Giant Berry Farms

One of the largest berry companies in the U.S.

– Founded in 1970– Privately held by four owners– Market ~25 million cases per year

Vertically Integrated– Market Full Line of Berries– Plant Nursery– Berry Grower- Packer - Shipper– Sales & Marketing

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What the numbers tell us

Statistics

Trends

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North America is the dominate exporter of berries worldwide

Fresh Blueberries, 2010

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U.S. berry exportscontinue to grow

Strawberry Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Product Group : BICO-HS10. Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

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Top Markets for Fresh U.S. berries show strong volume increases

Strawberry Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Product Group : BICO-HS10. Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

CountryAverage Annual

Export ($k)Growth

since 2008Canada $353,904 17%Japan $30,100 85%Mexico $17,943 -67%United Kingdom $7,949 -79%Hong Kong $3,470 241%France $1,926 55%United Arab Emirates $1,570 180%Taiwan $1,327 99%Australia $1,124 -88%South Korea $661 37%Saudi Arabia $652 15%Singapore $514 460%Bahamas $513 24%

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Asia is the fastest growing region outside of North America

Strawberry Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Product Group : BICO-HS10. Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

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The Strawberry Market

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Strawberry Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Product Group : BICO-HS10.

U.S. Strawberry Exportsare steadily increasing

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Canada is the largest market for fresh U.S. strawberries

Strawberry Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Product Group : BICO-HS10.

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Fresh Strawberry Exportssince 2008

United Arab EmiratesUp ~180%

UKdown

Hong KongUp ~270%

TaiwanUp ~110%

Australiadown

CanadaUp ~15%

Mexicodown

Japan ~50%

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The Blueberry Market

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Fresh U.S. blueberry exports increased 32% but revenue softened

Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

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Canada is the largest market for fresh U.S. blueberries too

Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

Canada87%

United Kingdom5%

Japan5%

Hong Kong1%Others

2%

Top Export Markets for Fresh U.S. Blueberries(Ave Annual Exports $k)

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Fresh Blueberry Exportssince 2008

JapanUp ~100%

UKdown

Hong KongUp ~150%

SingaporeUp ~680%

CanadaUp ~30%

Blueberry Data Source: United States Export Statistics, Commodity: 0810400028

MexicoUp ~500%

Australiadown

TaiwanUp ~56%

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What the numbersdon’t tell us

Statistics

Trends

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Improving standards of living

Global growth of middle class in emerging economies – BRIC

Increase in discretionary income in emerging markets

Cultural traditions focused on health & beauty

Awareness of nutritional value of blueberries has grown worldwide

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New berry-related products are being introduced around the globe

Blueberry products

Blueberry data source: Thomas J. Payne Market Development

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Pet Food Products

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Opportunities & Challenges

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China: Net Importer?

Hong Kong is the gateway

USDA indicates Strawberries on the list for approval ~24 months

Blueberry transshipments through Hong Kong, Macau and Japan

Demand is highest in large coastal cities

Increase in freezer shipments

Western Retailers: Wal*Mart & Carrefour, Tesco

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India is “red hot” despite stats…

USHBC & Thomas J. Payne M.D.

Oregon, B.C. & California are all shipping

Duty Free Shipments through Sri Lanka & Bangladesh

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Challenges

Natural disasters

Pests

Government

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Strawberry Exports to Mexico down

26,550  20,430  35,921  15,675  11,735 

$22,021 

$17,046 

$29,218 

$12,747  $11,437 

0 

5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

35,000 

40,000 

2006 2007 2008 2009 2010

Lb. o

r $(0

00)

Quantity lbs. (000)Value ($000s)

Source: USDA Census Bureau Data

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Strawberry exports to Japan

8,750  8,152  7,995  10,853  12,361 

$23,261 

$21,173 $22,025 

$24,411  $26,136 

0 

5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

2006 2007 2008 2009 2010

Lb. o

r $(00

0)

Quantity ‐ lbs. (000)

Value ($000s)

Source: USDA Census Bureau Data

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Strawberries

Country Opportunities Challenges

Mexico 2nd Largest Export Market NAFTA Trucking Dispute

Middle East Surpassed France as 5th largest market Logistics

Hong Kong Gateway to China Grey market

Japan Established and growing market Natural Disaster

Australia Pre-Clearance Program SWD & Angular Leaf Spot

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Blueberries

Country Opportunities Challenges

India Population/Fresh promotions/Positive Media Distribution & Cold Chain

China Increased demand/Retailers & Distribution Phytosanitary restrictions

South Korea Increase in freezer shipments/50% chance Phytosanitary restrictions

Taiwan Growing fresh imports/Retail Promotions“Overseas Chinese" controlled

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Summary

Berry production is increasing worldwide

Consumers in existing & new markets are discovering berries

Berry demand is increasing globally, especially in Asia

Companies need to be flexible and opportunistic to capitalize on export opportunities

“Technology and social networks are driving equality globally — creating a more informed customer than ever — and it’s all happening at light speed,” Lee Scott, Former CEO of Wal*Mart Stores

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Thank You

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