A record-breaking year for Northwest cherries
Northwest cherry exports to China and Hong Kong topped the million-box mark for the first time.
Exports of Northwest cherries in 2011—a shining star in dreary economic times—continue to play a key part in keeping cherry production profitable. Northwest cherry exports broke records last year—in terms of both the number of cherries exported (5.74 million boxes) and the total value of exports ($257 million), based on f.o.b. prices.
About a dozen foreign market representatives for the Northwest Cherry Growers gathered in Cle Elum, Washington, in mid-December to plan future cherry and stone fruit export promotion programs. The foreign market specialists presented a snapshot of market constraints and opportunities for Northwest cherries in the countries they represent. Northwest Cherry Growers, the promotion arm for cherry producers in Washington, Oregon, Idaho, Utah, and Montana, coordinates export promotions in about 25 countries, as well as on the domestic market.
China and Hong Kong
Northwest cherry exports to China and Hong Kong have skyrocketed in the last five years—nearly quadrupling in the number of shipped boxes—to make the region the number-two export market after Canada. Canada has imported an average of around 1.7 millions boxes of Northwest cherries in the last five years. In 2011, exports to China and Hong Kong topped the million-box mark for the first time, compared with around 300,000 boxes shipped there in 2007, said Philander Fan, Northwest Cherry representative.
China is experiencing rapid expansion of retail chains in second- and third-tier cities, Fan said. The numberof importers is increasing, and marketers and consumers are more knowledgeable about Rainier cherries, all of which bode well for a continued strong market. Constraints in the Chinese market are high tariffs and competition from Chinese, California, and Canadian cherries.
Taiwan, the number-three Northwest cherry export market, imported more than 666,000 boxes of Northwest cherries last year. Taiwanese are some of the highest fresh-fruit consumers in the world, and they like their fruit sweet, said Hermann Kuo, Northwest Cherry Growers representative for Taiwan.
Market constraints include strong competition from high-quality local fruit; hot summer weather that makes cherry handling and storage difficult; intense competition among supermarkets that use cherries as a loss-leader item; and redirection of shipments to China due to better profit margins. But Kuo sees opportunities due to a growing interest in health and consumers who want quality products.
When Ken Yang started as a Northwest Cherry Growers representative for Korea some eight years ago, annual Northwest cherry exports were around 50,000 boxes. Last year, more than 350,000 boxes were shipped to Korea, a country that’s equivalent in size to the state of Indiana but with 49 million people and some 20 million that use smartphones, he said.
Yang noted that the Korea Free Trade Agreement, approved last year, will eliminate the 24 percent tariff on fresh cherries and help make cherries more affordable for consumers, reducing the cost of 200 grams of cherries from the current 9,990 won to around 7,525 won. Cherries are the second-most expensive fruit during the summer season behind blueberries.
The big news in the Australian market was gaining access for Northwest cherries to Western Australia on July 8, in time for the Northwest cherry season, said John Baker, who’s been the representative for the last ten years.
Baker sees strong opportunities for growth in Australia. A record number of Northwest cherries were exported last year—332,500 boxes—and there is good support from the retail trade for Northwest cherries.
“The trade is excited about Northwest cherries, and they get it right at the retail level with visual displays and front entrance locations. They know red cherries and are learning about Rainiers.” He sees market potential for Rainiers with the large number of Asians living in Australia and believes that fruit quality will improve with elimination of fumigation once a systems approach is approved for Tasmania.
The importance of Japan as an export market has declined in the last seven years as Northwest cherry exports dwindled from a high of nearly 585,000 boxes in 2005 to around 300,000 in 2010 and just 266,000 last year. But Scott Hitchman, Japanese representative for 15 years, believes things are changing. Japan has rebounded from the nuclear and natural disasters of last spring.
“Japan is not the same market as it once was,” Hitchman said, noting that in the past, fruit importers would not import Northwest cherries after July 10. “But now, retailers recognize the category contribution of cherries, and in 2011, cherries were marketed clear to September 11.” He sees potential for later cherries, and with adequate crop, believes Japan will become a four-month market.
George Smith has represented Northwest cherries for two decades. Northwest cherries are in demand but face stiff competition from other stone fruits, he said, adding that U.K. cherry production is on the rise as growers replace plums with cherries and plant varieties like Attika, Kordia, Regina, and Sweetheart. The East Malling research station has put emphasis on U.K. cherry production in recent years.
Cherry production in Europe is on the decline, and Turkey, after 15 years of cherry production growth, exported fewer cherries in the last few years. Small Turkish cherry growers have had quality control problems, heat stress has reduced cherry quality, and important transportation routes through Syria have been closed.
Northwest cherry exports to the three Southeast Asian countries of Singapore, Malaysia, and Thailand have more than doubled in the last four years, said Phornthip Poolprasert. Combined cherry exports in 2008 were nearly 75,000 boxes, climbing to more than 183,000 boxes
in 2011. Growth opportunities exist, especially in Malaysia and Thailand, though Singapore is important because it is a gateway to other Southeast Asian countries, she said, noting that consumers have a positive perception of U.S. products.
Mexico and Brazil
Mexico, with its close proximity, represents great opportunity, said Juan Carlos Moreira. “There’s huge potential because 80 percent of our target market have never tried cherries before,” he said. “But when they try fresh cherries, 80 percent are then actively looking for the fruit.” Walmart and Costco have a strong presence in Mexico, and Costco, at 27 locations, is also a foodservice provider to hotels and restaurants in tourist locations.
Francesco Sicherle, Brazilian representative, said that Northwest cherry imports increased nearly 50 percent last year from 2010. Importers are looking for different products, and the weak U.S. dollar has helped to spur U.S. exports. He sees export opportunities in the future. Both the 2014 World Cup and 2016 Olympic Games will occur during the Northwest cherry season.