Despite challenges, berry boom will continue

11/03/2012 05:15:00 PM
Vicky Boyd

Fresh berries are one of the hottest items in the produce department and will continue to be so for at least the next three years, according to a report by New York-based Rabobank's Food & Agribusiness Research and Advisory.

At the same time, grower-shippers will face higher production costs, resource constraints, increasing import competition and retailers' market power.

berriesVicky BoydThe challenges already are coming to light for strawberry growers, who are beginning to outgrow available resources, squeezing margins and prompting consolidation.

They also face the loss of the soil fumigant, methyl bromide, and stricter regulations on other remaining fumigants.

The bulk of production is centered in Florida and California, where prices have not kept up with increasing production and land costs, according to the report.

Successful growers will be able to continue efficiencies while developing new varieties and adopting labor-saving harvesting technology.

Rabobank expects retail berry sales to grow 7 percent annually during the next three years, according to the report.

Among the driving factors will be new varieties, year-round availability, production expansion and increasing use by food-service customers.

But health is expected to by the leading driver of increased sales.

Strawberries comprise about 55 percent of the overall category, with blueberries accounting for another 26 percent.

Retail berry sales amounted to $3 billion in 2011, according to Nielsen Perishables Group.

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