More research is planned on the issue in coming months, Richards said, including a closer look at what crops that will suffer declines and how import markets will respond.
Sherry Frey, vice president of Nielsen Perishables Group, said in a news release that certain consumers — young consumers of avocados, for example — will be more heavily affected by the price increases.
“While some consumers will pay the increased prices, others will substitute or leave the category completely,” she said in the release.
For a category like avocados, reduced purchases will also hurt sales of some non-produce snacking categories, such as chips, crackers and ethnic grocery items. Higher prices will mean retailers will start looking elsewhere for produce, she said in the release.
“This means we’ll see a lot more imports from places like Chile and Mexico, which may be an issue for certain grocery customers who want domestic fruit and vegetables.”
Richards said his research only looked at domestic supply and fruits and vegetables and did not try to account for possible increases in imports. Over the medium term, Richards said he expects there will be more imported produce supplied to U.S. markets to substitute for any shortage from California. “That will be the thing that will moderate the price impact relative to what we have here,” he said.
Richards said consumers may try to substitute some items like berries to fruit not affected by the drought, such as apples.
Richards estimates the following possible price increases due to the drought:
- avocados, up 17 to 35 cents to as much as $1.60 each;
- berries, up 21 to 43 cents to as much as $3.46 per clamshell;
- broccoli, up 20 to 40 cents to a possible $2.18 per pound;.
- grapes, a rise of 26 to 50 cents to a possible $2.93 per pound;
- lettuce, could rise 31 to 62 cents to as much as $2.44 per head;
- packaged salad, up 17 to 34 cents to a possible $3.03 per bag;
- peppers, up 18 to 35 cents to a possible $2.48 per pound; and
- tomatoes, likely to rise 22 to 45 cents to a possible $2.84 per pound.