Cropped view portrait of pretty cheerful wavy haired girl holding in hands pile cherries isolated on bright yellow color background

DOMESTIC MARKET REPORT - 2023

In 2023, the Northwest Cherry industry struggled due to the California sweet cherry crop that was three weeks later than normal. Prior to Northwest growers picking a cherry the market became saturated with high priced and slow moving California cherries that led to painfully low FOB prices in early June.  California had a 9.4 million 20 lb. equivalent box crop … which was the second largest CA crop on record.   As a result, there was California fruit in the domestic market until at least the 3rd week in July, even though California’s reports show they stopped shipping July 3rd. With so much fruit in the market, many growers were left deciding if it was worth it to pick or if the cost of labor would have been more than what they would make on their returns. While we shipped 18.7 million boxes, there were at least 4-5 million left on the trees that weren’t picked.

The team at the Northwest Cherry Growers uses cherry category research to align retailer promotions and consumer publicity programs that provide a surface upon which our industry can gain traction with their fruit.  Each year presents a different scenario/challenge, and every grower deserves the same chance at success.   We believe our year-round efforts to help set the table for a successful market have led to a multitude of increased domestic opportunities for the industry.  

NORTH AMERICAN 2023 PROGRAM OVERVIEW

Certainly, the export market continues to be a critical part of our sales portfolio when it comes to both crop and dollar volume.   Likewise, as the chart below depicts, the domestic market is the “blue collar” market for working through a large portion of our industry volume.

We knew going into the 2023 season that California was going to have a larger than normal crop. They had the coldest winter that they have seen in 120 years. The growing conditions leading up to their season were ideal and their fruit ate reasonably well.  Throughout the season, we heard the term “Cherry Fatigue”. Between the amount of fruit California had and the Northwest, we couldn’t get the momentum that we needed to really get fruit moving. Luckily, the export market stepped up this season and we were able to export 32.6% of the 18.7 million (20lb equivalent boxes). Canada remaining the largest, but this season we saw a boost in Mexico as well.

As always, the 4th of July holiday is critical to driving demand and retail sales volume in the middle of each season. Unfortunately, this year, we did not have ad pricing going into the 4th of July.  Once NWCG ad programs kicked in … retail prices dropped, and fruit began to move effectively through the system.  That’s when we finally saw California’s tired fruit move out of the market, and the Northwest finally gained the momentum it needed move the back-end of a very challenging crop.

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THE RETAIL PROMOTION RESULTS FOR 2023

Each year our team here at Northwest Cherry Growers sets up retail promotion programs with any retailer that holds more than 5 percent of market share in their respective markets.  Generally, we are setting up programs with over 260 different retail groups each year.  But as with our retail promotions inside a brick-and-mortar store, the message is most effective when delivered at the point of sale.  Making that happen took many forms in 2023, including shoppable ads, website banners and sponsored banners, sponsored searches, kiosk programs, promotions at grocery order pick-up locations, etc. the Northwest Cherry Growers worked to ease the situation and increase the success of both our growers and retail partners during what was another challenging season.

With the 2023 crop being another challenging season for the growers, we were down 2% (18.7 million 20 lb. equivalent boxes) when compared to the 5-year average of 19 million boxes. This average has dropped significantly in the last 3 years due to the challenges the crops have brought. Especially with a year like 2022 where we only had half our normal crop.  

The compliance from retailers to run sponsored Northwest Cherry ads and promotion events this year was one of the largest we have seen. This was the 2nd best in 12 years!

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Retail Promotion Performance Compliance

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We always like to see more retail Northwest Cherry ads; the ads whether online or in the newspaper continue to drive consumers to the stores.  Likewise, like our growers and their bud counts – the more buds the higher the opportunity to have a marketable crop, the more accounts we set up for promotions the more opportunity there is for extra sales and demand for our fruit.   Retail ads drive sales and the momentum gained from promoting the fruit is critical in the successful marketing of each crop.

KEY FACTORS IMPACTING RETAIL IN 2023 BY TERRITORY

Fresh blueberries in a shopping cart photography

Northwest: The Northwest cherries arrived in the market around June 15th. California was marketing 2/3 of a record crop during June. So, to start with California had plugged the market with OK quality but high-priced cherries. The general early June California retail was $5.00lb to $9.00lb. The displays were in the middle of the stores and movement was just fair. With the entry of Northwest cherries, the California retail pricing moved to around $4.00lb – $5.00lb. For the week of June 19th, Northwest came in with more aggressive pricing and took some market share. For major national retailers in the market–Costco, Safeway-Albertsons, Fred Meyer-Kroger, Walmart, WinCo–they reduced their pricing to the $4.00lb range and mixed supplies between California and Northwest. By the end of June there was a big supply of western cherries with California doing an estimated 7 million boxes in June and the Northwest presenting a supply of about 8 1/2 million boxes. By the end of June both California and Northwest retail prices had dropped to the $2.00lb – $4.00lb range and the displays moved to the front. This was greatly enhanced by aggressive Northwest promotion programs. Supplies exceeded demand through the first half of July. There were still some California cherries in the market during the first half of July. All majors–Costco, Fred Meyer-Kroger, Walmart, Safeway-Albertsons, WinCo–moved their retail positions to the front and reduced prices to generally between $0.99lb; $1.99lb; $2.49lb; $2.99lb and $3.99lb. This pricing, positioning and promotional programing support was maintained through July. During the late June and July period there were strong retail promotions that in many cases continued through mid-August. Regional chains–Family Foods, Rosauers, Thriftway, The Markets, Yokes, Grocery Outlet, New Seasons, Roth Foods, Super 1–were strong Northwest Cherry supporters start to finish. At the same time at least 20% of the Northwest crop was not picked because of smaller size cherries or lack of market demand. Shipping organizations that were vertical integration could stay in the market longer. Many smaller growers left fruit hanging for lack of breakeven returns.

Southwest: The past few months of the cherry season have been challenging due to several factors. California was very late, and then had a record crop which overlapped with our Northwest Crop. The end of June was tough as California unloaded product. This caused a large amount of volume in the market and retailers had the best of both worlds.
Pre-July 4th was a good week for cherry ads but both origins were in the market. Low price and ethnic retailers promoted the last of the California cherries at attractive sale features. Retailers like Super King Markets, Jon’s Marketplace, Superior Grocers, Big Saver and El Super continued to push hot front-page features during the Northwest Cherry Season.
Another disappointment was the retailers did not go as hot on the retails the ad after July 4th. I would have hoped my retailers would have planned to advertise every week in July and kept the momentum going. Our cherries were phenomenal with great taste and size. Our main competition for ad space was grapes, peaches, and berries.
Retailer pricing in July.
The week of July 5th the retailers that advertised under $3 included: Albertsons/Vons ran a $2.97 front page coupon, Raley’s $2.77lb, the main advertised price was $3.99lb. Ralphs, Bashas, H Mart, Save Mart, and Lucky were at this retail. Jon’s Marketplace was at $1.99lb and El Super .99(no logo, California product) leading the ethnic chains. Safeway Northern California was disappointing with a $4.99lb retail. Overall, there should have been additional retailers adverting and more aggressive retails.
The week of July 12th was an improved week over July 5th. Several retailers were under $3lb including Safeway Northern California $2.88lb, Harmons $2.77lb, H Mart $1.99lb, Stater Bros $2.99lb, Bashas $1.98lb, and Smart and Final $1.77lb. Ethnic chains that heated up their ads included Superior and Super King Markets at $1.49lb. El Super one-day sale at $0.99lb. Other ethnic chains were disappointing at higher retailers including California Cardenas at $2.99lb and Vallarta at $3.49lb. Mainstream retailers like Vons $4.99lb, Sprouts $3.98lb (organic) and Ralph at $3.99lb retail were too high with the amount of volume we had at the time.
The week of July 19th, retailers that advertised under $3.00lb included Vons $2.97lb coupon, Albertson Phoenix, $2,77lb, and Raleys at $1.97lb. Ethnic chains like El Super 2/$3.00, Superior Grocers $1.29lb, Jon’s Marketplace $1.49lb went hot and Vallarta and California Cardenas were under $3lb at $2.49lb. Conventional chains that were over $3.00 included Save Mart and Lucky at $3.99lb and Nugget Markets $5.99lb. Overall, there should have been more ads the week of July 19th.
The weeks of July 26th and August 2nd ad activity slowed down from previous weeks. Highlights included Save Mart and Lucky at $1.99lb, Safeway Northern California $2.88lb,H Mart $1.99lb, and Ralphs broke a front page $2.79lb coupon August 2nd ad. Hispanic retailers continued to push including Superior at $1.29lb, El Super $0.99lb one day specials and $1.29lb all week, and Jon’s Marketplace at $1.49lb. Vons and Stater Bros. had a $4.99lb high retail.

Midwest: In my immediate area in the DSM Metro, I believe there was a lot of California fruit on the shelf way past our start-up date. I would say that as we got going, for two weeks, ¾ of the stores I went into, were still carrying California fruit, while the others were selling new crop. In my opinion, the old California fruit was on its last leg, while the appearance of the new crop for the Northwest was much brighter looking.
I also think the packaging of some of our shippers is very eye appealing. I believe it could draw someone to the display that might otherwise walk past it.
Cherries being available for a short season, the demand more facings in the departments it huge. I understand some retailers such as Aldi’s for example have limited space, but too often when I was in some stores, the display would be empty and even heard customers looking for the fruit.
Pricing this year was interesting to say the least. Some retailers advertised at say $3.99lb while everyone around them would be at $1.99lb to $2.99lb. One retailer in Wisconsin that I visited was in ad at $3.99lb but shelf price was at $1.99lb. When I questioned them, his comment was they were getting hung and so was the warehouse. His opinion was everyone else was cheaper than they were, and they had to make a move.
The new customer, Woodman’s, was very aggressive. Upon my visit in July, he was in ad with both Sweets and Rainiers at $1.49lb and they were flying out of the store. He stated he was making some money on these at this price. Watch the customer traffic and people were doing more than one bag at a time. Display probably had 85 cases total on it.

South Central: When was the last time that California cherries went so far into July? Never. That is what we faced when the Northwest Cherry harvest began this summer (later than usual), and it made the start of the season different from any that we have previously experienced…ever. In a perfect world, California wraps up around the middle of June and then retailers can easily transition into Northwest supplies. Maybe that 2nd or even 3rd week sees some overlap between the two regions. But this year, fruit from both California and the Northwest was available for July 4th holiday ads and California fruit hung around much longer with some wholesalers and terminal markets seeing California cherries through mid-July if not a little longer. And by then the California fruit was beyond awful but it was cheap!

With the July 4th holiday falling on a Tuesday, many retailers had cherries in their June 28th (Wednesday) ads. And quite a few included the Northwest Cherry logo in them – either because they had committed to carry all Northwest cherries by then or because they would transition during that week from California to the Northwest. In fact, Dierberg’s in St. Louis had the Northwest Cherry logo in their 6/20 ad and might have been my first retailer to be in all Northwest supplies at that time. This 26-store high-end retailer advertised weekly with the last ad breaking on August 1st. His pricing ranged from $3.99 lb. and dropped as low as $1.84 lb. on July 25th before the 8/1 ad at $2.98lb.

Many retailers experienced deflated sales this summer due to retail deflation versus last year, but unit movement was way up. One retailer mentioned that cherries were “killing other produce items, especially grapes,” in July. The quality out of the Northwest was outstanding with great sizing and taste/flavor.

With such a condensed crop this summer, it was imperative that retailers “help out” during the supply peak when the industry needed to move the volume. While many skipped the July 5th ad week since they had run ads for July 4th, most returned with ads on July 12th. Northwest Cherry displays were large, fruit was big and firm, product was fresh and flavorful. Ad pricing this 7/12 week ranged from about $2.49 lb. up to $3.99 lb. but there were some retailers with cheaper ads and those were, no doubt, helping flush the remaining California cherries through the pipeline. Through the rest of July, there were some hot ads – such as Albertsons Southern Division (TX) at $1.87lb the week of 7/19, Dierberg’s the week of 7/25 at $1.84lb and Price Chopper in KC (buys through AWG) at $1.99lb the same 7/26 week.

Since there were so few Northwest ads in June, my region saw ads continue into August with many trying to get their August and shoulder ads this month. Price Chopper ran $2.99lb the week of 8/2 and $3.99lb the week of 8/9 while Brookshires’ Grocery (TX) did $2.99lb both weeks.

Rainiers were tough this summer as quality was less than ideal, and ads were infrequent. To help move the volume, I did see an Aldi ad ($4.99lb on 7/19) but only a few others such as Price Cutter (MO) at $7.99lb on 7/5 and Reasor’s (OK) at $5.98lb on 7/12. Schnucks (St. Louis) did promote Rainiers for two weeks in a row along with Red Cherries. On July 5th, red cherries were $2.99lb and Rainier’s were $4.99lb while on July 12th, red cherries were $2.49lb. and Rainiers were $3.99lb.

Every year I try to not only increase the ad count but also try to get more “bonus” verbiage in the ads, especially the health/messaging. I think it helped to increase the payout for this bonus. While ads (print and/or digital) are the foundation of our programs, I have seen where the “other” programs can help increase awareness and encourage sales. Opportunities in social media and digital marketing have become a profit center for retailers but they also offer us a way to reach the consumer when they are either purchasing groceries or building their baskets online. It is as close to the in-store shopping experience as possible.

This summer, I partnered with over 20 retailers in the social/digital area. I also ran 8 contests and these continue to be popular with high profile items such as Northwest Cherries. I have seen where retailers are learning how to offer digital coupons on random weight produce items (like Northwest Cherries) and while I did two this summer, I think we can take advantage of these more in the future. Especially at certain times of the season, and when they are well planned and well thought through, they can offer the perfect program. Other programs I ran included in-store radio, a text blast, magazine inclusion, in-store custom signage, demos, and RD outreach. While these “other” programs are more time-consuming, I think it is important we explore them and at least start conversations with our produce contacts to see what else their organizations offer. But, again, it all must start with the ad discussion.

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The United Supermarket group in TX was on ad at 2 lbs./$5 on 7/19 which I thought was an interesting and clever pricing.   Assume this was random weight versus clamshell.  It will be curious if we see more random weight pricing like this in the future.    

Northeast: Many seasons have a smooth transition from California to the Northwest, but that did not happen this year. In addition, both areas were late in starting.

The biggest opportunity during the entire season is typically Independence Day, and if you miss that opportunity, it is often difficult to recover those sales. In my district, there seemed to be plenty of fruit available for the 4th but much of it was end of season California product which often showed signs of decline. It was common to see cherries on display over the 4th
that had some shriveling, often accompanied by brown stems. It was easy to tell the stores with leftover California fruit from the ones that had Northwest without even looking at who the packer was.

Despite that confusing and inconsistent quality, virtually all my retailers maintained large, well-filled entrance displays, and some even had multiple displays. Once the California fruit was gone, there was a distinct difference in the overall quality at retail, and it was rare to find fruit that was not fresh, large, and firm, with flavor improving each week. Not all the displays were refrigerated, and the continuing good quality at retail suggested to me that the turnover was active, and shrink was minimal.

In addition to the support from nice displays, advertising support was also good. Because of the late start, the last week of June I only had 50% accounts on ad, but after that, for the entire month of July, except for the week after the 4th, more than 92% accounts ran ads each week, many on page 1. The week after the 4th of July, when retailers often take a break and run other items, 83% of my accounts were still advertising cherries. Then as we moved into the second week of August, 67% of accounts are still on ad. I was pleased to see that many of the retailers were advertising the health benefits of cherries in their ads. While some retailers would take an occasional week off, I did have 16 accounts (67%) who advertised every week in July. Those 16 included Food Town, Big Y, D’Agostino, Dave’s Marketplace, Food Bazaar, King’s, Geissler’s, Gristedes, Highland Park Markets, Price Chopper, Roche Bros, Shaw’s, Stew Leonard, Stop & Shop, Wakefern and Western Beef. A shout out to them for their continuing support. Throughout the month of July, the prices ranged generally from $1.99lb to $4.99lb, with most at either $2.99lb, or some $3.99lb. As we move into August, the retail prices are beginning to trend higher.

I was disappointed to see that some retailers did not have Rainier’s on display, and those that did often had product that was a little tired, some showing bruising and brown stems, both in bags and clams. Only occasionally did I see Rainier’s that were clean and bright. There was some advertising of Rainier’s, even as late as the last week of July, typically at $4.99lb or $5.99lb.

Southeast: The Southeast, like many other parts of the country, got off to a slower start penetrating the retail markets. Many if not ALL retail chains held onto the California Cherry crop longer than in several cases should have (quality issues). I attribute this to those accounts that utilize a wholesaler/distributor to be the case rather than those buying direct from shippers. They 4th of July weekend I found to be a variety of pricing in the Carolina’s. California both Red & Rainier cherries held on a bit too long which I attribute to wholesaler over supply of California held on too long and the quality showed.
The pricing early during the 4th of July was an unusual event as some of the chains (Food Lion, Harris Teeter, Earth Fare, The Fresh Market) were priced at $3.99lb while the competitive chains (Ingles, Publix) were priced appropriately at $2.99lb and even a distributor had pricing at $1.99lb price points in IGA’s, and Lowes Foods. Price point for Rainier Cherries ranged from $5.99lb to $7.99lb in the chains. The quality of the red cherries was solid with deep color as the Rainier were shiny yellow cherries eating and selling well.
The success of the “health” messaging bonus was well received for several accounts as they did their diligence to execute appropriately with the themed events as well. We tried a custom-made POS for Publix this season which was a “new” for the season and was well received by the stores to convey a “health” message and Buy Now – Freeze Now messaging. We also tried several alternative merchandising events with Food Lion, (digital execution) The Fresh Market (late season video /August timing) and Winn Dixie (Kiosk video and recipe health message print out).

Consumer Publicity Remains a Key Promotion Avenue for the Northwest Cherry Growers

Beyond the critical importance of retail-based advertising is
the realm of direct consumer outreach. 
Again in 2023, the team at Northwest Cherries was able to influence a
large swath of the North American audience to add Northwest Cherries to their
daily lives during both the winter and summer months.

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