Quality Key to Blueberry Market Growth

With world blueberry production essentially doubling since 2014 and no shortage of product in the “shoulder markets,” blueberry buyers are focusing on quality like never before, according to executives of Fall Creek Farm and Nursery in Lowell, Oregon.

Dave Brazelton and Amelie Aust of Fall Creek Farm and Nursery deliver a presentation on the world market outlook for blueberries at the 2020 Oregon Blueberry Conference.

“So much of the focus (in the past), especially in the Southern Hemisphere, was on filling a window,” said Amelie Aust, co-chief operating officer for Fall Creek. “If you had the product, it had a home.”

Today, she said, that is no longer the case.

“When you talk to retailers, there is a much lower tolerance for poor quality,” said Dave Brazelton, executive chairman of Fall Creek’s Board of Directors and father to Aust, who joined his daughter in presenting the Global Blueberry Production Update report to participants in the 2020 Oregon Blueberry Conference.

“As consumers are becoming more familiar with the quality that blueberries can achieve, buyers are becoming more sophisticated,” Aust said. “And there is just more product.

“This trend moving forward will be ever more present,” Aust added. “Quality will have a bigger impact on our pricing, and also what kind of home our fruit can get.

“Even a few years ago,” Aust said, “there were weeks where there were almost no blueberries, so there was still this chasing of these supply windows. That is largely going away, and the beautiful thing is we have fruit 52 weeks. There are peaks and valleys, and there are opportunities within those peaks and valleys, but we are moving into a phase of 52 weeks of blueberry consumption.”

Several occurrences have combined to drive the increase in blueberry supplies, Brazelton said, including an increase in production in most major production areas.

“Mexico has grown significantly, as has the U.S. and Canada,” Brazelton said, “and especially Peru. With new data that came in last week, Peru this year surpassed Chile as the largest exporter of blueberries in the world.”

Production in Europe, the Middle East and Africa also has increased, Aust said. “All of those regions are expanding as European consumption increases,” she said.

“People are eating a lot of blueberries,” Brazelton said. “And it is a profitable crop in most areas.”

In presenting different trends, the Fall Creek executives noted that as recently as four years ago, the U.S. and Canada produced about 50 percent of global production. Today, that is around 40 percent, and falling.

“This doesn’t mean that the U.S. and Canada are producing less,” Aust said. “It has actually grown. But global volume is doubling.

“Our sense is that years from now, it could be about one-fourth U.S. and Canada; one-fourth South America; one-fourth Asia; and one-fourth Europe and surrounding regions, including Africa,” Aust said.

Total worldwide production last year, according to the most recent International Blueberry Organization report, was somewhere between 1.8 billion and 2 billion pounds, Brazelton said, up substantially from the previous year. Much of the increase was driven by a record U.S. crop of 870 million pounds as several areas bounced back from poor crops in 2018.

Georgia, for example, increased from around 50 million pounds in 2018 to 98 million pounds in 2019. California and Michigan also had large crops, producing 73 million and 91.5 million pounds respectively. Oregon was up more than 20 million pounds to 152 million in 2019. Washington production also was up more than 20 million pounds, hitting 155 million pounds in 2019, as was British Columbia production, which grew to 190 million in 2019.

“Put all of these together and we came back in a big way in the U.S. and Canada,” Brazelton said.

Overall, U.S. and Canada highbush blueberry production increased 27 percent, going from 686 million pounds in 2018 to last year’s record production, according to the IBO report.

Among future trends Aust and Brazelton identified opportunities in new packaging and in delivering premium product.

“Markets are segregating,” Aust said, “with different pack sizes and products where different quality berries are going.”

“Two of our largest sellers in the U.S. and Canada have introduced a premium grade,” Brazelton said. “And we are hearing that it is going really well. Consumers will pay extra if they have confidence that it is a particularly high-quality berry.”

Other trends they identified are the development of new horticultural systems, including substrates, that are changing where blueberries can be produced. Also, Brazelton said, genetics is becoming more important. And, he said, outside capital is increasingly attracted to blueberries.

“This is not just short-duration private equity, where they are in for five or seven years and then out,” Brazelton said. “This is longer term, such as pension funds, where they are looking for agricultural investments.”