EL NINO CONTINUES TO TEST RETAIL PRODUCE MANAGERS THIS SPRING

MINA WILLIAMS

Retail produce merchandisers had a rough Easter, and the rest of spring is likely to keep them bobbing and weaving as their reflexes are tested in this El Nino-ravaged, highly volatile market.

With typical heavily promoted spring favorites -- including strawberries, row crops, asparagus and artichokes -- in short supply or exhibiting sporadic quality, retailers told SN they are becoming quite nimble at dodging bullets and shifting their merchandising and promotion strategies.

A recent survey of retail ads between the end of March and mid-April showed that potatoes, oranges, cantaloupes, mangoes and floral items are bulking out produce promotions.

Secondary options such as mushrooms and navel oranges are finding their way into this spring's advertisements, too. Offshore items, including melons and grapes, available at promotable pricing, are being pressed into action this spring, retailers reported. In addition to the usual supply countries, new markets are opening up because of the easing of trade restrictions.

"Anytime there are disruptive weather patterns, marketing plans are interfered with," said Bruce Peterson, vice president produce merchandising at Wal-Mart, Bentonville, Ark. "This year has been difficult. The Easter holiday wasn't shot, but is was a difficult time. I can't pick a year when nature hasn't impacted crops. You just deal with it. When weather crosses you up, you have a contingency plan."

"What we have to do is adapt to the market," said Todd Mudger, senior produce buyer at Ingles Markets, Black Mountain, N.C. "We pick and choose our promotions wisely. Strawberries are tight.

"We elected to stay with Florida crops through Easter. We are trying to keep the same mix and work through it, and we are continuing to order. When we cannot offer items because of supply or poor quality, our customers don't like it, but we try to explain that the overall commodity has had quality problems," Mudger said.

"Growers couldn't get into the fields for five days in April," said Jim Gordon, director of produce at Minyard Food Stores, Coppell, Texas. "We had to hustle to get enough supply, but we like to run strawberries through Easter week." Gordon reported that Minyard also featured watermelon to fill the gap.

"Produce is a global business. We are looking at growers from South Africa now," Gordon added.

At Ingles, mid-April promotions featured sweet corn and value-added salad mix. "Florida (corn) has taken a turn this week, but we are out in front of it and we have not experienced any shortages in salad mix," said Mudger.

He looks to potatoes and Vidalia onions to come in with enough volume to provide promotional fodder in the next few weeks. Idaho and Colorado potatoes, in 10- or 15-pound bags, are beginning to pop up at promotable prices, he said.

This spring's sketchy product availability has put many retailers' promotions into a week-by-week, almost day-to-day, cycle.

"It is tougher to put together a plan," said Larry Vollink, general manager at Heeren Bros., a Grand Rapids, Mich.-based produce wholesaler. "Strawberries may be in the ads, but the supply can catch us."

Vollink indicated that corn and asparagus are good, with the market up but not out of reach for the latter. "Everybody is waiting for spring crops."

Prepackaged salads are starting to show some weakness in supply, as consumers shift from whole head to value-added. One packer reportedly is not accepting any more ads, and more such situations are expected to follow as head lettuce supplies become tight.

At store level, retailers are having to make adjustments, almost daily, as short supplies reduce stand sizes.

As an everyday low-price operator, Wal-Mart is not forced to project out specials for advertising, Peterson told SN. However, he did note that less-than abundant selection and shifts in field-packed items are prompting his departments to make frequent rack adjustments.

He indicated that with berries in particular, some packers are reluctant to put the crop up in a clam-shell package. Also because inventories are being kept closer, turns are faster.

"In times like these, you just manage the best way you can," said Peterson. "You make adjustments. This is where building solid relationships pays off," he said. "In every case our suppliers have made sure that our customers are getting the best product possible, at a reasonable cost."

Ever the optimists, produce merchandisers also voiced eager anticipation over summer fruits, to help add sparkle to departments stricken by a bleak spring.

Peaches, plums, pears and nectarines may come along just in time for June produce promotions.

Growers said El Nino is to blame for the havoc with crops coming to market. Storms have been keeping mature crops from being harvested, particularly strawberry and row crops, and hampering grower's planting efforts, as well. The inability to maintain production within the plant's life cycle has created short and sporadic supply situations with inconsistent quality, not to mention higher prices.

Growers reported that the largest market impact is just now being felt at retail, as California begins to dry out and weather-forced planting suspensions are lifted within primary growing regions.

The short supply situation is expected to push prices higher, particularly through early May, growers said. While the gapping in the fields is narrowed, expectations are that the situation will continue into June.