Adverse weather in certain growing regions during the early months of 2019 caused issues in produce departments, retailers noted in recent remarks on the first quarter.
Sprouts, in its earnings call May 2, noted that heavy rains in California led to availability challenges with a number of fresh produce items.
“We saw some pretty significant what I’d call hyperinflation in a number of products in the produce
categories that really restricted our ability to get our quantities at reasonable cost,” Bradley Lukow, interim co-CEO, chief financial officer and treasurer of Sprouts, said on the call. “And that also reduced our ability to promote, and therefore we had a little bit lower sales that we would’ve expected in produce as a result.
“As well, into the early parts of Q2, we’ve seen some continued weather from a rains perspective in California and some cold weather out of Mexico, which has had some negative impact on availability in a number of produce items,” Lukow said.
Jeff Cady, director of produce for Tops Friendly Markets, participated May 7 in a webinar on the latest FreshFacts on Retail report from the United Fresh Produce Association and discussed availability issues in the first quarter.
“It was a challenging Q1,” Cady said. “I think most of us were probably thinking it wasn’t going to be because last year we had the transportation issue hit us and this year we thought, oh wow, maybe it was going to be decent, but it just didn’t come to fruition.”
Lukow said on the Sprouts call that the winter months are typically where availability issues occur.
“The shoulder seasons, if you will, from sort of November through February are the most challenging to be able to predict because that time of the year a much more significant component of produce items are being sourced from offshore, outside of the U.S., and you can have a number of challenges, including tie-ups at borders,” Lukow said. “So it’s more a difficult period of time to try and predict ... But as we think through the summer months here, as I pointed out, looking like a better growing season certainly on the fruit side of the business in produce.”
Matt Lally, associate director of Nielsen Fresh, who provided analysis of first-quarter data on United’s FreshFacts on Retail webinar, noted that certain items, like strawberries and cauliflower, saw growth in frozen during the first few months of the year.
Cady wasn’t surprised given the difficulty keeping fresh options available.
“We were chasing strawberries for the first part of the quarter for sure, and to see frozen up, to me, yeah, I could have called that because we were struggling to stay in stock and the inability to promote because of the poor weather conditions in the growing was definitely an issue,” Cady said.
“If you don’t have it fresh, they go to frozen,” Cady said.