Organic Strawberries Gain Market Share

Organic strawberry acreage in California has risen to more than 13 percent of total strawberry acreage, which is a notable gain in percentage over the last two years, even as the total organic acreage has remained fairly constant.

The California strawberry crop is a bit of an anomaly as the acreage continues to decline but production is on the rise as newer varieties produce significantly more trays per acre than older varieties. And of course, weather is always a huge factor as it materially affects production numbers on a year to year basis. Nonetheless, the numbers are revealing even on a stand-alone basis.

In 2017, there were 4,166 acres of organic strawberries in California against a total acreage figure of 36,387. Organic acreage represented 11.5 percent of the total, while organic production at 16.7 million trays represented only 8.1 percent of the 206 million trays that California sold.  In 2018, there were 4,276 acres of organic strawberries, which represented 12.6 percent of the total devoted to organic strawberries.  The 21.9 million trays of organic strawberries represented 9.8 percent of production. 

So while total production grew by 9 percent, organic strawberry production jumped 31 percent and, in the same time frame, conventional strawberry production only increased by 7 percent.  The yield numbers were also striking as in 2017, the average acre yielded about 4,000 trays of organic strawberries with the yield per acre jumping to more than 5,100 trays per acre for 2018.

With that as the backdrop, the California strawberry industry enters the 2019 season with about the same organic acreage as 2017 but with the expectation that yields will continue to increase and so total organic volume will be greater than the last two years, barring an unusual high level of weather interruptions.

During the last two years, organic strawberry production has been fairly scarce in the January to March time frame with volume ramping up significantly in April and being heavy and very consistent from May through August. In 2018, weekly volume of organic strawberries never topped the one million tray mark but it breached 900,000 trays several times and was consistently over 800,000 during that time period.  In fact, from mid-May to mid-September, organic strawberry production never dropped below 700,000 trays on a weekly basis and the f.o.b. price was typically below $10, allowing for ad promotion pricing.

Shippers are again noting that organic strawberry supplies will be tight until at least late March. Bob Rigor of Colleen Strawberries in Watsonville, an organic berry specialist, said in late January that there were few organic strawberries on the market and February would also be very tight. He said late March could offer some relief but predicted that it would be later in the spring before there was promotable volume for the organic strawberries.

He acknowledged that there was an oversupply of organic strawberries in the peak of the season last year, which resulted in the f.o.b. price dropping precipitously.  But Rigor said the demand for organic fruits and vegetables continues to increase so his firm has increased its organic acreage for 2019 to specifically take care of their own customers’ needs.

Cindy Jewel, California Giant Berry Farms

Cindy Jewel of California Giant Berry Farms noted that organic strawberries and all organic berries are creating a conundrum. She said it is very important for larger shippers such as Cal Giant to offer organics as a choice to their customers.  But she said the extra cost involved in producing organic berries is real and the necessary premium wasn’t there last summer.  Jewell said retail data shows that organic consumers will pay about a 20 percent premium but when the price climbs above that, sales drop.

Paul Kawamura, GEM-Pack Berries

Paul Kawamura of GEM-Pack Berries, Irvine, CA, noted the difficult decision facing growers looking at transitioning to organic strawberries.  He said the demand is climbing and from the November through March time frame there simply are not enough organic strawberries to cover demand and the market skyrockets.  But during the summer of 2018, supplies exceeded demand and he said there were times that the organic f.o.b. price was below the price for conventional strawberries.  “It was feast or famine,” he said, adding that last year, he believes production got out in front of demand without sufficient retail promotions in place.  He is hoping for better coordination this year between shippers and retailers.

The California Strawberry Commission’s website reveals that the average f.o.b. price for organic strawberries in 2018 was $11.37 per tray compared to the average price for conventional berries, which was $8.95.  While that represents a 27 percent premium over the course of the year, during the heavy shipping periods of last summer, the premium was typically closer to 10 percent, and some weeks there was no premium at all.