Organic Citrus Offers Plenty of Promotional Opportunities

The citrus category is a bit different than most commodities as virtually all groves produce a wide range of sizes as well as marketable volume of both number-one- and number-two-sized fruit. 

For the conventional sector, foodservice offers a great outlet, but that is not a very viable option for organic production as the foodservice price structure typically cannot pay the necessary organic premium. Hence, there are often promotable organic citrus options for the retail trade.

Craig Morris, Citrus Category Manager, Homegrown Organic Farms

“It is the number twos and bookend sizes where we can offer the best promotional opportunities on organic citrus,” said Craig Morris, citrus category manager for Homegrown Organic Farms, Porterville, CA.

The California organic lemon crop has been in production for a couple of weeks, with Homegrown starting to pick its organic navel crop this week. Morris said the navel crop came on quickly so “we’ve started off with a bang and have already optimized our shipments. We will be in peak production from now until at least the end of April.”

Morris said Homegrown’s organic navel crop is down 15-20 percent this year, so he can’t promise the fruit will last into May as it typically does. “History says we will go into at least the first couple of weeks of May, but it just depends how well the crop sells and how it sizes and grades out,” he said.

Homegrown Organic Farms' organic navel oranges

“We’ve started off with a bang and have already optimized our shipments. We will be in peak production from now until at least the end of April.” -Craig Morris

While there is always great retail demand for the number one fruit, Morris noted that organic citrus always does well in the value-added bag category, and this year there has been an uptick in demand for bagged fruit of all commodities largely because of the coronavirus. He expects that same increase in demand to impact the fall organic citrus category.

Besides navel oranges and lemons, Homegrown will offer many other organic citrus items, including several varieties of mandarins, pomelos, cara cara oranges, and blood oranges. Morris said the one-stop shop concept is an excellent sales point for the organic citrus category. He noted that Homegrown will have an outstanding satsuma mandarin crop through November, but its clementine groves underproduced this year, which will impact mandarin supplies until Murcotts take over in early 2021.

Alex Teague, Senior Vice President/COO, Limoneira

Alex Teague, senior vice president/COO of Limoneira, Santa Paula, CA, said supply and demand of organic lemons are currently in balance, which should offer promotional opportunities for retailers into the spring of next year. He said the foodservice industry takes about two-thirds of the conventional fresh lemon crop as it is a bar and restaurant favorite. The coronavirus pandemic and its resulting limitations on the foodservice sector, however, have taken a big bite out of normal lemon sales. Teague said the retail sector has upped its game, more than doubling its purchases with 70 percent of that increase coming with bagged lemons.

Organic lemons have not been a huge seller in foodservice, but nonetheless the drop in overall demand impacted movement. Teague indicated that lemon supplies are typically tight in late spring and summer and more plentiful in fall and winter. Currently, the organic lemon f.o.b. price is about 30-percent greater than the conventional market, though that premium can be triple that during the summer months.

The coronavirus pandemic and its resulting limitations on the foodservice sector, however, have taken a big bite out of normal lemon sales.

Teague said the lack of an alternative market for their number twos and off-size fruit is a real issue for organic lemon producers and has caused some of them to transition their groves back to conventional production. “The retail niche for organic lemons is in the 95, 115, and 140 sizes,” he said. “It’s a problem what to do with the rest of the fruit.” 

Limoneira organic lemons

As mentioned, a tree produces a full range of sizes and quality, with the number twos often going to foodservice. “But not too many people come into a bar and ask for an organic lemon in their martini,” he quipped.

As a result, the Limoneira executive said some organic lemons are sold into foodservice without the organic designation.

Limoneira also carries organic navel oranges as well as conventional lemons and oranges. Echoing the comments of Morris, Teague said it is a great help to have several citrus options to fill their customers' needs.

Nelly Czajkowski, Sales Manager, Morning Kiss Organic

Morning Kiss Organic in Chelsea, MA, was also kicking of its fall organic citrus season this week with the arrival of navel oranges from California. Sales Manager Nelly Czajkowski said the company is expecting a good crop of California oranges and specialty citrus, but reports are that the total navel crop could be about 5 percent less than last season. She noted that the 2019/20 season featured very good supplies, so the slight drop this year is not a big concern.

Czajkowski said the early fruit is running toward the smaller end of the spectrum, peaking between 88s and 113s. The Morning Kiss sales executive said there should be promotable supplies of organic navel oranges with the smaller sizes perfect for bagging promotions. She added that bagged fruit of all commodities has been very popular since the pandemic hit as shoppers apparently want to buy product that is not being touched by other shoppers at the supermarket. 

Morning Kiss Organic navel oranges

Czajkowski said the opening f.o.b. price on organic navels range from the high $30s to the low $40s. She said this is in line with expectations and should drop a bit as volume increases.

Morning Kiss has increased its organic specialty citrus volume in the past couple of years, and the company is anticipating a very good crop of mandarins with satsumas kicking off California’s production. “We hear they are getting some cooler nights in California, which will help the satsumas color up. We expect that California will start shipping next week,” she said earlier this week.

Czajkowski said the firm’s mandarin program is “pretty robust” and should offer promotional opportunities on the satsumas this fall and on the other organic mandarin varieties, including murcotts, later in the season. Also, in Morning Kiss’s organic citrus lineup are limes and lemons. Both of those items are currently being sourced from Mexico, with organic lemons expected to shift to California by the end of November. She said organic limes will continue to come from Mexico with strong supplies currently allowing for promotional opportunities and the fruit peaking on 200s to 230s.