Historically high prices

Mixed reports on foodservice lettuce demand

Movement on foodservice lettuce continues to be a mixed bag.

“Some segments, particularly the quick-service restaurants and fast casual segment, were heavily take out and drive through which have done well through this period,” says Mark Vaughan of Santa Maria, CA-based Fresh Avenue. “We have some customers running right at expectations and a few customers running ahead in this segment.”

At the same time, fine and casual dining restaurants that relied heavily on indoor seating continue to report mixed demand. “Some are off by 50 percent while others are off by 20 percent and some have closed locations,” says Vaughan.

Photo: Fresh Avenue

Workplace-related restaurants
He notes that a segment of the business that has been hit particularly hard are restaurants serving office building or other highly concentrated work sites. “We don’t know what the work world will look like. The world has learned to work remotely and many companies have re-assessed their commitment to having their team 100 percent in office every day,” says Vaughan. “Restaurants that rely on those highly concentrated office workers are going to be impacted, perhaps permanently.”

At the same time, supplies of lettuce are currently slim. “We’re in a tight market and right now it’s being driven by an uptick in demand along with very unfavorable weather conditions in California,” says Vaughan. “We’ve had all that heat and it’s caused a significant amount of stress on those plants. The yields and the quality are at a low point while overall demand has picked up.”

And while early into the pandemic there was talk of plantings being curtailed significantly, that hasn’t been the case recently. “There have been some shortages and constraints but today though, there’s much more of a variable viewpoint of what to plant. Most growers are a little bit more upbeat and have increased their plantings looking toward the start of the Yuma district and early 2021,” he says. He says while growers are more optimistic, it’s a realistic optimism that sees the industry looking forward to more stable demand.

Photo: Fresh Avenue

Spike in pricing
As for pricing on lettuces, it’s hitting historic highs. “Romaine is over $40, iceberg is around $30, green cabbage--which is typically $4-$5 is around $17, and spinach is nearly $20,” says Vaughan. “These are extraordinarily elevated markets and most people that I talk to are looking at elevated markets all the way to the holidays.”

Adding to that strong market are challenges in new growing districts. “I’m not sure Yuma will get off to that strong of a start. They’ve had extra hot weather—hotter than normal,” says Vaughan. “Salinas will finish early. And for most of my early years in business, we would jump to Huron, CA. There are very few people over there who are in the lettuce business and it was a good call this year to be there. But fewer and fewer companies make the Huron district part of their plan.”

For more information:
Mark Vaughan
Fresh Avenue
Tel: + 1-888-FRESH40
mark.vaughan@freshavenue.com 
www.freshavenue.com


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