March 8th marked the last day of the Vanguard Peru grape harvest. However one-third of the product from the season is still to arrive in the markets as our global team continues navigating a challenging supply chain.
Up to week eight, Peru has shipped 61.5M boxes of grapes. This is 10 percent more than last season year to date when Peru had shipped 55.7M boxes. The Peru season this year will likely hit 64M equivalent boxes, an increase over the initial forecast of 62.5M.
"This season was one of the best performing product seasons to date, in large part to the advancements our team undertook at the ranch," says Dirk Winkelmann with Vanguard. "Color, size, crunch and flavor were all on the premium level." Weather conditions were excellent. Quality and harvest conditions were very good. Moreover, California finished its 2021 season early and Chile started later, creating an excellent window globally.
The Peru season this year will likely hit 64M equivalent boxes, an increase over the initial forecast of 62.5M.
We are still seeing good demand for grapes in North America, but the markets have weakened substantially over the past two weeks in all markets, especially on red seedless and black seedless into North America. "Fortunately, we have a good portion of our later arrivals in program business that weathers the market. Green seedless, specifically the new IP varieties, continue earning good demand and are less susceptible to dramatic price drops," Winkelmann shared.
Yet, this has been the most challenging season ever faced by the industry. The Peruvian industry have been plagued by numerous logistical challenges and ever-increasing costs. The issues list is long: a lack of containers at critical moments, delays in vessel departures, extended transit times, port congestion, delayed releases, container discharges, lack of chassis and drivers.
The pandemic and resulting supply chain challenges have led the team to make significant advancements that set Vanguard up to be able to meet the expected delays strategically. At the field level there was a new horticultural approach, especially with the company's green varieties on how the placement of the bunches is managed. This was overhauled to ensure quality canopy coverage on bunches to avoid amber spots or sunburn.
"We engineered changes at the packinghouse to ensure that time in the storage and dispatch areas were reduced by five to seven days to get ahead of the lag time."
"The other key takeaway from this season is the improved relationship made with our Peru community," mentioned Winkelmann. "We lead with transparency from labor structure, how we pay, when we pay and follow in step with the appropriate local government laws. The position we have taken is to give an alternative voice to handle labor the right way. Our management team has been very involved with local labor leaders and authorities to address concerns and make improvements. We took an active role in local community relationships in general."