BY NEIL MURRAY
Friday August 31 2007
WITH just a few weeks to go before the US cranberry harvest begins, the Ocean Spray Growers Co-operative, the largest cranberry producer, has warned that supplies of raw material will be tight over the foreseeable future.
This backs up an earlier warning, at the FOODNEWS Juice Latin America conference in Sao Paulo, that a shortage was looming (FOODNEWS 18 May). The unfolding situation is being driven by a healthy escalation in sales from markets around the world, with the biggest impact from the US domestic market, as consumers increase their demand for the health benefits, taste and refreshment offered by cranberry products.
This position reflects that seen for many other fruits and nuts whose global demand is soaring, but whose supplies may sometimes fall short.
"Demand for cranberries has never been higher, driven by the growing awareness of taste and the many health benefits associated with the fruit. The success of Ocean Spray's marketing campaign in the US has created 8% base volume growth and this is being reflected elsewhere as the brand's position is being developed," said Jamie Robinson, commercial director of Ocean Spray International Services UK.
He told FOODNEWS that supply into the US market grew to 7.9 million barrels in 2006, compared with 7.2 million barrels in the previous year. US production is estimated at around 6.8 million barrels, and the rest of the supply is mostly accounted for by imports from Chile.
Ocean Spray will not be drawn yet on prospects for the 2007 crop, but warns that recent hailstorms have definitely damaged the fruit."So there is only a slim chance for a large crop," warned Robinson. In addition, last year's crop was a record, and the natural crop cycle means that this year's harvest is bound to be smaller.
The rising popularity of Ocean Spray's 'craisins', sweetened dried cranberries (or SDCs), means that an increasing volume of cranberries is also being used for dried fruit production rather than juice and juice drinks.
Originally, cranberries were almost all processed into sauce and eaten by Americans on Thanksgiving Day. Now, more than 90% of the fruit is processed into juice, and in the next few years the market will be split between juice and SDCs."The demand is for craisins, and it is constraining the supply for juice," confirmed Robinson. A buyer in the UK confirmed that more fruit has been going for SDCs.
The fresh market takes about 5% of the fruit supply, and is relatively stable.
US cranberry sales in the September 2006-April 2007 period (the most recent for which figures are available) have risen to 4.4 million barrels, compared with 3.7 million barrels for the same period a year previously.
European demand in the year to April 2007 has, on the other hand, been relatively flat, but is now growing, especially in France. Again, the perceived health benefits of cranberries are responsible for this.
Ocean Spray will not be drawn on the cost of new crop cranberry concentrate. The present spot market price is around US$50/gallon, roughly equivalent to US$10 500/ tonne. Earlier this year, the spot price was nearer US$42/gallon.
"The price to manufacturers will go up; no question," warned Robinson.
He added: "Despite this shortage, we want to reassure our customers that the Ocean Spray Growers are committed to providing Ocean Spray supplied products for the UK.
We are, however, competing with other markets and customers to secure continuous supply."
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