In this installment of the ‘Agronometrics In Interviews’ series, Sarah Ilyas studies the state of the Mexican Blueberry season in an exclusive interview with Carlos Madariaga, Chief Commercial Officer at Berries Paradise. The series is based on interviews with esteemed professionals from the industry, focusing on a specific origin or topic visualizing the market factors that are driving change.

What characteristics set Mexican Blueberries Apart? 

The confluence of favorable conditions contributes significantly to the production of high-quality fruit in Mexico. For example, consider Peru's cultivation of the Biloxi variety. The distinctiveness of Peruvian Biloxi in terms of flavor, when compared to its Mexican counterpart, can be attributed not to a lack of horticultural expertise, but primarily to climatic factors, notably weather conditions. The flavor profile and overall quality from some origins stand in stark contrast to Mexico, a divergence that can be traced back to the intricacies of microclimates influenced by altitude and latitude. Mexico’s reputation for producing superior fruit is acknowledged globally.

Mexico's allure in the agricultural sector stems from its geographical proximity to key markets, particularly North America. This strategic advantage becomes especially pronounced when considering the swift transportation of fruit. The quick shipment of fruit within a span of one to five days ensures widespread distribution across the United States and Canada, establishing a substantial edge over other origins, notably South America. This quick delivery timeline stands as one of the main advantages that the Mexican market holds over its counterparts.

What are some of the advantages enjoyed by the industry that enable Mexico to be a top exporter of this fruit? 

Our main focus is on delivering top-notch fruit. This is especially crucial during the shift from winter to spring when the availability of fruit is a bit limited. Mexico plays a key role in addressing this gap by ensuring a steady supply of berries to the North American market.

Our geographical proximity gives us an edge, allowing us to quickly get our produce to these markets. Even some countries in Asia or Europe can be reached within 20 days by vessel; we can also reach several destinations worldwide by air with a 1 to 2 days difference.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

How is the current season coming along compared to last year? Is production pushed back due to the recent hurricanes? 

In the context of recent agricultural developments in Mexico, there have been noticeable fluctuations, particularly in the past four seasons. The pace of growth has experienced a slowdown over the last couple of years, with the projected annual growth for Mexico ranging between 5% to 10%. In the ongoing 2023/24 season, Central Mexico has encountered no significant impediments so far that could potentially disrupt the later stages of the season. Although Sinaloa faced challenges earlier in the year, Central Mexico, constituting approximately two-thirds of the national crop, is currently operating under typical conditions.

In the preceding season, the country successfully shipped around 80,000 tons. Looking ahead and assuming a sustained growth rate of 10%, the export figures for the upcoming seasons could potentially range between 88,000 and 90,000 tons. It's crucial to emphasize that these projections specifically pertain to export quantities and not the overall production output.

What are some of the challenges being faced by the industry?

Climate change is a big challenge. Additionally, rising costs are impacting various facets of crop cultivation. Labor expenses have surged, mirroring an overarching trend that includes the increased costs of essential components for a successful harvest—plastics, tunnels, herbicides, pesticides, and nutrients.

The lack of labor is also a challenge. The concept of "near-shoring" has gained prominence in the post-COVID era. The challenges faced by economic giants such as the US and China have prompted numerous companies to redirect their investments towards Mexico. This shift is transforming Mexico's role from merely an agricultural player to a significant manufacturing force, thereby reshaping its economic landscape.

However, this transformation is not without consequences. The allure of urban life is enticing newer generations away from rural settings towards major cities. This shift challenges the agricultural industry to redefine its attractiveness, aiming to retain and encourage individuals to stay rooted in their hometowns and engaged in farming practices. Balancing urbanization trends with the preservation of rural traditions becomes a pivotal consideration for the industry's sustained growth and vitality.

How will the season develop? Are there any regions being planted that will change the production curve? 

There are currently numerous areas where new plantations are being established, though the predominant contributors continue to be Jalisco, Sinaloa, and Michoacán. While there are indeed plantations in states like Guanajuato, Puebla, and Baja, the majority of the production occurs in Jalisco, Sinaloa, and Michoacán. In terms of varietal compositions, a discernible shift is underway in Mexico. Traditional or older varieties, such as Biloxi, are gradually diminishing in prevalence.

Mexico is pivoting away from these conventional choices and progressively embracing premium varieties, exemplified by the popularity of Sekoya, among other proprietary programs. The conventional varieties are witnessing reduced viability, potentially due to escalating costs and inflationary pressures, rendering them less economically viable. In response to these dynamics, efforts are underway to diversify strategies. One such approach involves enhancing yields from a cultivation standpoint. Concerted efforts are also underway to introduce superior genetics and elevate the overall eating experience for consumers. 

How is what’s happening in Peru affecting Mexico’s season? 

In previous years, Mexico had a designated timeframe known as the "early window," spanning from September to December. However, the substantial surge in growth from Peru diminished the appeal of this window. Consequently, cultivation during this period lost favor, prompting a shift of the majority of production to the spring, aligning with Mexico's natural growing season.

Unexpectedly, Peru encountered an El Niño year, resulting in a remarkable 40% decline in volumes compared to the previous season. This anomaly led to unprecedented pricing in September and October, a phenomenon unseen for nearly a decade. The continuity of such pricing in the upcoming season remains uncertain; it is contingent on variables beyond our control.

In the event of a similar situation, stakeholders may consider proactive measures, such as increased planting in Mexico during the early window or exploring alternative origins, potentially influencing adjustments to store advertisements. However, it's crucial to note that Mexico is exercising caution in making a drastic shift towards increased planting during that particular window. The rationale stems from the understanding that if Peru experiences a regular season, such a shift may not be economically viable for Mexico.

For context, Mexico's production curve closely aligns with Peru's, allowing for nearly year-round cultivation. If we divide Mexico's production into two semesters, the second semester contributes 20% to the total crop, while the remaining 80% is produced between January and June. Although the impact of the aforementioned situation benefited a few growers during the second semester, it did not reflect Mexico's overall annual production.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

What efforts are being carried out to increase varietal diversification? 

It has been a well-grounded realization for us as Berries Paradise, that the future trajectory of the blueberry industry pivots significantly on advancements in genetics. This realization has been prevalent in our strategic outlook for some years already.

Despite Berries Paradise not maintaining an independent genetics program, its modus operandi is characterized by close and robust collaboration with distinguished breeders, including prominent entities such as Sekoya and Fall Creek. Every new plantation undertaken by our company meticulously integrates premium varieties. This selection is underpinned by a comprehensive validation process, encompassing not only field-level performance but also an evaluation of market dynamics.

These chosen varieties exhibit demonstrable merits, such as robust transportability and exceptional taste profiles.

This, in turn, has catalyzed an increase in consumption at the market level. It is our collective understanding that enterprises adhering to conventional or standard varieties may encounter challenges in the foreseeable future. The evolving market landscape may not afford favorable opportunities for the introduction of conventional varieties, potentially placing their market presence at risk.

What are some efforts being carried out to boost local consumption? 

A decade ago, the landscape for berries was markedly different. Berries were not even amongst the top ten commodities in the produce sector. Significant endeavors have since been undertaken, both by retailers and Berries Paradise, to stimulate consumption. Our company, in particular, has implemented a spectrum of marketing strategies aimed at the development of the category.

This includes the establishment of robust partnerships with major retailers who recognize the pivotal role of introducing unique offerings to the market in bolstering sales, fostering category growth, with berries emerging as a particularly enticing commodity.

Berries Paradise has introduced diverse packaging and an array of appealing products designed to captivate and attract new consumers. The post-COVID landscape has witnessed an increased awareness concerning health, and the inherent health benefits of berries have become more pronounced. While the per capita consumption of berries in Mexico continues to lag significantly behind that of the United States, the consistent double-digit growth observed annually is indicative of a positive trajectory.

There exists scope for further development within the Mexican market. A hopeful prospect is that an increased awareness among retailers regarding the potential of berries, coupled with augmented efforts to foster category growth, will contribute to the continued expansion of the berry market in Mexico.

What future do you visualize for the industry? What are some of the goals that the industry is currently working towards achieving? 

Post-COVID, there's a noticeable uptick in people recognizing the myriad benefits of berries, fueling continued growth in the category. Undoubtedly, there's work to be done to ensure this growth is sustainable. A crucial aspect, in my opinion, is a shift towards prioritizing genetics and a focus on delivering quality fruit consistently throughout the year rather than just flooding the market with any kind of produce.

What's important is making berries more than just an occasional purchase – we want to turn them into a regular habit for consumers. Encouraging people to pick up a fresh batch every week when they hit the grocery store is something we, as an industry, need to collectively work on. It's a shared responsibility to ensure we foster growth in a way that's not just about numbers but also about sustainability and lasting consumer habits.

How does Berries Paradise differentiate itself in the industry? 

A key objective for our team is the establishment of year-round supply with outstanding fruit, an ambition we've been actively pursuing for the past few years. This involves diversifying our product offerings to cater to a wide range of consumer preferences. Looking ahead into the medium to long-term future, we envision expanding our cultivation beyond Mexico, aiming to become a 52-week supplier across various regions and markets.

To support this strategic vision, substantial investments are being made in cutting-edge technology. This technology infusion is designed to enhance operational efficiency, with a particular emphasis on adopting automated processes to streamline our operations. Our emphasis on technology is integral to our growth strategy. We believe that automating processes is a key factor in achieving and sustaining efficiency.

Additionally, our forward-looking approach extends beyond operational considerations; we are committed to bringing products to market that are not only environmentally sustainable but also resonate with the evolving preferences and values of consumers. This dual commitment underscores our dedication to responsible practices that benefit both the environment and our valued consumers.

The Mexican Blueberry Industry is a big proponent of environmental and social responsibility programs. Can you give me some examples that show the industry’s green focus?

As Berries Paradise, we've embraced various organic techniques in our conventional crop management to significantly diminish the reliance on pesticides and herbicides. The application of these techniques is a deliberate effort to foster a positive impact on the soil. Simultaneously, our company is actively engaged in a substantial transition towards greener technologies. This includes the widespread installation of solar panels across all our cooler facilities, a strategic move aimed at reducing our dependence on conventional electricity generation.

The incorporation of solar panels serves as a means to power all our facilities sustainably. Moreover, we are taking proactive measures by urging our suppliers to certify that clamshells and packaging materials originate from recycled sources. This commitment ensures that the plastics utilized have a history of use and can be repurposed, contributing to a more environmentally friendly packaging practice. In addition to these efforts, our sustainable practices extend to the meticulous use of drip irrigation, ensuring that every drop of water is applied with precision, eliminating any wastage.

In our ‘Interviews’ series, we work to tell impactful stories by collaborating with leaders in the industry. Feel free to take a look at the other articles by clicking here.

All pricing for domestic US produce represents the spot market at Shipping Point (i.e. packing house/climate controlled warehouse, etc.). For imported fruit, the pricing data represents the spot market at Port of Entry.You can keep track of the markets daily through Agronometrics, a data visualization tool built to help the industry make sense of the huge amounts of data that professionals need to access to make informed decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily access these same graphs, or explore the other 21 commodities we currently track.