US Grape Guide

Market Penetration Strategy

How is the Korean market for importing US grapes?

US grape volumes to Korea increase in mid-October as this is when the fruit has tariff free access to the market. Korea implements tariffs from May 1st to October 15th when domestic product is available. 

Production Supply Chain

How is the production trend of US grapes?

The world's fresh table grape production is to rise by 1.2 to 27.4 million in 2022-23, according to a recent USDA report. This represents a 7% increase year-on-year.

For the 2022/23 season, US table grape production is forecast to increase by 24 thousand mt to 850 thousand mt after three consecutive years of reduced output. The increased forecast would represent only a slight recovery of grape production in the US as droughts and frosts will hinder a most robust recovery. Californian grape growers will continue to face labor and water availability issues, which were key factors for the 2021/22 season production decrease. Besides water and labor issues, California witnessed a turbulent growing season in 2022 owing to intense heat, which led to challenging growing conditions and higher input prices, leading to lower profits.

How is the Value Supply Chain formed in the US Grape Market?

Contracted small farmers -> Export firms (with packaging facility and local logistics)-> export

• Individual farmers tend to just focus on farming and let individual exporters or trading firms take care of exports.
  
• The contract doesn’t have to be exclusive. Some farmers would leave a portion of their supply for other exporters or the domestic market
  

Export firm (with own farms, packing facility, and logistics) -> export

• The export firm may still have contractual farmers on top of their own farms. It may also buy spot deals to fulfill the demand
  

Individual farmers -> hire contractors (for pickers) -> rent packaging facility -> sell to exporter -> export

-Key trading points:

• The US grape market is a supplier market. Domestic buyers tend to visit the farm directly to get supplies from farmers.
  
• Directly sourcing from growers
  
• Target growers in the San Joaquin valley tend to have bigger land than the ones in the southern area.
  
• Build good relationships with individual growers as they tend to keep supplies even if they are contractually working with an exporting company. (Even exporting companies try their best to keep good relationships with these farms)
  
• The concept of FOB for growers is those that are picked up from the farm, not the port. 
  

Who Are the Major Producing Companies in the US?

1. Giumarra Vineyard, CA - 10,000 acres

2. Anthony Vineyard - 5,400 acres

3. Sun Pacific Farming, CA -3,100 acres

4. Gerawan Farming, CA -2,696 acres

Among the top 24 grape producers (table grapes & wine grapes), only 4 are producing table grapes. The top grape producer (wine grape producer) owns 4 times more acres than the Giumarra vineyard (top table grape producer).

There are about 500 grape growers under producers(brands producing grapes), very fragmented.

General Product Introduction

Overview of the US world grape market exports?

US Grape Export Value (2021): USD  782.7M

YoY Growth Value in 2021: -5%

US Grape Export Volume (2021): 310 million MT

YoY Growth Volume in 2021: -12%

What are Some Issues in the US Grape Market Supply?

Labor shortage: a) Covid-19 restrictions & grants that incentivize workers to work. The situation worsens during August & September when more fruits come into season. b.) Intense temperatures (above 100 degrees Fahrenheit) prevent workers from working by law

Heatwave: Tremendously affected the crops from Coachella valley (early varieties)

Small players are at a disadvantage

Covid-19 unemployment benefits disincentivize workers at the usual wage rate, causing a problem, especially for small and individual farmers that lack capital than big firms. 

Trade Overview

What is the global market situation of the US grape industry?

The USA is one of the major producers of grapes globally. The United States grapes market is driven by favorable price trends and expanding export markets. The United States grapes market has witnessed an increasing price for grapes, which is greatly derived from increasing global demand for grape-based products, and less than proportionate growth in production.

Grape US Market Information

The United States is expected to see reduced shipments due to lower production, alongside other top-producing countries such as Chile and Mexico. Only 1/3 of the US’s grape harvest is exported, showing strong domestic demand. Due to decrease production and poor quality of Chilean grapes, one of the key grape suppliers of the US, the domestic producers may tend to supply more to the domestic market. Compared to other grape uses, the table grape industry accounts for a small portion of the total grapes grown, with the majority being used for wine and raising production.

Seasonality of Main Producing Regions

How is the Quality Check for US Grape Exports Graded?

Platinum(88LT)

 -24-26mm, Brix 20+

Premier(66LT)

-21-24 mm, Brix 18+

US#1(44LT)

-20-22 mm, Brix 17+

Composite(33LT)

-19-21 mm, Brix 16+

US#2(22LT)

-16-18 mm, Brix 16+

Which varieties are preferred in the Asian market?

Order of preference in most of the Asian markets: Green > Red > Black

Taiwan: Autumn crisp, Sweet Globe, Arra; size of around 22m.

 -Previously black seedless was demanded but in the recent years, consumer preferences have shifted to green/white seedless grapes because of their bigger size and higher brix level.

Korea: Autumn crisp, Sweet Globe

Vietnam: Pretty lady green, Midnight beauty seedless

How is the Seasonality in the US for Grapes?

1. Seasonality of Grapes by region

2. Seasonality by Variety