RETAIL VIEW: Papayas offer promotional opportunities
- by Tim Linden | July 14, 2009
Papayas are not one of those items that are often promoted at retail. After all, there is no generic promotion board, the crop is not seasonal, the United States has limited production with most of the U.S. output consumed in Hawaii where it is produced, and the volume is in just enough hands that there is no one dominant player in the marketplace.
But Brazilian-born Homero Levy de Barros, who has dedicated the past two decades to the tropical delight, believes retailers are missing a golden opportunity when they fail to put papayas on ad with a good promotional price. "If you drop the retail price [to a promotable level], sales will multiply by tenfold," he said.
"Retailers tell me they can't drop the price because they need to make up for shrink. You don't need shelf life, you need sales," he said he tells retailers, arguing that if sales increase by tenfold, there will be no shrink to worry about.
Mr. Levy de Barros, who is president and chief executive officer of HLB Tropical Fruit USA Inc. in Plantation, FL, has been making this argument for the past two decades after he switched his company from an international supplier of Brazilian seafood to an international supplier of Brazilian papayas. He moved from Brazil to Germany about 30 years ago to supply Europe with fresh South American seafood, which he did for 12 years. In the early 1990s, however, he began distributing papayas and soon dedicated his company to that pursuit.
HLB Tropical, which also operates under the name Caliman International, has offices in Florida and Germany to service both the United States and Europe. The company's primary supplier is the Brazilian-based Caliman firm, which is among that country's larger exporters of papayas. Mr. Levy de Barros handles the firm's sales to all but three export markets.
He said that papayas are an interesting anomaly in the produce industry, as they have no off-season. In addition, the two major producing countries -- Brazil and Mexico -- produce far more tonnage for domestic consumption than is exported. Each papaya tree, which is actually a plant or an herb rather than a tree despite its 20-plus feet in height, produces on a two-year cycle. A typical papaya grower has acreage in different phases of that two-year cycle, creating a very steady supply year round. And as mentioned, Brazil, the world's largest producer, exports only about 3 percent of its volume, according to Mr. Levy de Barros. He said that Mexico, the world's second largest producer, consumes about 90 percent of its volume domestically. India is another large producer of papayas, but virtually that entire crop is consumed domestically.
"In Brazil, papayas are eaten for breakfast every day. Everyone eats them," Mr. Levy de Barros said.
Consumption patterns are similar in Mexico. However, for the most part, Mexico and Brazil do not produce the same variety of papaya.
Mr. Levy de Barros said that the papayas that end up in the U.S. marketplace basically come in four different varieties. Hawaii produces the Kapoho variety. Most of the Hawaiian papayas stay on the islands and feed the tourist trade. Hawaii, however, does ship some of its volume to the mainland, mostly the West Coast. As far as papayas go, the Hawaiian papaya is in the small-sized category.
The biggest papaya seller in the United States is the Maradol variety, which mostly comes from Mexico. It is a very large papaya and can easily reach five pounds, though the vast majority that is shipped to the United States is in the three-pound range, according to Mr. Levy de Barros.
Guatemala and Belize ship the Tainung papaya to the United States. The large piece of fruit comes from a hybrid seed developed in Taiwan. Sometimes the variety is also called Formosa, which means beautiful in Portuguese and was once a name for Taiwan.
The Brazilian variety is the Golden papaya, and it is a small-sized papaya. Mr. Levy de Barros admitted that the Maradol papaya is a much better seller than the Golden, but he submitted that the Brazilian fruit is sweeter, better tasting and better suited to the Anglo customer in the United States.
"The larger papayas outsell the smaller ones three to one," he said. "But that's because they are preferred by the 20 million Mexicans in the United States, and they cost less because they are produced closer to the market."
Brazilian papayas are typically air freighted to the United States, while Belize and Guatemala suppliers send their supplies by ship and Mexican distributors send their cartons of fruit by truck. The Mexican fruit obviously has a freight advantage. But Mr. Levy de Barros said that the typical non-Hispanic U.S. consumer is more inclined to try a papaya if it is smaller. And he said that the opportunity for growth lies with that U.S. shopper. Only 10 percent of U.S. consumers, he said, have tried a papaya.
Mr. Levy de Barros said that a savvy retailer will merchandise both large and small papayas to capture sales from both the regular user and those who want to experiment. Make no mistake about it, Mr. Levy de Barros said, sales of papayas are on the rise. "During these difficult economic times, I expected to see a decline in sales, but it hasn't happened, much to my surprise. I think people are eating at home more, and so they are eating more papayas. Papayas are not a fruit that is typically eaten at a restaurant."
For example, Maria Brous, a spokesperson for Publix, said that the large Florida-based retailer handles both the larger Maradol papaya, sourced from Belize, and the smaller papaya, sourced exclusively from Brazil. She said that the retailer does promote the Maradol variety during peak production periods, and during those promotional periods sales increase, but she did not specify the percentage of increase.
Publix carries papayas in all its stores on a daily basis unless there are catastrophic weather conditions that prevent the shipment of the crop, she said.
Mr. Levy de Barros said that the popularity of the fruit around the world has a lot to do with its superior nutritional profile. "Papayas have 80 percent more Vitamin C than an orange. They have more potassium than a banana. They also have lots of Vitamin A and are a good source of fiber. Papayas also have an enzyme that regulates the digestive system. Let's put it this way: If you only could eat one fruit, it should be a papaya," he stated.
Mr. Levy de Barros' unabashed cheerleading aside, papayas do have a reputation as a good source of nutrition and have received a fair amount of favorable press recently. This promoter of the tropical fruit said his efforts have not been ignored. He listed a handful of the nation's top retailers that have found success promoting the crop. He allowed, however, that papaya sales seem to do better on both coasts and not so well in the middle of the country.
"The key is promotion and a good price," he said. "A 150-store chain will sell more papayas than a 900-store chain if it sells them for a smaller margin. Consumers will try them if you give them a good price."