"Garlic volume is up across the board this year in the northern hemisphere," observed Jim Provost from I Love Produce. "This means that China, Spain and California all had significant increased acreage and yields, maybe in the range of a 20 to 30 percent total increase in volume over the 2017 harvest. Given the sheer amount of volume, there is plenty of top-tier export quality garlic for the international markets."
Challenges for California
Freight and labor are the two main headache-inducing factors that are affecting California growers. Freight costs are so high right now that suppliers say that the cost of shipping European garlic to the East Coast is very competitive compared with from the West Coast, enabling a broader option for buyers there.
"I Love Produce works directly with growers of Spain garlic, which provides our customers a garlic similar in flavor profile and meets the highest level food safety standards in the market," Provost said. "Additionally, with trucking from California ranging from $8,000 to $10,000 to the eastern US during the season, the ocean freight from Europe to the East Coast give us very competitive pricing."
Provost also noted that the cost of labor in California is creating a challenge for the industry and changes need to be made in order for it to be sustainable. "The biggest challenge this year in the California garlic industry, and in the agriculture sector in general, is the shortage and cost of labor," he said. "We are competing with construction jobs paying $25.00 per hour. The hard work of clipping and cleaning garlic under the hot sun is not enticing given the other options in the marketplace. So I think reducing dependence on labor in the garlic industry will be an ongoing concern."
Market softer but demand is good
With the increase in garlic production from all regions, prices are softer than they were last year. Therefore, it did not come as a surprise to most producers. Additionally, demand is surprisingly strong and looks set to continue that pace as the season progresses.
"Garlic movement is good, especially considering we are in one of the hottest summers on record," Provost noted. "People usually cook less in this heat, but sales are still strong. Moving volume now and before September is a good thing because after August the garlic will need to be put away into cold storage which adds extra cost. Overall, garlic prices will be somewhat reduced in the 2018/2019 season, but a correction was due based on the fact that demand has exceeded garlic supply the last 3 years. Finally, the growers have caught up with demand this year."
With the garlic prices being strong over the past few years, this has encouraged other regions around the world to increase production to satisfy their own garlic needs, or to become strong exporters in their own right.
"When asked about the major producers/exporters of garlic, the standard answer used to be China, California (USA), Spain, Mexico and Argentina, for the most part," Provost explained. "However, since the price of garlic was so strong the last 3 years, other countries have started to upgrade their garlic industries to try to get self-sufficient for their own domestic consumption of garlic, and in some cases to compete on the world market. More recent players on the world stage include Egypt, Peru, India and Ukraine. Additionally major importers of garlic, like Brazil and Indonesia, have made strides to boost their internal production for domestic consumers."
Growth evident in category as well as company
The team at I Love Produce welcomed a new member late last year. Isha Ghetia joined I Love Produce as a Sales Coordinator and now manages the company's accounts, website development, marketing, and coordinating sales and logistics with the sales team. "Isha has been such a great part of our team, bringing a very positive energy, plus she is super smart and a team player," Provost declared. "She is also fluent in Hindi, Gujarati, Marathi and of course English. Her family runs a soybean business in India, so she has a solid background in the food industry."
It's a positive step for the company as they look to take garlic to another level. Provost mentioned that it is important to continue to encourage the growth in the garlic category by placing appropriate advertisements and fuel the momentum. "When I started in the business in 1991, garlic was considered a specialty item," he recalled. "It has experienced double-digit growth over that time, and what was once considered an ingredient of ethnic cuisines is now a mainstream commodity consumed by Americans for health and taste coast-to-coast. Supermarkets should advertise it as such. As an industry we have the volume and pricing to make consumer friendly promotions and really drive the category."
