• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Title Page
 Center information
 Table of Contents
 List of Tables
 List of Figures
 Summary
 Introduction
 Procedure
 Research findings
 Conclusions and recommendation...
 Appendix
 Reference














Group Title: Report - Florida Agricultural Market Research Center ; 76-3
Title: Marketing Florida limes : a wholesale and retail analysis
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027572/00001
 Material Information
Title: Marketing Florida limes : a wholesale and retail analysis
Series Title: Report - Florida Agricultural Market Research Center ; 76-3
Physical Description: Book
Language: English
Creator: Degner, Robert L.
Publisher: Florida Agricultural Market Research Center, a part of the Food and Resource Economics Department, Institute of Food and Agricultural Sciences, University of Florida,
Publication Date: 1976
 Record Information
Bibliographic ID: UF00027572
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Title Page
        Page i
    Center information
        Page ii
    Table of Contents
        Page iii
        Page iv
    List of Tables
        Page v
    List of Figures
        Page vi
    Summary
        Page vii
        Page viii
    Introduction
        Page 1
        Page 2
        Page 3
        Page 4
    Procedure
        Page 5
    Research findings
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
    Conclusions and recommendations
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
    Appendix
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
    Reference
        Page 42
Full Text
LZ'$TOBER 1976 -3



'0
N /%.

RKETING"

F lLIMES:




RETAIL, A













ABSTRACT


Produce merchandisers of major food retailers in Chicago
and Los Angeles were interviewed to determine wholesale and
retail marketing practices and problems associated with fresh
Florida limes and to identify ways to increase retail lime sales
during the summer months, the peak production period. Few
physical handling problems were discovered; the consensus was
that Florida limes are preferred by the produce trade because
of superior quality. However, limes were found to represent an
extremely small proportion of produce department sales. Conse-
quently, limes are given relatively little attention by retailers.
Shelf space allocated to limes is generally minimal. Point-of-
purchase materials are used by many retailers when available, but
limes are featured infrequently. Tie-in products are rarely used
in conjunction with fresh limes.


Key words:


limes, marketing, merchandising.


This report is circulated without formal review by the
Food and Resource Economics Department. Content is the sole
responsibility of the authors.










MARKETING FLORIDA LIMES:
A WHOLESALE AND RETAIL ANALYSIS










A Report by Robert L. Degner and Kary Mathis







a research project conducted for the
FLORIDA LIME ADMINISTRATIVE COMMITTEE









November 1976


The Florida Agricultural Market Research Center
a part of
The Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida













The Florida Agricultural Market Research Center


A Service of
the Food and Resource Economics Department
of the
Institute of Food and Agricultural Sciences





The purpose of this Center is to provide timely, applied
research on current and emerging marketing problems affecting
Florida's agricultural and marine industries. The Center seeks
to provide research and information to production, marketing,
and processing firms, groups and organizations concerned with
improving and expanding markets for Florida agricultural and
marine products.
The Center is staffed by a basic group of economists trained
in agriculture and marketing. In addition, cooperating personnel
from other IFAS units provide a wide range of expertise which can
be applied as determined by the requirements of individual pro-
jects.












This research was supported in part by a grant from
the Florida Lime Administrative Committee
















TABLE OF CONTENTS


LIST OF TABLES . . .

LIST OF FIGURES . . .

SUMMARY . . . .

INTRODUCTION . . . .

PROCEDURE . . . .

Selection of Market Areas .
Selection of Firms . .

RESEARCH FINDINGS . . .

Procurement Practices . .
Containers .. . .
Product Characteristics . .

Fruit Size Preferences .
Shelf Life . . .
Shrinkage . .

Allowance for stylar-end

Retail Merchandising Practices. .

Product Availability .
Packaging . .

Chicago . .
Los Angeles . .

Display Space .....
Point-of-Purchase Materials.


Pricing.


* .

.

* .

.

. .

. .
. .

.

. .








breakdown







. .

. .

. .

. .


Use of point-of-purchase materials for
Preferred point-of-purchase materials.


. .





. .
















. .

I mes


Increasing Lime Volume in the Summer: Retailers' and Whole-
salers' Views . . . . . .




i1i


. . . . 25


. 27


Page

. v

v vi

* viii

. 1

S5

S5
S6

S6

S6
S8
. 11

. 11
. 12
. 14

. 16

S16

S16
S17

S17
S18

. 18
. 21

S22
. 22









TABLE OF CONTENTS (CONTINUED)

Page
CONCLUSIONS AND RECOMMENDATIONS . . . .... 30

Limes in Perspective . . . . ... 30
Pack and Containers. . . . .. .. 31
Trade Relations. . . . . .. . 32
Merchandising . . . . ... .... 33

APPENDIX . . . . .. . . . 36

REFERENCES . . . . . .. .. .42













LIST OF TABLES


Table Page

1 Number of retail stores and market shares for grocery
firms included in lime marketing study, Chicago and
Los Angeles, 1976 . . . .... .. 7

2 Source of fresh limes for Chicago and Los Angeles retail
grocery firms, 1976. . . . . 8

3 Container changes recommended by food retailers, Chicago
and Los Angeles, 1976. . . . 10

4 Preferred sizes of fresh limes by major food retailers,
Chicago and Los Angeles, 1976. . . . ... 13

5 Causes for fresh lime shrinkage stated by food retailers,
Chicago and Los Angeles, 1976. . . . ... 14

6 Shrinkage of fresh limes as reported by food retailers,
Chicago and Los Angeles, 1976. . . . ... 15

7 Packaging techniques for fresh limes used by food retailers
in Chicago and Los Angeles, 1976 . . .... 18

8 Types of special displays used for fresh limes, 1976 . 21

9 Point-of-purchase preferences for limes as expressed by
food retailers, 1976 . . . .... 24

10 Pricing methods used by food retailers in Chicago and
Los Angeles markets, 1976. . . . ... 26

11 Gross margin on limes compared with lemons and all other
produce, Chicago and Los Angeles market areas, 1976 ... 26

12 Frequency of fresh lime sales promotions, as reported by
food retailers, Chicago and Los Angeles, 1976. . .. 28

13 Average weekly fresh lime sales per retail store, Chicago
and Los Angeles, 1976. . . . . ... 31













LIST OF FIGURES

Figure Page

1 Florida limes, bearing acres and production,
1965-66 through 1975-76, with projections to 1985 . 2

2 Florida limes, production and use, 1968-69 through
1975-76 .. . . . .. ... 3

3 Florida limes,.fresh sales,-- average monthly ship-
ments and average monthly prices, 1971/72-1975/76 . 4













SUMMARY


Florida is the major lime producing area in the United States. Lime
production has increased nearly 60 percent and total value has more
than doubled in the last eight years.

Lime production is highly seasonal, with largest volumes marketed in
the summer. Lime prices vary greatly during the season, with relatively
high prices during short-supply periods, and low summer prices, below
production costs at times.

Fifteen executives in corporate chains and four in wholesale operations
of voluntary chains were interviewed in Chicago and Los Angeles during
September and October, 1976.

The firms contacted controlled or supplied almost 2,800 stores, and
accounted for approximately 83 percent of grocery sales in each market
area.

Chicago retailers use Florida limes almost exclusively all year, while
Los Angeles area firms purchase some California and Mexican limes in
the winter and spring. Florida limes make up the bulk of lime sales in
California, however.

Most larger retailers in Chicago bought nearly all their limes directly
from Florida shippers, but California firms bought limes almost exclu-
sively from terminal market wholesalers or repackers.

Practically all retailers preferred to have a 10-pound container all
year. Relatively few individual stores sell enough limes to use a 38-
pound carton each week.

Florida limes are regarded as superior in quality and are preferred by
practically all executives contacted.

Chicago area retailers preferred limes in the 54 to 63 size range,
while Los Angeles firms preferred 54's and larger.

Retailers reported Florida limes had a shelf life of 7 to 10 days under
refrigeration, and 3 to 5 days in non-refrigerated displays.

Retail shrinkage -- limes removed due to drying, yellowing or other
deterioration ranged from about three percent in Los Angeles to nearly
8 1/2 percent in Chicago.

Retailers and voluntary chain wholesalers did not regard stylar-end
breakdown as a serious problem to them.








Retailers handle fresh limes all year, but some smaller stores will
occasionally be without limes when prices are particularly high.

Most of the retailers interviewed sell limes in bulk all year. Some
package limes during the winter and early spring when prices are high.

Nearly all Chicago area retailers display limes in refrigerated cases,
but about half the Los Angeles retailers use non-refrigerated lime
displays.

Usual lime display amounts are 5 to 10 pounds, except when price
specials are being run, when 20 to 75 pounds of limes Will be on
display.

Retailers felt that increasing lime display space with no change in
consumer demand would not increase lime sales appreciably, but would
increase shrink and waste in the store and would lower the average
quality available to the consumer.

Some tie-in merchandising was used with limes, but retailers generally
did not concern themselves greatly with ideas for merchandising limes.

Nine of the firms contacted had used point-of-purchase (POP) materials
for limes, and these retailers plus another five said they would use
materials if available. Preferred POP items were small, high quality
price cards and recipes.

Chicago area retailers price limes in multiples -- 3 for 30t, etc. --
except where required by law to price per pound, while Los Angeles
firms price limes individually.

Retail margins for limes or the percentage retail prices are "marked
up" from wholesale levels, were the same as for lemons and similar to
the average of all other produce items in most firms contacted.

Limes were placed on special about three times during the summer and
once or twice the rest of the year.

Executives interviewed felt consumers know only one way to use limes --
in beverages. Educational and promotional efforts with consumers should
increase their knowledge of other uses for limes and thus increase sales,
according to firm representatives.


viii





MARKETING FLORIDA LIMES:
A WHOLESALE AND RETAIL ANALYSIS

Robert L. Degner and Kary Mathis


INTRODUCTION


Florida produces most of the limes grown in the United States,
with over 90 percent of domestic acreage and production. Florida
has held this dominant position for 50 years, as production of the
Persian or Tahiti lime supplanted the Mexican or Key lime following
the 1926 hurricanes [5]. From 9,800 bushels in 1928, Florida lime
production increased to about 1 3/4 million bushels currently [3].
Bearing acreage increased 18 percent from 1968-69 to 1975-76,
while production rose 57 percent over the same period (Figure 1).
Total value more than doubled over those seven seasons, increasing
from $3 million to,$10 million [3]. Recent projections show lime
acreage increasing by about five percent from 1973 to 1985, with
total production going up by 30 percent [6], in the absence of hurri-
canes or other natural disasters. Increased production in the past
five years, and prospects for additional growth are of concern to
lime growers and shippers.
In addition, the seasonal nature of lime marketing and the result-
ing variation in grower prices have major effects. From 1971-72
through 1975-76, total production ranged from 1,680,000 to 1,760,000
bushels, with certified fresh shipments varying between 711,000 and
895,000 bushels (Figure 2). Over these five seasons, an average of
62 percent of the season's crop was marketed during the five-month
period of May through September and 41 percent during June, July, and
August [9]. Volume increases sharply during May to a summer peak,
then declines substantially. Prices vary in the opposite direction
from shipments, with a sharp drop in price in May, and an increase
in the fall from the low summer level (Figure 3). Over the five-
season period, 1971-72 to 1975-76, July prices were about one-third
those in April, with March prices averaging nearly four times July
levels.


ROBERT L. DEGNER is assistant professor and KARY MATHIS is asso-
ciate professor of food and resource economics, University of Florida.











-' Proj.
1985


Acres x
----- -- --- -----
Proj.
1985


I I I I I I I I I I I


65-66


67-68 69-70


71-72 73-74 75-76


1000 Bu.

-2000




1500



-1000



500




0


Figure 1.--Florida limes, bearing acres and production, 1965-66 through 1975-76, with
projections to 1985


Acres


5000



4000 -


3000
4














1000 Bu.


2000





1500




1000





500




0


TOTAL


PROCESSED


FRESH


Figure 2.--Florida limes, production and use, 1968-69 through 1975-76


68-69 69-70 70-71 71-72 72-73 73-74 74-75 75-76








1000 Bu.




120


100


80


60


SHIPMENTS


\iV

P


40 -


n -. jI I 1 I I_ ___ r _________


A M J J A S
Months


Figure 3.--Florida limes, fresh sales--average moi
average monthly prices, 1971/72-1975/71


0 N D J F M

nthly shipments and
6


I
I
PRICES
I
I
I
I





*/


$/Bu.


-25



-20




-15



-10




- 5


LJ





5


An average of 53 percent of the total lime crop was diverted
to processing uses during the 1971-72 to 1975-76 period. This pro-
portion ranged from 57 percent in 1971-72 to 46 percent in 1975-76.
Grower returns on processing fruit have been negative for the past
several seasons. Thus, with heavy volume and low prices for fresh
limes in the summer months, losses on processing fruit, and antic-
ipated increases in the lime crop in coming years, Florida growers
are seeking ways to improve lime marketing. The objectives of this
study were to determine wholesale and retail practices and problems
with Florida limes and to identify ways to increase retail lime
sales during the summer months.


PROCEDURE


Structured executive interviews were conducted with produce
merchandisers and buyers in corporate or regional offices of retail chains
or voluntary cooperative retail chains. In addition, as time permitted,
visits were made to leading chains' retail stores to interview store-level
personnel and observe merchandising practices. Seven stores were visited,
four in Chicago and three in Los Angeles.


Selection of Market Areas


According to shipment data supplied by the Florida Lime Adminis-
trative Committee, the leading U. S. markets for fresh Florida limes
are New York, Los Angeles, and Chicago respectively. During the 10-
week period of May 1 through June 3, 1976, 43 percent of Florida's
lime shipments went to these areas.
Original plans were to conduct structured executive interviews
with produce merchandisers of major food retailers in all three markets.
However, after conducting interviews in Chicago the week of September 20
and in Los Angeles the week of October 4, 1976, it was determined that
the objectives of the study could be adequately met without including
New York.








Selection of Firms


Both Chicago and Los Angeles are concentrated markets. That
is, a relatively small number of retail food firms account for a high
proportion of food sales. Thus, firms were selected on the basis
of their relative importance in the respective markets as evidenced
by published estimates of their market shares [81. The eight Chicago
firms interviewed controlled a total of 1,377 supermarkets in the
Chicago market area and accounted for approximately 83 percent of
retail food store sales [1,2]. The eleven Los Angeles firms controlled
1,417 supermarkets which represented about 84 percent of retail
food store sales (Table 1).

RESEARCH FINDINGS


Research findings are discussed in this section under five
major sections: procurement practices, containers, product charac-
teristics, retail merchandising practices, and retailers' suggestions
for improving lime marketing.

Procurement Practices


Chicago firms reported buying Florida limes exclusively through-
out most of the year. Only when Florida supplies are extremely tight
in the spring do they occasionally obtain limes from California or
Mexico. However, all eleven California firms interviewed utilize
some California and Mexican grown limes during the winter and spring
because of price and availability. All of the Chicago firms and 10
of the 11 California firms expressed a definite preference for the
Florida Persian lime.
Most of the larger retailers in Chicago reported buying some of
their lime supplies directly from shippers. Four of the eight said
they bought exclusively from shippers while three others obtained
their fresh limes from both wholesalers and shippers. Only one retailer
in Chicago obtained his needs exclusively from wholesalers (Table 2).
The situation was quite different in California. None of the retailers








Table 1.--Number of retail stores and market shares for grocery firms
included in lime marketing study, Chicago and Los Angeles,
1976.


Market, Firm No. of Storesa Share of market's grocery
store sales
---------Percent---------
Chicago:

Jewel 240 30.0
National 185 11.0
Dominicks 62 11.0
A&P 95 4.0
Certified Grocers of Illinois 125 18.0
Scot Lad 70 4.0
Central Grocers 500 3.0
Grocerland 100 2.0
Totals 1,377 83.0

Los Angeles:

Lucky 160 14.0
Ralphs 82 11.9
Alpha Beta 293 11.9
Vons 130 8.0
Safeway 287 7.6
Market Basket 78 5.5
The Boys 37 4.8
Fazio's Shopping Bag 45 4.2
Smith's Food King 60 3.4
Albertson's 45 2.4
Certified Grocers of Calif. 200 10.0c
Totals 1,417 83.7
Grand Total 2,794 --

aThe number of stores reported here may not correspond to the respective
Standard Metropolitan Statistical Areas (SMSA) but reflects the number of stores
under the supervision of the person interviewed in the listed firms.
bThe share of the market reported here is for the respective SMSA's as
reported by Supermarket News [8].
CEstimated.








obtained fresh limes directly from shippers on a regular basis.
Two firms said that normal supplies were obtained from wholesalers
and that large quantities, for specials, were ordered directly
from Florida shippers. Nine of the eleven California firms
receive their supplies of fresh limes exclusively from area whole-
salers (Table 2). The greater role of wholesalers in Los Angeles
is due to the fact that few retail firms can utilize an entire
truckload of fresh limes, except on price specials. Since most of
their other produce needs are readily obtained in California,
Los Angeles retailers have few opportunities to combine limes with
other items in mixed loads from Florida.


Table 2.--Source of fresh limes for Chicago and Los Angeles retail
grocery firms, 1976

Source Chicago Los Angeles Totals

Shippers 4 0 4
Wholesalers 1 9 10
Combination, Direct and
Wholesaler 3 2 5
Totals 8 11 19

aThe term "wholesaler" includes terminal market wholesalers,
brokers, and repackers.


The more important role of the wholesaler in the Los Angeles
area was also reflected in the frequency of purchase at the wholesale
level. Six of the eleven Los Angeles firms reported daily purchases
of fresh limes. Four others could not give a specific frequency,
but indicated that they purchased limes several times per week. In
Chicago, however, most firms reported obtaining limes between one and
four times per week or as needed. None reported regular, daily
purchases as did the Los Angeles firms.

Containers


Representatives of all firms were asked what size or sizes of
containers they obtained during the course of the year, and whether or








not they had experienced any damage to the fruit which could be attri-
buted to the container. Finally, they were asked what changes, if
any, they would propose for present fresh lime containers. The responses
from Chicago and Los Angeles are reported separately due to the impor-
tance of intermediate handlers (wholesalers, repackers) in Los Angeles
(Tables 2, 3). However, the basic findings are similar.
Chicago area retailers expressed a marked preference for the
standard 10-pound container. The primary reason was quicker turnover
which resulted in a fresher product. Only one Chicago retailer reported
using the 20-pound container on a regular basis. One said his firm
only used it during the summer; two others indicated that not having the
10-pound container caused no particular problems. But all felt that
stores were not selling appreciably more limes, but simply ordering
less often. Another firm reported using the 20-pound container on a
regular basis, but only for larger stores; ten-pound containers were
preferred for smaller stores. Only three firms indicated regularly
receiving the 38-pound container, primarily for specials during the
summer.
In Los Angeles, the most widely used container was a 10-pound
polyethylene bag supplied by repackers. Six of the eleven firms reported
that the 10-pound unit gave them greater flexibility and generally met
their needs better than larger containers. Furthermore, they were
satisfied with the quality protection afforded by the poly bag. Only
one produce merchandiser indicated that his firm occasionally received
the 10-pound cardboard shipping container.
Only one Los Angeles firm typically buys the 20-pound container;
however, a number of firms use the 38-pound container. Four Los Angeles
firms indicated that they usually get the large container and break
them down into smaller units. Two of these break large containers into
"10 pounders," one breaks them down to 20 pounders, and one breaks
them into 10 and 20-pound units to meet individual store needs. Repre-
sentatives of two other firms said that 38-pound containers were ordered
only for special promotions, which normally occur during summer months.
Only one firm regularly buys the large container for distribution
directly to its larger stores.








Representatives of all firms were asked whether they had encountered
any fruit quality problems that could be attributed to the containers
currently being used by Florida shippers. The present containers are
viewed as highly satisfactory; one person said that "sagging" occasion-
ally occurs, but even he did not view it as a serious problem.
All those interviewed were asked for suggestions for container
improvement. Half of the eight Chicago firms specifically requested
that the 10-pound container be retained on a year round basis, but the
remaining four proposed no changes (Table 3).
Nine of the Los Angeles firms offered no suggestions for container
changes, but it is important to remember that many of them receive
10-pound containers from area repackers. The two suggestions that were
made reflect a lack of awareness of currently available container
sizes from Florida shippers. One suggested that shippers offer a 10-
pound container for greater flexibility at the retail level, and the
other suggested that shippers offer a 20-pound container. Both felt
that the "40-pounder" was too large for most stores given usual levels
of consumer demand.



Table 3.--Container changes recommended by food retailers, Chicago
and Los Angeles, 1976


Market area repones Suggestions/reasons
responses

Chicago 4 Keep 10 lb. container in summer to
maintain freshness at retail level.

4 No changes proposed.
Total 8

Los Angeles 1 Shippers should offer 10 lb. containers
for retail flexibility.

1 Shippers should offer 20 lb. container;
40 lb. containers are too large.

9 No changes proposed.
Total 11








Product Characteristics


Retailers were asked the sizes of fruit they preferred, and were
asked to evaluate Florida limes on shelf life, shrinkage and reasons
for shrinkage, to comment on overall quality, and to cite any serious
problems or complaints. All retailers interviewed state that Florida
limes are generally outstanding in quality and are preferred overwhelm-
ingly to limes from any other area on the basis of quality.
The Florida lime is recognized as superior in size, color, keeping
quality and all-around desirability. A few California firms will carry
only California limes when they are in season, but even those retailers
stated that Florida limes were higher quality. Three Chicago retailers
cited product characteristics as occasional problems. One had experi-
enced some stylar-end breakdown in some lots. Another buyer said
Florida limes occasionally had some external scarring, but even then
were superior to limes from other areas. A third stated that Florida
limes were thinner skinned and sometimes discolored more rapidly than
desirable. More retailers commented on problems with variable supplies
and prices, availability of mixed loads in the summer, and a few other
market and operational factors. These points will be discussed in
detail in later sections.


Fruit Size Preferences


Nearly all firms preferred limes in the 48 to 63 size. Actual
sizes purchased depended on price levels and on price differences between
sizes. The majority of Chicago retailers leaned toward smaller sizes,
54's to 63's, while most Los Angeles firms preferred 54's and larger.
Two firms in Chicago and one in Los Angeles stated that they stocked
44's and larger whenever possible.
Produce buyers and merchandisers interviewed had particular reasons
for choosing the sizes of limes they usually carried. The reasons given
for preferring larger sizes were for consumer appeal, to present a
"quality" image, and to be similar to large sizes of lemons. The main
reason given for preferring smaller sizes was that they can be priced








competitively at retail (Table 4). A later section on pricing provides
more detail on this topic. Another reason given by retailers for pre-
ferring smaller fruit was their feeling that most consumers would not
use an entire lime and larger limes would mean loss and waste.
Not all retail produce personnel interviewed were completely famil-
iar with the wide range of lime sizes available from Florida. Most
Chicago retailers seemed to consider 54's and even 63's as "large" fruit,
and apparently did not consider offering 48's or larger. If the Florida
Lime Committee feels that increased movement of larger size limes in
the summer is an important part of its marketing program, then efforts to
refresh buyers' memories on sizes produced, publicize their availabilities,
and modify pricing if necessary might be worthwhile.


Shelf Life


Florida limes have an average shelf life of seven to ten days
in refrigerated display space, and three to five days in non-refriger-
ated displays, according to retailers interviewed. Representatives
of Chicago firms stated that five to seven days were usual shelf life,
but one reported limes would keep satisfactory up to 30 days with
proper refrigeration. One retailer, who sold limes in a tray overwrap,
reported two-to-three-day life in that package.
Los Angeles retailers reported shelf life of nine to ten days
for Florida limes in refrigerated displays, and three to five days in
non-refrigerated space. Two stated limes were salable up to 14 days
after receipt. Another said lime turnover was rapid enough that their
supplies stayed in the store only three or four days, so he did not
know the maximum shelf life that could be expected.
When asked to compare the shelf life of Florida limes with that of
lemons, nine of the 18 retailers felt there was no difference. Two
respondents in Chicago and four in Los Angeles felt lemons had a longer
shelf life than limes. Three California retailers said limes remained
salable longer than lemons. None of the respondents noticed any dif-
ference in lime shelf life, or the comparison with lemons, between the
summer months and the rest of the year.








Table 4. --Preferred sizes of fresh limes by major food retailers,
Chicago and Los Angeles, 1976


Market Area


Chicago


Los Angeles


Preferred
sizesa

*63's, 54's

*40's, 45's



*36's


*63's

*54-63's





*54-63's

*54-63's

*48-63's

*48's

*40-44's

*63's

*60's

*48 -50's

*48-63's

*63's

*48's


Comments by individual firms


Prefer large sizes, better appearance.

Less units to sell; larger sizes
create quality image; match large
lemons.

Prefer large size for quality image, but
had to settle for 48's, 54's, and 63's.

Customers prefer this size.

"Average" sizes which allow cheaper
retail. Don't handle larger limes
because housewife probably doesn't use
whole lime; large lime would result in
waste.

For lower retail.

For lower retail.

Prefer larger sizes.

Larger sizes create quality image.

Don't like small-quality image.

Don't like smaller sizes (no reason).

Gives competitive retail.

Have good consumer appeal.

Customary, average sizes.

Gives competitive retail.

Need "average" size for variable stores.


aAsterisks indicate responses from individual firms. The numbers
refer to fruit count per 10-pound container.








Shrinkage


Chicago retailers reported that shrinkage in limes in the store
was due to dehydration and to stylar-end breakdown. Yellowing was
the main reason for removing limes from retail counters in Los Angeles,
while dehydration was the next most common cause of shrinkage (Table 5).
Retailers interviewed generally discard limes that are dried out,
show stylar-end rot, or have turned color. Since limes are a relatively
low-volume produce item, most retailers could not give accurate figures
on shrinkage. Estimates of the share of total lime volume discarded due
to deterioration ranged from two to 50 percent in Chicago and from 0.5
to 15 percent in Los Angeles (Table 6). In our judgment, the 50
percent shrinkage reported by one firm representative in Chicago far
exceeds the actual loss. When that estimate is removed, weighted
averages of shrinkage are about five percent in Chicago and three per-
cent in Los Angeles.


Table 5.--Causes for fresh lime shrinkage stated by food
Chicago and Los Angeles, 1976


retailers,


First Subsequent
Market Area/ Reason for Shrinkage First seq t Totals
Response Responses

---Number of firms---
Chicago

Dehydration 3 1 4
Yellowing 1 1 2
Stylar end rot 4 3 7

Totals 8 5 13

Los Angeles

Dehydration 2 8 10
Yellowing 8 1 9
Stylar end rot 0
Brown Spots 1 1

Totals 11 9 20








Only one firm in Chicago reduced prices on limes that had begun
to deteriorate, marking prices down by 60 percent. Six of the
Los Angeles firms contacted marked down limes for a weighted average
of 5.5 percent of volume handled. Retail price discounts of these
limes ranged from 60 to 75 percent of prevailing retail price (Table 6).


Table 6.--Shrinkage of fresh limes as reported by food retailers,
Chicago and Los Angeles, 1976


Market area/Firma Shrinkage Ratio of reduced
Discarded Sold at reduced price to regular
Discarded .
Price retail price

Chicago ---------------------Percent-------------------
A 5
B 2 to 5 -
C 4
D 5 -
E --- 10 to 20 40
F 10 -
G b 50 -- ---
Weighted Avg. 8.4 c 2.9 ---
(5.3)

Los Angeles

H --- 20 to 25 25
I --- 5 .33
J 15 -
K 10 -
L 2 -- --
M --- 1 N.A.
N 10 -
0 0.5 0.5 -
P --- 2 40
Q b --- 3 N.A.
Weighted Avg. 3.2 5.5 ---

aLetters assigned to firm responses were assigned randomly and do
not match listing of firms by name found in other sections of this report.
bWhere a range was reported, the mid-point was used in computing
the weighted averages over firms.
CThe weighted average shrinkage is only 5.3 percent when the unusual
50 percent shrinkage reported by one firm is eliminated.
Not available.








Allowance for stylar-end breakdown


Retailers and wholesalers interviewed did not view losses from
stylar-end breakdown as a particularly serious problem. From their
experience, neither the extent nor severity of losses were great enough
for them to be greatly concerned. When asked what kind of adjustment
or allowance would be fair, retailers stated they were more interested
in receiving and selling quality produce than in bargaining for adjust-
ments. Two Chicago retailers suggested that any adjustments be the
same percentage as the loss due to stylar-end rot. One of these would
add a charge for repacking labor. Only one Los Angeles retailer felt
the stylar-end problem was of great concern. However, Los Angeles
retailers contacted purchase most of their limes from repackers (see
the section "Procurement Practices"). Thus, limes with stylar-end break-
down are removed by the repacker, and are not a direct problem to the
retailer.


Retail Merchandising Practices

A major portion of the study was devoted to determining prevailing
merchandising practices and problems for fresh limes. The major topics
explored were (1) product availability at the retail level, (2) extent
of packaging, (3) the nature and allocation of display space, (4) extent
of special or unique promotions, and (5) utilization of and preferences
for point-of-purchase materials.

Product Availability


Representatives of all major retail firms interviewed in both Chicago
and Los Angeles have a policy of handling fresh limes on a year-round basis.
Furthermore, the consensus of the major chains was that virtually all of
their stores stock them all year. The voluntary chain produce merchan-
disers generally did not know what proportion of the stores they serviced









handled limes; one estimated that only 50 percent regularly stocked
them. The produce merchandisers of the major chains generally felt that
occasional out-of-stock conditions occurred especially in late winter
when lime prices were at a maximum. However, most thought that the
stores that temporarily stopped handling limes during such periods
generally had poor lime sales. Such stores were typically described
as "low-volume" and/or "low-income." Produce merchandisers emphasized
that stores where a large proportion of the clientele was black typically
have poor lime sales, but said Latin areas are among the best lime sales,
along with high-volume stores and those in high-income areas.
The produce merchandiser of one major chain said that approximately
one out of every six of his stores stopped handling limes during the
summer because of the 20-pound container. He reported that half of his
firm's stores sell only five pounds of fresh limes per week and the 20-
pound container resulted in excessive shrinkage. It is probable, however,
that the firm has a substantial number of low-volume stores in low-income
neighborhoods.


Packaging


Packaging methods used at retail. are the same in Chicago and Los
Angeles. The two basic types of packaging are a tray-overwrap (a pressed
fiber or styrofoam tray wrapped in clear plastic film) and a clear poly-
ethylene bag into which a square or rectangular piece of cardboard is
placed to provide rigidity. The tray-overwrap is packed at the store, and
is the more common package; the poly bags are usually put up by repackers.
Packages usually contain from two to eight limes. Stores rarely sell
limes both in bulk and in packages simultaneously. However, it is not
uncommon to find different stores within the same firm offering bulk and
packaged fresh limes. Because the incidence of packaging was somewhat
different for the two cities, the findings are discussed separately.


Chicago


Two firms in Chicago sell fresh limes in bulk only, throughout the
year, while one firm always packages them (Table 7). The remaining five








firms use both methods, usually at different times of the year or in
different stores. Most of those firms indicated a preference to sell
limes in bulk displays throughout most of the year, but use packaging
to "enhance" the product whenever retail prices are at their peak.
The reported sales of fresh limes per store for individual firms were so
varied that it was not possible to determine the effect on sales of
packaging versus bulk.


Los Angeles,


Seven of the eleven Los Angeles firms, all major retail chains,
sell fresh limes only in bulk the year-round (Table 7). Only one
packages limes all year. There were three firms, including the voluntary
cooperative chain, which offer limes in bulk and package.
As was the case in Chicago, the reported average sales per store
varied so much among firms that the effects of packaging on sales could
not be ascertained.


Table 7.--Packaging techniques for fresh limes used by food retailers
in Chicago and Los Angeles, 1976

Packaging technique Chicago Los Angeles

-----------Number of firms-------------

Bulk only (no packaging) 2 7
Bulk and tray-overwrapa 5 3
Tray-overwrap only 1 1
TOTALS 8 11
a"Tray overwrap" includes limes packaged in small poly bags with
a piece of cardboard in the bag to provide rigidity. Several firms
reported selling limes bulk in some stores and packaged in others simul-
taneously; other firms sell limes in bulk displays most of the year,
but switch to tray-overwrapped packaging when prices get extremely high.


Display Space


Most Chicago retailers display limes in refrigerated sections of the
produce department, but in Los Angeles, about half used refrigerated
space and half used non-refrigerated. In Chicago, six of the eight








produce merchandisers said that fresh limes were normally displayed
in refrigerated racks and one merchandiser reported the use of non-
refrigerated display space for limes. One voluntary chain produce
merchandiser reported that his affiliates used both types of display
space. The Los Angeles firms were about equally divided on the
use of refrigerated vs. non-refrigerated space. Los Angeles area
lime sales per store were somewhat greater, thus, the more rapid turn-
over was probably the reason that more stores are able to use non-
refrigerated space for limes. Chicago retailers indicated that they
had to refrigerate limes to extend shelf-life because of low volume.
The normal quantity of display space allocated to fresh limes
was found to be similar in the two cities, although there were some
differences in the general merchandising procedures. In Chicago, few
merchandisers knew the exact dimensions of the space allocated to limes,
but all agreed that the space was minimal and that it did not vary
throughout the year except for the few occasions when fresh limes were
on special. The general pattern in Chicago is for stores to display from
five to 10 pounds of fresh limes (in bulk) adjacent to lemons or other
citrus fruit to "break color." When limes are packaged, the typical
store will display about 15 to 20 packages containing from one to eight
limes each in the same areas of the produce department as bulk fresh
limes. One voluntary cooperative chain merchandiser said that many of
his stores display limes in the 10-pound shipping container, which results
in a display area of slightly less than one square foot.
There was considerable uniformity among retailers in Los Angeles
with regard to the quantity of display space and the prevailing merchan-
dising techniques. Nine of the eleven firms use small rattan, wire, or
plastic baskets for displaying limes. The oval baskets are approximately
17" X 11", and hold about 10 to 15 pounds of limes. The quality of the
display space in Los Angeles appeared to be relatively good. Approxi-
mately half of the produce merchandisers said that limes were included
in their citrus departments to add color.
Most firms reported that display space for limes was increased in
conjunction with price specials. Such increases vary considerably from
store to store. Where normal display space is "basket size," larger








retailers reported that low 'retail prices (54 to 7 each) usually
encourage larger displays which hold from 20 to 75 pounds. These
occasions are infrequent, however; the frequencies.of price specials
are reported in a later section.
All produce managers were asked how lime sales would respond to
a doubling of display space with prices constant. Reaction was virtu-
ally the same in both cities. Most merchandisers admittedly did not
know what the ultimate effect would be on sales, but "educated guesses"
by two major retailers in Chicago and three in Los Angeles were that
sales might increase in the short run but decline in the long run.
They felt that display of larger quantities would exceed present con-
sumer demand and result in excessive shrinkage; produce department
managers, in an effort to reduce loss, would tend to leave limes of
questionable quality on display, resulting in even lower sales. Merchan-
disers felt that increases in lime display space would result in less
than proportionate increases in sales. Thus, they indicated a preference
for displaying other produce items which have been shown to be more
responsive to increases in display space. Most merchandisers feel that
stores have gravitated by trial and error to an optimum quantity of space
for limes given present consumer demand.
Only two of the six firms in Chicago use special retail displays or
other product tie-ins for fresh limes (Table 8). One produce merchan-
diser displays limes in small wire basket extensions near cash registers
in liquor departments. Another incorporates fresh limes into a "tropical
fruit" display.
Los Angeles retailers reported greater use of special displays and
tie-ins. Special displays generally focus on limes only when limes are
being specialled at low retail prices. However, six merchandisers said
that limes had been incorporated into special displays which featured
"gourmet," "Mexican," "Hawaiian," or "International" themes. When these
special themes are used, limes are displayed along with tropical items
such as mangoes, pineapples, lemons, tamarinds and chili peppers. One
firm also uses bar tools such as lime squeezers as tie-in items. Mer-
chandisers were unable to give assessments of the effectiveness of the
special theme efforts on lime sales, but the consensus was that they help
move limes.









Table 8.--Types of special retail displays used for fresh limes, 1976


Market Area


Chicago





Los Angeles


Type of special displays and tie-insa


*None (six firms)

*Basket extension in liquor department.

*Other tropical fruits.

*None (three firms)

*Display limes with tropical fruits such as mangoes,
pineapples, lemons (Gourmet section) "Hawaiian Days";
Mexican items: mangoes, tamarinds, chili peppers.

*Display with other citrus for color contrast.

*Build table display with own special signs.

*Build ribbon (row) display rather than use basket.

*Occasionally build larger displays.

*Put basket of limes in liquor departments

*Tie-in lime squeezers, bar tools.

*Display limes in the "International" section.

*Could not remember specific tie-in, but thought that
it might have been dello in conjunction with a lime-
pie promotion.


aAsterisks indicate responses from individual firms.


Point-of-Purchase Materials


Produce merchandisers in both cities were asked about their use of
point-of-purchase (POP) material for limes. Their preferences for such
materials were also determined.


_~__~_~__~_ __ ~_____________.__-II-----l~ll~--X.-l-








Use of point-of-purchase materials for limes


Five of the eight Chicago firms interviewed indicated that they
had used POP material for limes. Three of these firms were compli-
mentary of the materials. Several specifically stated that they liked
the recipes and the price cards. They were also aware that the materials
had been obtained from the "lime committee" or "Florida."
Two of the five firms that reported using POP materials were vague
about the materials. They both said that use was infrequent; one could
not recall the source of the materials, and the other thought that lime
promotional material had been received from Calavo. Of the three
Chicago firms that did not use POP materials for limes, two said that
they had not because limes were a minor produce item. One was amenable
to the use of POP material for limes, but,he had not received any.
Five of the eleven Los Angeles produce merchandisers had received
POP material for limes. Four of these indicated that the materials had
been distributed to the stores; most specifically mentioned the recipes
and price cards. However, one of the five merchandisers decided not to
use the Florida lime materials because they were too large. Three of
the five that had received the materials identified Florida as the source;
one could not remember the source, and one thought Calavo had supplied
lime promotion materials.
Produce merchandisers of four of the six Los Angeles firms that had
not used POP materials for limes expressed only a mild interest in such
materials; they were unaware that POP materials were available for limes.
Two merchandisers were not at all interested in POP materials for
limes. One preferred to have POP materials for all stores printed by
the firm's in-house print shop so that all materials were uniform; the
other was aware of the availability of Florida lime POP material, but
he had not ordered supplies because limes constituted such a small por-
tion of his produce department's sales.


Preferred point-of-purchase materials


There was considerable agreement among produce merchandisers as to
their preferences for point-of-purchase materials. The most frequent








requests were for small, high quality price cards, pictures, (or
combinations), and recipes which served to educate the homemaker in
additional uses for fresh limes.
Most merchandisers stressed that the size of the material should
be relatively small. Dimensions of 7" X 11" (vertical and horizontal,
respectively) were the most frequently mentioned, although some expressed
preferences for 5" X 7" and 11" X 14" sizes (Table 9). Several said
that an important consideration in determining the size of POP material
used in their stores is the typical size of the product display. They
specifically requested that small materials be provided for limes
because lime displays are relatively small. It is highly doubtful if
larger POP material would encourage larger displays of limes; materials
larger than 11" X 14" would probably not be used at all. In fact,
several merchandisers said that 11" X 14" is too large for limes.
Eleven of the 19 felt that recipes which serve to educate the home-
maker in new uses would be good, although two expressed some degree of
reservation because recipes get scattered throughout the store and some-
times create clean-up problems. The consensus was that tear-off recipe
pads are the best way to display recipes, although one suggested a hole
in the recipe pads to facilitate displays on hooks. Most stores display
recipes with the actual product, but several chains have "recipe racks"
in their stores where all recipe offerings are placed. A frequent
complaint of merchandisers was that they usually did not receive ade-
quate supplies of recipes. Merchandisers generally felt that recipes
increased produce movement, but no specific examples could be obtained.
Chain retailers were noticeably more exacting in their preferences
for POP material; most are usually striving for a specific corporate
image, and POP material (either by its presence or absence) is an
important part of their image as well as being another merchandising
tool. The voluntary chains, with their diverse stores, were generally
not precise with their POP needs. Most voiced a preference for "kits"
that provide a broad variety of materials which can be adapted for many
types of stores. Obviously, this "shotgun" approach is expensive, and
unfortunately much of the material distributed in this manner is probably








Table 9.--Point-of-purchase preferences for limes as expressed by food
retailers, 1976


Type of firms

Chain retailers




























Voluntary Coops


Preferred materialsa


*"Talking" price cards; pictures; recipe pads or
packets in an integrated unit to minimize installa-
tion and removal effort.
*Price cards (11" X 14") and recipe pads.
*Quality pictures, die-cuts (5" X 7", 6" diameter)
*Recipes in larger quantities; price cards (7" X 11").
*Price-cards, pictures (7" X 11"); recipe pads.
*Small pictures, short messages (7" X 11").
*Small price cards with pictures; recipe pads for
bulletin boards (7" X 11").
*Price cards (11" X 14"); recipes 3 1/2" X 5" with
hole for store racks.
*Small pictures (7" X 11"); recipes are good but
wasted and messy.
*Small pictures (7" X 11" or 11" X 14") with recipe
pads. Never have enough recipes.
*Picture-price cards (7" X 11") or smaller. Size
must be relative to typical displays.
*Cut-outs, pictures (approx. 12" X 12"); recipes are
OK, but clutter stores.
*Price cards ("small"); recipes.
*Prefer to print own POP for uniformity.
*Easy to use materials to match the size of display;
recipe pads.
*Picture-price cards (approx. 9" X 12"); recipe pads;
keeps a "library" of POP materials for stores that
request it.
*No strong preferences for POP; big stores take any-
thing; small stores do not use much.
*Kits with varied sizes to fill needs of varied stores.
*Kits with price-cards, banners, etc., for varied
stores.


aAsterisks indicate responses by individual firms.








wasted. Materials developed for use by the large retail chains can
also be adapted for use by the voluntary chains, but the reverse is
not likely. Furthermore, sales figures of fresh limes indicate wider
availability and greater sales in large retail chains than in volun-
tary chains.


Pricing


Retail pricing methods, and margins or markups for limes and
lemons were covered, as well as the frequency of price specials.
Retailers in the Chicago area price limes in multiples -- three for
39t, six for 59t, etc. -- except in stores within the Chicago city
limits, where ordinances require pricing by the pound for nearly
all produce items. More Los Angeles area retailers price limes
on an individual or unit basis than in multiples (Table 10). Two
Los Angeles firms priced limes by the pound only when prices were
at high levels, while another priced by the pound when he considered
quality to be low.
Most firms contacted used the same methods for pricing lemons as
they used for limes. For example, firms pricing limes individually usually
did the same for lemons. Actual prices for each fruit and difference
between prices depended on wholesale market conditions and competition
according to firm representatives interviewed.
Retail margins, as a percent of retail price, were the same for
limes and lemons in 14 of the 18 firms responding, and markup on limes
was the same as on all produce items in nine firms (Table 11). Three
firms, all in the Los Angeles area, usually had a higher margin on
limes than lemons, while seven firms in the two areas had a higher
margin on limes than on the average of all produce. One Chicago retailer
normally kept his lime margin smaller than for lemons, and two California
retailers marked up limes less than the average of all produce.
Some retailers reported taking smaller margins when lime prices
were low, because volume was greater and shrinkage less than when prices
were high. Generally, margins on limes were varied little during the
year. Lime movement in relation to produce sales is small and merchan-
disers do not concern themselves greatly with varying margins on limes.








Table 10.--Pricing methods used by food retailers in Chicago and
Los Angeles markets, 1976


Pricing method Chicago Los Angeles


---------------Number of firms-----------------

Unit 0 8
Multiple Unit 7 5
Pound 7 3

aChicago retailers because of a city ordinance are forced to sell
nearly all produce by the pound. Several Los Angeles retailers that
sell fresh limes by the pound cited high prices as a primary reason.
One gave poor quality as his reason.


Table 11.--Gross margin on limes compared with lemons and all other
produce, Chicago and Los Angeles market areas, 1976

Margin on limes Margin Market Area
compared with: Amount Chicago Los Angeles Total

-------------No. firms-----------------

Lemons Same 6 8 14
More 0 3 3
Less 1 0 1
Total 7 11 18

All produce Same 5 4 9
More 2 5 7
Less 0 2 2
Total 7 11 18


The key point gained from retailers' responses on margins is that
the markup on limes is comparable to the average for all produce items,
and makes limes profitable to the retailer. Limes are thus an attractive
item for retailers who would increase display space, if consumer purchases
were increased.
Retailers reported offering price specials on limes about three
times during the summer and once or twice during the remainder of the








year. Los Angeles area firms placed limes on special more frequently
in the summer than did Chicago retailers. However, the Chicago area
firms featured limes at special prices more often the rest of the
year (Table 12). One firm in Chicago and three in Los Angeles
reported they put limes on special only twice a year, while one
California retailer did so once a month and one Chicago firm had
lime specials as frequently as eight times per year.
Actual price levels, or differences from earlier or "regular"
prices, depended on wholesale prices and on competition, according
to retailers. Several mentioned that, when their purchase prices
allowed, retail prices of 5 or 10t each for limes attracted many con-
sumers and substantially increased volume. Retailers' comments emphasized
the psychological appeal to consumers of such low retail prices. As one
retailer stated, "You can hardly buy anything for a nickel or dime
any more."
Only one retailer specifically mentioned large fluctuations in
prices as a problem, while three others cited small supplies at cer-
tain times as restricting availability and consumer purchases. Most
retailers felt that a certain proportion of their customers would
purchase limes at even very high prices, and that many more consumers
began using limes when prices dropped. It would be helpful from a
marketing standpoint to determine if low retail prices result in attract-
ing new or infrequent consumers or simply result in larger purchases by
regular consumers.

Increasing Lime Volume in the Summer:
Retailers' and Wholesalers' Views


Almost all wholesalers and retailers contacted stated that con-
sumers know only one way to use limes -- in beverages. For consumers
to buy more limes in the summer, they must be attracted by ideas and
uses that are new and different to them. Only one retailer had no
suggestions for increasing lime volume; his firm concentrated promotion
efforts on the 25 produce items generating the greatest dollar volume
and limes were "too low volume to justify promotion," he said. A
wholesaler stated that limes were a specialty item and nothing could be
done to increase movement.








Table 12.--Frequency of fresh lime sales promotions, as
retailers, Chicago and Los Angeles, 1976


reported by food


Market area/Firma Frequency of fresh lime specials
Annual Total
Summer Remainder of Year annual al

Chicago

A 2 1 3
B 2-4 2-4 4-8
C 2 2 4
D 2-3 2 4-5
E 3-4 1 4-5
F 2 0 2

Los Angeles

G 5-6 0 5-6
H 2 0b 2
I 4-5 --- 4-5
J 3 _-b 3
K 0 2 2
L 6-8 0 6-8
M 2 2 4
N 2-3 --_ 2-3
0 3 0 3
P N.A. N.A. 12
Q 2 0 2


aSpecific estimates of special frequencies
two firms in Chicago.


were not available from


b"Occasionally."


The other 17 firm representatives interviewed, however, were positive
in stating that consumers would respond to suitable efforts that increased
their awareness and knowledge of a wider range of uses for limes. Several
respondents cited sales increases in avocados as "success stories" and
several California retailers noted that pineapples and papayas had become
well-established and widely accepted due to education-promotion efforts.
Suggestions from those interviewed focused on ways to make consumers
aware of many more uses for limes and to attract them to act on the
increased knowledge. Though they had no research on the characteristics
of lime users, retailers believed that higher-income shoppers and people
of Spanish descent buy more limes than other groups of consumers. Retailers








also felt that these two groups would be most likely to respond to
educational-promotional programs showing uses for limes other than
with beverages, especially uses in cooking.
Retailers and wholesalers contacted suggested a number of ways
to reach consumers. Recipes and point-of-sale material were mentioned
most often. Several different recipes and price cards with attractive
pictures showing different uses for limes were specific suggestions
from retailers. They stated that, in their experience, these two
types of material significantly increased sales. Tie-ins were also
mentioned as helpful. Promotions tying limes to beverages, and related
items, were also suggested.
Advertising and promotion were also cited as ways to increase lime
movement in the summer. Those interviewed mentioned radio and tele-
vision, newspapers, magazines, and food pages as effective media.
Some of the Los Angeles retailers singled out radio as very effective,
especially in relation to its cost. These retailers felt that radio
had more impact on consumer awareness, at lower cost, than other media.
They did mention that California might differ considerably from other
market areas in the importance of radio advertising.
One retailer stressed the importance of "letting the consumer
know how important she is" in all educational-promotional efforts.
Another mentioned that limes went well in a "summer theme" in beverages
and foods, possibly with other tropical fruits, and suggested empha-
sizing easy-to-prepare recipes for warm-weather use.
Retailers and wholesalers interviewed also pointed to a need for
greater awareness by members of the trade regarding the variety of uses
for limes. They also suggested that more stable prices, at lower levels,
would increase lime movement.1 One firm representative felt display
contests would involve store produce managers and merchandisers, and
increase lime sales in the summer. He cautioned that prizes in such
contests must be sizable to attract participation.


Where the individual was interested and time permitted, we pointed
out the highly seasonal nature of lime production, and some of the
difficulties faced by growers and shippers.








CONCLUSIONS AND RECOMMENDATIONS


A basic conclusion reached by this study is that the primary
marketing problem faced by fresh limes is a lack of consumer know-
ledge about the product, rather than impediments at other points in
the marketing channel. This is not to imply that other marketing
considerations are unimportant, but identifies the consumer as the
focal point of market development activities. Detailed conclusions
and recommendations are discussed below.


Limes in Perspective


Limes are considered by retailers to be a low-volume, specialty
item. Many large supermarkets carry from,100 to 250 produce items [7].
Firms spend most of their promotion effects on the top 25 or 30 money-
makers, and limes are not one of them. Volume figures for fresh limes
obtained from retailers in both cities vividly reflect the marketing
problem confronting the Florida lime industry. In Chicago, fresh lime
volume per store ranged from 5 to 56 pounds per week and averaged about
14 pounds. Los Angeles retailers reported weekly store volume of
approximately 14 to 69 pounds per week, with an average of nearly 29
pounds per store per week (Table 13).
The wide variations in lime volume among chains is largely
unexplained. Merchandising methods and retail prices were all found
to be similar; differences in clientele, particularly with respect to
income and ethnic backgrounds probably account for much of the variation.
With an average shrinkage of 3.2 percent and a hypothetical retail
price of 15 cents each for size 54's,fresh limes' contribution to a
store's gross sales would amount to only $11.21 per week in Chicago and
$22.66 in Los Angeles. Considering that most firms operate on a gross
markup (based on the retail price) of about 40 percent, fresh limes
contribute only $4.48 and $9.06 to stores' gross profit in the two cities,
respectively. One Los Angeles retailer reported that his lime sales
typically constituted only 0.15 percent of his produce sales. The small
contribution that fresh limes typically make to produce departments'









profitability (in absolute terms) explains merchandisers' lack of
enthusiasm for and lack of knowledge about the product. Other produce
items with greater volume get the lion's share of their attention.


Table 13.--Average weekly fresh lime sales per retail store, Chicago
and Los Angeles, 1976


Average fresh lime sales
Chicagoa Firm
Pounds

12.5 H
56.0 I
5.0 J
25.0 K
12.5 L
13.3 M
15.0 N


Overall Average


14.3


aVolume figures were not available from one firm in
one in Los Angeles. Each number reflects a given firm's
store weekly sales of fresh limes.


Los Angelesa
Pounds

17.8
68.8
13.9
45.0
25.0
31.8
21.1
20.6
21.8
36.5
28.9


Chicago and
average retail


Pack and Containers


Florida limes are preferred by the retail trade over those obtain-
able from other growing areas. There were very few complaints about
Florida limes; most comments were extremely favorable.
The structural qualities of the containers currently used by
Florida shippers were reported to be highly satisfactory. However,
container sizes do not appear to meet retailers' needs, particularly
during the summer months when the 20 and 38 pounders are the only ones
available. Volume figures reflect the need for small containers
(Table 13). Firms reported that whenever smaller containers are unavil-
able, smaller stores order less frequently in an attempt to coordinate
inventory with sales. They reported product quality deterioration
which in turn decreases sales and increases shrinkage. This situation


Firm








was more pronounced in Chicago where both lower average retail volume
per store and greater direct-from-shipper purchasing was found. In
Los Angeles, average lime volume per store was greater, but even so,
most retailers obtain their lime supplies through wholesaler/repackers
who offer 10-pound containers on a year-round basis or else repack into
10-pound units themselves. California retailers seemed particularly
uninformed as to container sizes available from shippers, but this is
understandable. Low lime volume and lack of mixed loads may preclude
direct sales to retailers in California. An effort to better inform
them may prove profitable, however. Although many retailers were vocal
about retaining the preferred 10-pound container, actual effects of con-
tainer sizes on retail sales have not been documented.


Trade Relations

Although limes are available on a year-round basis, a special
"lime season" promotion for the heavy volume portion of the year may
get merchandisers' attention. The wide price fluctuations are not
understood by many merchandisers, and such a program could possibly
foster a better understanding of the supply situation and improve
good will. Another area of misunderstanding is that of stylar-end
decay. Few understood that the problem can occur despite rigorous
quality control efforts by shippers. Better knowledge of this problem
could also improve relations with retailers.
As previously mentioned, some retailers were unaware of the smaller-
sized containers offered by shippers. An occasional attempt to inform
the trade of container availability could possibly increase direct buying
by some larger firms at greater profitability to the Florida industry.
Some of the merchandisers were also apparently unaware of the avail-
ability of larger fruit sizes. A "reminder" could possibly move
additional quantities of limes and alleviate surpluses of larger sizes
during peak production.
Retailers can also utilize practical merchandising suggestions to
increase their awareness of limes during the peak Florida season. Most
firms special limes occasionally, and many appear willing to use
merchandising suggestions and material, at least during specials.








Merchandising


New or different display ideas and point-of-purchase materials
are welcomed by most produce merchandisers. Besides providing Florida
limes with greater trade visibility, merchandising efforts can be
directed at educating consumers in expanded uses for fresh limes.
Special displays of tropical fruits which include limes and
tie-ins with other items should be stressed. Occasional large displays
of limes could possibly be encouraged through display contests if held
during the peak availability period and if held in conjunction with
price specials. However, efforts aimed at increasing "normal" display
space for limes are doomed. Most merchandisers feel that they are
already allocating sufficient or excessive space to fresh limes given
current levels of consumer demand. Almost all felt that increasing
displays would not be practical. The consensus was that stores' short-
run gains would be minimal, and would be more than offset by shrinkage.
Further, produce managers would allow fruit to remain on display longer
in order to reduce their shrinkage. This would result in lower
average product quality and subsequently lower sales.
Point-of-purchase materials can provide a double-barreled pro-
motional effect. They offer a means of getting retailers' attention
and, if used, communicate directly with consumers. Produce merchan-
disers, particularly those of the large retail chains, are quite selective
about the materials they use. Point-of-purchase material must be of high
quality and relatively small, preferably 7" X 11", but definitely no
larger than 11" X 14". Color pictures of the product stressing new uses
for limes also educate homemakers and stimulate impulse buying. Such
pictures can either be used alone or preferably on a price-card.
Recipes showing additional uses for limes are also an effective and
reltaively inexpensive way to communicate with homemakers. Recipes
should be distributed in pad form; the pad could be attached to other
POP materials or have an adhesive back to allow for easy installation
by produce personnel. An important point is to make all materials easy
to install and to remove.





34



A final word of caution is in order for all POP materials: all
should be thoroughly copy-tested to determine what message is perceived
by homemakers. Materials may appeal to the lime industry, to adver-
tising agency personnel, and to retailers, but it is the homemakers'
reaction that is all-important.

































APPENDIX
















'FLORIDA AGRICULTURAL MARKET RESEARCH CENTER
UNIVERSITY OF FLORIDA

LIME MARKETING STUDY
RETAIL-WHOLESALE SURVEY


1. How do you normally buy: broker %
wholesaler %

2. Do you buy fresh limes all year?

3. How often do you buy limes? /wk. or

4. Source and Quantity by Month


direct (packer) %


/month.


Supply J F M A M J J A S 0 N D Totals
Area

Florida

Calif.

Mexico

Other

Totals


What size containers do you normally receive?


Size J F M A M J J A S 0 N D

40#

20#

10#


limes that can


be attributed


How frequently?


City:
Firm:
Person:
Title:
Date:


6. Do you experience any arrival condition problems with
to the container? Yes No (If yes) What?


-I


How frequently?






38










7. What changes, if any, would you like to see in Florida lime containers? [Keep
10# all year]


8. What sizes do you

38# Bruce






9. Why do you prefer


usually sell?

20#


this (these) sizes?


10. Do you or do you not have problems with size uniformity within cartons?




11. Shelf-life: How long do Florida limes hold up after arrival?


12. Shrinkage: What proportion of the limes you receive are:
1) Marked down % What percent of retail? %
2) Discarded? %

13. What are primary reasons for marking down or discarding? (Rank)
1. 2. 3.




14. How does the shelf-life of limes compare with lemons? Are there seasonal differences?
(>:<)


Summer
Remainder of Year


Limes
Limes


Lemons
Lemons


15. What are your most serious complaints about Florida limes?
a.
b.
c.


- --~-


















16. What kind of adjustment or allowance, if any, do you feel is fair for shipments
affected by stylar-end breakdown?


17. Do you special limes? Yes


If yes, how frequently during the summer?


How frequently during the remainder of the year?


18. Display Space/Quantity Displayed


Summer (Special) Remainder of Year (Special)


Limes


Lemons

Comments:



19. What proportion of your stores handle limes all year?____ %
Summer Only? % Describe the year-round store: (size,
location, income, age, race)



Describe the summer store only:



20. What type of display space is usually used for limes? Refrig. Non-refrig.
lemons? Refrig. Non-refrig.
21. If you doubled lime display space (no price change), how much would lime sales
increase?

22. If you doubled lemon display space, how much would lemon sales increase?















23. Do you use any special displays for limes?


For lemons? Yes No If yes, what kind?



Do you use any tie-in items for limes? Yes No If yes, what?


Do you use any tie-in items for lemons? Yes No If yes, what?


25. How are limes sold, bulk or
packaged?

Where Packaged
(Code S, W, R)
Mesh Bag
Poly Bag
Tray-overwrap__
Other


packaged? If packaged, what type of package? Where


Comments


26. How do you normally price limes?
Pound Each__ Multiple/Unit: for (Size_ )

27. Do you have a rule-of-thumb as to how much gross profit per square foot you expect
from display space per time period?


28. How does the gross markup on limes compare with lemons?
With the average for all produce?

Markup: Limes Lemons Limes All Produce

29. Do you use any point-of-purchase material for limes? Yes No
If yes, what kind?
Source:
For lemons? Yes No If yes, what kind?


Source:

30. What are your preferences for POP materials?



Preferred size (V x H)


Yes No If yes, what kind?





41

B











31. In addition to lower prices, how do you think lime sales could be increased?


9/76










REFERENCES

[11 Business Guides, Inc. Directory of Cooperative Chains, Wholesale
Grocers, and Voluntary Chain Groups. New York: 1976.

[21 ____. Directory of Supermarket, Grocery and Con-
venience Store Chains. New York: 1976.

[31 Federal-State Market News Service. Marketing Florida Sub-Tropical
Fruits and Vegetables. Orlando: June 1, 1976.

[4] Florida Crop and Livestock Reporting Service. Florida Specialty
Crops, "Lime Forecast." Orlando: April 9, 1976.

151 Florida Department of Agriculture. Florida's Lime and Lemon
Industry. Bulletin 102, New Series. Talahassee: July 1940.

[61 Institute of Food and Agricultural Sciences. Agricultural Growth
in an Urban Age. Gainesville: 1975.

[7] Supermarket Institute, Inc. "Average Supermarket Sales, 1974,"
The Supermarket Industry Speaks, 1975. Chicago: 1975.

[81 Supermarket News. Distribution Study of Grocery Store Sales in
284 Cities. Fairchild Publications, Inc.. New York: 1976.

[91 Walker, Charles. "Florida Limes." Florida Lime and Avocado
Administrative Committee. Homestead: 1975.




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs