Impact Major Holiday's Article

Impact of Major Holidays on Fruit Promotions

Holidays, both public and unofficial, have become a major vehicle for retail promotions throughout the year. Until recently, there was little public data available that would permit analysis of the effects of holidays on fruit promotions. A new series that has been published weekly by USDA's Agricultural Marketing Service since October 2007 provides analysts with a rich resource for examining retail promotions for produce. The report is entitled "National Fruit and Vegetable retail Report" and is available on line at: www.marketnews.usda.gov/portal/fv.

Three major holidays have occurred so far in 2008, the lovers' holiday, Valentine's Day on February 14, Easter Day, celebrated this year on March 23, and Mother's Day, celebrated on May 11. Promotions linked to these holidays would tend to occur in the two weeks up to and surrounding the holiday. We looked at how promotional activity in each of those two-week periods varied from the average levels of promotion.

Comparing Promotions of All Fruits and All Vegetables
The first table shows the number of stores with ads for fresh fruits or fresh vegetables for each of the three holidays compared with the average for the January-May period. Fresh fruit ads got a modest boost for Valentine's Day and for Easter, but suffered a big dip for Mother's Day. Fresh vegetable ads were normal for Valentine's Day, but got a big boost for Easter and Mother's Day, two holidays that are associated with large family gatherings.

Number of Stores with Ads for Fresh Fruits and Fresh Vegetables, 2008

Period	Fresh Fruits	Fresh Vegetables	Total	Fresh Fruits
	#	#	#	%

Average	62,436	42,922	105,358	59.3
Valentine's Day	66,783	43,087	109,870	60.8
Easter	65,256	64,087	129,343	50.5
Mother's Day	52,444	64,408	116,852	44.9

Produce Items Favored for Holidays
In general, ads for apples and pears were sharply below normal for all three holidays. Ads for grapes received a boost for Valentines's Day, and especially for Easter, while ads for strawberries were above average for Easter and 31 percent above average for Mother's Day. Tomatoes and onions were featured most prominently for Mother's Day, but ads for both were 25 percent below normal for Valentine's Day. Ads for peppers got a 10 percent boost for Valentine's Day. Peppers may have a secret ingredient we don't know about.

Number of Stores with Ads for Key Fruits and Vegetables, 2008

Period	Apples	Pears	Grapes	Strawberries	Tomatoes	Onions	Peppers
	#	#	#	#	#	#	#

Average	2,771	4,4844	7,699	7,475	9,457	6,244	4,866
Valentine's Day	2,000	4,147	9,572	2,954	7,129	4,670	5,372
Easter	1,838	3,895	11,252	8,173	9,575	5,071	2,221
Mother's Day	1,243	2,692	2,008	9,800	12,281	10,152	5,166

Effects of Holidays on Promotional Prices
For products that are specially associated with a particular holiday, one would expect to see good bargains in the promotional prices offered. This was certainly not the case for fresh apples. Advertised prices were above normal for Valentine's Day and Easter and about normal for Mother's Day, but the number of ads for Mother's Day was half the normal level.

Advertised prices were lowest at Easter for Bartlett pears, grapes, conventional strawberries, navel oranges, bananas and organic bananas. The sharpest cuts in advertised prices for Mother's Day were for D'Anjou pears and conventional strawberries.

Weighted Average Advertised Prices for Key Fruits, 2008
(US$ per lb)

Period	Apples	Pears, Bartlett	Pears D'Anjou	Grapes	Strawberries	Strawberries, Organic	Oranges, Navel	Bananas	Bananas, Organic

Average	1.190	1.340	1.230	1.830	2.530	3.630	0.92	0.44	0.760
Valentine's Day	1.225	n.a.	1.275	1.905	3.015	n.a.	0.96	0.42	0.725
Easter	1.310	1.205	1.255	1.640	2.395	4.060	0.88	0.39	0.630
Mother's Day	1.180	1.570	1.135	1.990	2.165	3.555	1.02	0.45	0.835

Organic Premiums Substantial
The data allow us to compare advertised prices for organic and conventional strawberries and bananas. Advertised prices for organic strawberries averaged $1.10 per lb (43.5 percent) higher than advertised prices for conventional strawberries. The premium widened during both the Easter and Mother's Day promotional periods.

Advertised prices for organic bananas averaged 32 cents per lb (72.7 percent) higher than for conventional bananas. The premium was smaller at Easter, but widened for Mother's Day.

Unanswered Questions
Some of the differences in produce ads and advertised prices during 2008 holiday periods may have been due to unusual factors such as temporary shortages or surpluses of supplies. The impetus for produce ads may come either from the retailer or the supplier. The data do not enable us to determine which was more important for each item or each holiday. However, as a number of years of data become available, it will be possible to better assess when a boost in advertising effort or a reduction in advertised price are most beneficial to any produce item.

First published in the World Apple Report, Volume 15, No. 6, June 2008, page 5.

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