Merchandising apples is a dynamic topic, based not only upon the current crop but dramatic industry changes.
Originally printed in the January 2023 issue of Produce Business.
There is no single-best apple merchandising plan for produce departments.
“We have to approach every season based on what Mother Nature grants us, so some of the merchandising tactics can change, based on what the crop delivers,” says Brianna Shales, marketing director of Stemilt Growers, based in Wenatchee, WA. Stemilt works to help retailers understand the opportunities within a crop and suggests the most effective ways to shift their merchandising and promotions.
While saluting the industry adage there is no “typical” season, this year’s wintertime apple crop is certainly remarkable.
Washington State growers are producing less than 100 million bushels, which is down 4% from a year ago. Meanwhile, Michigan has a record apple production. New York State is up as well.
Part of Washington’s volume decline is attributable to apples being down a size or two from 2021. “That means we have more opportunities around bags, which actually is really nice because those are in high demand,” Shales says. The smaller fruit also allows Stemilt to really promote its “Lil Snapper” brand, which targets children who can’t eat a whole big apple.
Scott Swindeman, co-owner of Applewood Fresh Growers, Sparta, MI, indicates the Michigan apple crop is so big, the final numbers are hard to determine. This includes consideration that no one is exactly sure of how much fruit was left unharvested in the orchards. If forced to guess, Swindeman would say “Michigan produced 36 million bushels this year, but I’m not 100% sure.”
Diane Smith, executive director, Michigan Apple Committee, Lansing, confirms, “The crop is definitely larger than predicted. The crop size was initially estimated at 29.5 million bushels but based on conversations with industry members and looking at storage reports for this year so far, I’m thinking the crop size is closer to mid-30’s million bushels.”
Michigan growers enjoyed ideal weather in 2022, which worked extremely well for great fruit sizes. Large fruit size certainly impacts the final volume. Swindeman says each incremental fruit size for an apple increases the volume by 10%.
Varieties Impact Merchandising
Merchandising apples is a dynamic topic, based not only upon the current crop but dramatic industry changes.
The national apple industry understands that a great abundance of high quality, tasteful new apple varieties has made it difficult for retailers — and their customers — to decide which to promote and buy.
Retailers constantly tell Swindeman that they just don’t have enough display space for all, or even a good number, of the new apple varieties. The situation is compounded by other commodities also offering new, tasty varieties. All of which are fighting for retail display space. Berries, grapes, and various Mandarin citrus varieties all take good produce display space.
Jennie Strong, communications and outreach specialist for the Washington Apple Commission in Wenatchee, indicates that about 11% of the current Washington apple crop is made up of “other” varieties, which include branded, proprietary varieties. These varieties are limited to a few growers and/or sales organizations. Proprietary varieties provide retailers an opportunity to add a new and unique variety to their apple category and the percentage of this category in Washington apple production is trending upward.
“We’re constantly evaluating our mix of what varieties we have and what consumers are going to want five or ten years from now,” says Stemilt’s Shales. “That’s the thing with apples. You just can’t plant the orchard today and see it next year. It takes three or four years to even bring those trees up into production. And so we really have to be thinking about what attributes of apples are consumers going to want and then what attributes can we find in these new varieties that we can also produce the fruit on a commercial scale to good quality.”
Shales stresses that many factors are involved, “but we are trying to be ahead of the curve of what consumers are going to want to demand and aligning our variety next to that is essential. When it comes to a new variety, it takes time to develop that. You can’t just plant a new orchard and expect it to turn overnight. There’s marketing that goes into it. There’s promotion and a lot of investment.”
Swindeman says the special apple breeding programs came as “Everyone was looking for the next HoneyCrisp. Looking back, to when the club and managed variety craze hit, with growers, sales and marketing companies, there was a panic: ‘I don’t have a new apple in my program! I have to do something, or I’ll be on the outside looking in!’ They wanted the apple that would be the next grand slam. But it will have to be a heck of an apple to displace what’s on the market now.”
Growers of Cosmic Crisp in the West “went bonkers” in ramping up plantings, adds Swindeman. Now, “at the end of the day, it will be just another apple with added input costs. There are just too many varieties. The consumers are confused at the end of the day. The retailers are confused. We’re even confused, there are so many new varieties.” He adds that these are largely bicolor, so they look alike and have some differences in taste. But more education needs to be done to clarify taste opportunities to consumers. Swindeman says that education opportunities were lost during the pandemic as sanitation concerns canceled in-store taste demonstrations. He is unsure if such demos will ever return.
Swindeman recalls great retail buyer excitement a dozen years ago when SweeTango was introduced. Sweet, new, different and exciting, SweeTango was early amongst many varieties trying to move into market position of being the latest and greatest to take the apple business by storm. HoneyCrisp set the standard. Duplication of that popularity became the industry goal. But so many contestants entered the race that retailers and consumers were soon overwhelmed. Meanwhile, growers invested millions of dollars in breeding, then producing club and proprietary varieties. One of the main things that plagues the apple industry is that the shipping and retail sides don’t tell flavor profiles.
“There are way too many varieties out there, which everybody created,” observes Brian Coates, Applewood vice president. “As if the apple section wasn’t already jammed, in today’s produce sections, new varieties of berries, tropical melons and grapes are also offering diversity to consumer palates, and available year round now. There is less and less shelf space available in the fall and winter months. So, retailers have to be selective.”
But bottom line, Coates notes, is that the apple industry has created many bi-colored apples. They all taste great. Importantly, he adds that this large offering also has a variety of tastes.
Packaging Addresses Multiple Needs
The pandemic brought another consideration to apple merchandising. But by late 2022, a fair amount of consumer concern over COVID contamination had receded, Coates says. Bulk displays regained acceptance. Still, “COVID changed the landscape a little.” He urges that merchandisers build fruit sales with the offer of two- or three-pound bags, pouches, or totes, which are good for shoppers who want to hurry in and out of the store. Such packaging also serves online shoppers and saves those packing orders from the need of hand selecting three or four individual apples. Coates notes it’s important to display packaged product near bulk displays, so customers need not wander a produce department to decipher apple offerings.
Stemilt’s Shales acknowledges that there is a very clear increased demand, and sales, of packaged produce. Five years ago, 80% of apples were sold bulk and 20% were sold in some package, whether that was a bag or a club store consumer packet.
“Now, it’s 60% bulk and 40% bags. And it’s getting closer to 50-50 every year. The challenge is that not all the apples we grow can fit into a bag efficiently and effectively. We grow small ones, and we grow big ones. The smaller ones work well in pouch-style bags. It’s hard to get bigger fruit in that type of package,” Shales says.
In response, Stemilt has developed a four-count package, weighing about two pounds, for bulk size and larger sized apples. The new, 100% recyclable and sustainable paperboard pack is called EZ Band. This is printed in full color to carry a UPC and product information, delivering something new to retailers to provide the consumer with that convenient easy grab-and-go pack. A paper band goes across the top of the four-count box. This is large enough to secure the fruit but allows consumers to see the apples. The band is printed separate from the box’s bottom. The band, then, indicates product-specific information, such as an “organic” designation, as needed. But the design also allows the cost efficiency of one standard Stemilt carton bottom.
While protecting the fruit from bruising and consumer handling, the EZ Band container meets retailer needs for in-store labor savings, because a dozen cartons are packed in a Euro-tray, which can easily and quickly be set onto displays.
At Applewood in Michigan, Coates encourages Euro cartons for apples. He urges that retailers try merchandising apples from 27-pound Euro cartons over displaying traditional 40-pound apple cartons. Shrink will be reduced, and the labor of refurbishing fruit in the larger case will also go down. Large and small retail chains are increasingly moving to the Euro carton, he adds. Coates credits the Washington apple industry with introducing the idea 20 years ago.
Apple Merchandising Lends Stability
In December, Shales reminded us that “there is a nice stability that apples provide when it comes to merchandising. They’re always in season. Particularly at this time of the year. Retailers are always ready for promotion on some level and so there’s a lot of things that you want to help with that frequency of promotion, and Stemilt keeps the category healthy through monthly promotions of multiple varieties to keep volume and sales going in the right direction.”
“Consumers have different taste preferences,” Strong observes. “Some people like the tartness of a Granny Smith while others have an extreme sweet tooth and prefer a Fuji. There’s a taste and texture for everyone, which is what makes having so many diverse varieties so great. Many of the club varieties are still in very small production, so they will be in retail for a shorter time. Our focus, as the Washington Apple Commission, is on promoting generic varieties as we try to represent all growers equally. Occasionally we can help support a proprietary variety in a promotion alongside generic varieties when it makes sense to do so and there are enough of them in a market.”
The Michigan Apple Committee is kicking off the 2023 season emphasizing that Michigan-grown EverCrisp which has great flavor coming out of storage, says Smith. “It is a challenge in our industry as growers work to produce fruit that consumers will enjoy, and also not overwhelm the consumer. Retail and consumer demands have always been a part of making production decisions and will continue to do so.” MAC is a resource for consumers and retail partners, working to educate them on the many varieties available, while also keeping the production side of the industry apprised of consumer preferences.
This fall, the committee offered new point of sale materials, sized to be produce department friendly and help educate the consumer on usage and taste profile of each variety. Smith adds that MAC also can collaborate with retail partners to create custom signage.
In terms of popularity and growth, Smith says, Gala continues to be Michigan’s number one variety in volume with standard varieties Honeycrisp, Cripps Pink, and Fuji on the rise along with managed, trademarked varieties Sweetango and EverCrisp.
Michigan Apples works with retail marketing departments to create extensive programs that include digital coupons and loyalty card incentives. Online shopping tactics have shown success in increasing sales the past few years as digital marketing opportunities are more readily available. The commission can tailor programs to fit with retailers’ individual marketing plans. Customized signage, meal tips, demonstrations and samplings can help put product in shopping carts and keep customers coming back for resources and information they need.
Stemilt’s Midwest and East Coast merchandising managers, supported by Wenatchee headquarters, develop promotion plans with individual customers. Merchandising strategies include signage, in-store demos, and pop-up display bins. The company’s social media professionals also work with retailers to provide digital content for retailers’ consumer education. “That’s a really good way to help introduce things,” Shales notes.