Originally printed in the October 2019 issue of Produce Business.
Keeping up with this ever-changing fruit category is paramount to your department’s success.
For such a mature produce category, the apple industry continues to show a vibrant ability to innovate and change.
Growers are shifting to newly popular varieties, such as Honeycrisp. Breeders are working on even newer versions of the apple, and shippers are stepping up their games to deliver this more interesting and delectable fruit.
“New acreage continues to be added on, along with younger blocks of trees in the orchards coming into production this year,” says Scott Swindeman, co-owner of Applewood Fresh Growers, Sparta, MI. “A second packing line will more than double our capacity.”
As growers, breeders and shippers get ready for dynamic change, here are seven factors for retailers to consider as they try to keep up.
1. Give Apples Their Due
They have been a mainstay in the produce department for so long, it is tempting to neglect apples and fail to give the Honeycrisp respect … and space.
“Apples are between 5.5% and 8% of a produce department’s sales,” says Roger Pepperl, marketing director at Stemilt, Wenatchee, WA. “Make sure that display size, location and the right mix is in the stores every day. Support new varieties with multiple ads, and use the ad as an excuse to educate the customer.”
The amount of space you can profitably devote to apples and the look of the display are worth discussing.
“The display depends on the size of the retailer and their shelf space,” says Cynthia Haskins, president of the New York Apple Association, Fishers, N.Y. “If they have an 8-foot section, they will have a smaller display than if they have two 8-foot sections, or a patchwork of smaller displays. Large displays always capture more attention.”
Although the numerous varieties give apples a fairly long harvest window and they can be brought out of storage year-round, the optimal size of a display varies quite a bit on the season.
“Time of year is a major player in the decision,” says Jeff Cady, director of produce and floral at Tops Friendly Markets, Williamsville, NY. “Fall is apple season as new-crop apples are harvested daily right here in upstate New York. Consumer buying patterns change, and summer-type fruits take a back seat to apples and other fall items.”
The display is best laid out with an understanding of who is likely to buy apples, and how they travel through the store.
“I feel it is important that when the consumer comes in to buy, mainly mom, they are on a mission,” says Don Roper, partner/owner and vice president of sales and marketing for Honeybear Brands, Elgin, MN. “Know their route through the store. They are busy with kids and schedules, so, to get them to slow down and learn about a new variety is very taxing on an extremely overloaded schedule.”
2. Pay Attention To A Changing Leaderboard
It is important to stay abreast of the new list of top apple varieties and to monitor the continuing emergence of new leaders.
“There is more change in the varietal offerings than at any time in history,” says Brenda Briggs, vice president of sales and marketing, Rice Fruit Company, Gardners, PA. “For our growing region, CrimsonCrisp, Evercrisp and Ambrosia are part of new plantings, along with Honeycrisp, Gala and Pink Lady.”
Honeycrisp has risen up the charts faster than any apple variety ever, and many of the new offerings are crosses with this new standard bearer.
“According to current Nielsen scan data, Honeycrisp and Gala sit at the top when it comes to volume and sales dollars, while Ambrosia, Envy and Jazz are the top-three branded varieties in the United States,” says Danelle Huber, marketing specialist at CMI Orchards, Wenatchee, WA. The only year-round supplier of Honeycrisp apples, Honeybear Brands, which harvested its first Chilean crop in January, still reports staggering growth of this star variety.
“Honeycrisp production continues to climb with overall domestic production estimated to be around 30% more than last year’s crop,” says Roper. “Most of the overall U.S. increase is occurring in Washington State, as our crop should be at least 35% to 40% more than last year, while the Midwest and Northeast production has been relatively stable, with a minor increase of 5% to 10%.”
Sales figures may even underestimate the popularity of Honeycrisp, because growers are still catching up with the unprecedented increase in demand for this variety.
“Honeycrisp is the fastest-growing item and is hampered only by volume constraints in the orchard alone; as more are grown, they will sell fast,” says Pepperl. “Gala is super popular in the United States because of available volumes, and it’s a well-known variety.”
The supply of Honeycrisp, both conventional and organic, should increase again this year.
“I think there is a lot of young Honeycrisp acreage that will continue to increase production,” says Matt Miles, account manager and organic program coordinator at Washington Fruit and Produce Co., Yakima, WA. “This year we will have 14 million boxes of conventional Honeycrisp and 2.5 million of organic.”
3. Newcomers Are On The Way
Other fruit and vegetable growers must turn green with envy when they hear the commotion over what seems like an endless parade of new apple varieties, which show a remarkable ability to create buzz for a familiar category.
“Customers are hungry for variety and want to try new and exciting flavors. Branded apples, such as Ambrosia, Kiku, Kanzi and Envy continue to move up the popularity scale with consumers,” says Huber. “We’ve seen a shift away from the regional and core varieties toward the higher-flavored, branded ones.”
One new variety coming out of Washington orchards could have cosmic significance.
“This year brings with it the release of Cosmic Crisp apples,” notes Chuck Sinks, president, sales and marketing for Sage Fruit Company, Yakima, WA. “The initial commercial crop will have limited availability. However, the volume will continue to grow exponentially in the next five to 10 years. Cosmic Crisp will not be available for shipping until after Dec. 1.”
Some industry insiders expect this new entry, a promising Honeycrisp cross, to make news in the next few years.
“Cosmic Crisp is the newest variety to hit our orchards and packing lines, and within 10 years will become one of our biggest items based on volume alone,” asserts Pepperl at Stemilt. “Items such as Rave, SweeTango and Pinata are also super popular but with relatively low volumes of acres, which makes them more of a special item.”
On the other side of the country, New York growers are also enjoying success with two new varieties.
“The volume of SnapDragon and Ruby Frost apples is growing, as the trees come into production and the growers plant more,” says Haskins of the New York Apple Association. “We always have our favorites. We have a large following for McIntosh. New Yorkers love them, and new consumers try them and ask where they can get them. But SnapDragon and Ruby Frost are also gaining in popularity.”
Not to be outdone, Midwestern apple leaders are also introducing their own varieties.
“The exceptionally sweet, beautiful ruby-red Kiku brand apples have earned a very loyal following,” says Briggs of Rice Fruit Company.
Consumers are already asking when and where to find these meticulously curated apples grown by a select group of orchardists. Within the United States, Rice Fruit Company, CMI Orchards and Applewood Fresh Growers manage KIKU brand apples, and retailers can plan ahead for year-round availability with imports of this global brand.”
SweeTango is another specialty coming out of the Midwest starting to make a name.
“Applewood Fresh Growers is the leader in managed varieties — SweeTango, Kiku, Kanzi, and Rave in the state of Michigan,” says Brian Coates, vice president for sales at Applewood Fresh. “We expect a production increase of 20% over the past year for SweeTango.”
Cohen Produce is working with an Eastern grower on a new proprietary variety — so, stay tuned.
This exciting parade of new apple varieties is beginning to turn former standard bearers into afterthoughts.
“There are fewer Red Delicious apples since they begin to wane,” says Sandy Cohen, president of Cohen Produce Marketing, Hamburg, PA. “They are good for export but our consumers are more discriminating. They want more flavorful apples like Honeycrisp, Fuji and Gala.”
But Red Delicious apples are not alone. There are other once-popular varieties that are still available but not terribly popular.
“We will see older varieties such as Braeburn, Jonagold, Cameo, Red Delicious and Golden Delicious all decline in planting,” says Sinks. “In fact, a large number of trees is currently being cut down to make room for the newer varieties.”
Many of the newer varieties are crosses intended to make Honeycrisp more amenable to storage after harvest, or easier to grow.
“The Honeycrisp’s ‘delicate cell structure’ provides that crisp snap when it is cleaved from the apple, giving the customer an immediate sense of crisp and fresh,” says Honeybear Brand’s Roper. “A few apples out of the genetic pipeline from Honeycrisp that demonstrate these characteristics include Pazazz, SweeTango, First Kiss, Juici, Cosmic Crisp and Evercrisp. At Honeybear, we have most recently commercialized two Honeycrisp crosses — RiverBelle and Pazazz. We are in the early stages of introducing First Kiss — (a University of Minnesota developed variety) — only grown in Minnesota, but to be distributed nationwide. This early harvest Honeycrisp cross will put a real kick into the start of apple season.”
Retailers who want to incorporate these new varieties are advised to commit to a sustained merchandising campaign.
“Once you have that great variety, then the consumer has to be brought into the education and trial process with the variety,” says Roper. “This is slow-going work — it does not happen overnight. For example, Honeycrisp is 27 years old this year. I think there are some real good new varieties out there — Envy is a good variety for the folks who like sweet apples; Pazazz is for the apple connoisseur — apple complexity of sweet and tart at its best. Opal does a nice job on the apple deck due to its ‘color.’ Sugar Bee will be another sweet apple option, and Cosmic Crisp will be successful because it is a strong yielding apple that will store well. Evercrisp has the sweet flavor profile and will be grown locally across the United States.”
It is worth the time to pay attention to the new apple varieties — to ask suppliers for the latest information — and to thoughtfully develop a merchandising program.
“Don’t bring in new varieties for short in-and-outs,” notes Pepperl. “They need to be there to support repeat sales if they are going to work.”
4. Organic Still Growing
Growers and shippers expect demand for organic apples to continue increasing at a healthy pace, and, fortunately, the supply of organic apples out of Washington is poised for a great leap forward this year.
“The organic sector continues to grow,” says Miles of Washington Fruit and Produce. “We’re going to see another increase this year. The projection is 18 million organic boxes, which is up from 14.2 million in the 2018 season.”
The share of organic in the Honeycrisp variety is unusually high, according to Roper, and growth of organic is even faster.
“Organic production of Honeycrisp is projected at about 2.5 million cases, which is a 35% increase over the past year and represents approximately 12% of the total Honeycrisp crop in the United States,” says Roper.
Supply of organic apples should ease a little in 2019, and perhaps for the next few years as well.
“The organic growth operates in cycles because certification takes three years,” explains Miles. “Going back to 2015-2016, the premium for organic was very high, and it encouraged a lot of growers. It is back down to a 30% to 40% margin FOB, which I consider about normal. The market at retail for organic continues to be very strong.”
Retailers are advised to strongly consider organic heavy produce buyers.
“Organic shoppers feel ignored and will change shopping channels for someone who supports organic promotion,” notes Pepperl. “Organic apples need more promotion. Remember the organic shopper is the best produce shopper in the store. Don’t sell smaller packages or quantities of fruit to them.”
5. Get Help From Suppliers
The category is so complex and ever-evolving that retailers count on suppliers for a steady flow of information and help developing a merchandising program.
“Use local or regional signage, make available both bag and bulk fruit options,” advises Antonia Mascari, vice president of marketing at Applewood Fresh Growers. “Utilize variety-specific point-of-sale cards to provide information to the consumer. Merchandise fruit based off the flavor profile from sweet to tart, and provide signage for the consumer so they know what variety fits their flavor preference.
“We have marketing efforts. We offer many programs to help customers propel their apple sales, and we will tailor them to fit their brand,” says Mascari.
Experienced shippers can offer help arranging the different varieties for maximum visual impact.
“Color breaks that separate apples by their appearance should be exercised,” advises Stemilt’s Pepperl. “Even bi-color apples have different looks. Use Golden Delicious and Granny Smith as an obvious color break. Honeycrisp is a way different red color than a Gala or a Red Delicious. Build ads with multiple varieties.”
Some suppliers have developed merchandising programs targeting a particular demographic or time of the year.
“From our American Dream program, which focuses on supporting veterans, military members and their families, to our Flavors of the World program, which offers retailers a fantastic platform for their customers to taste apples discovered in unique world origins (and that are now grown in Washington), CMI tries to keep the category fresh and exciting all year long,” says Huber.
In addition to the shippers, some industry groups also offer help with merchandising programs.
“Last year, we launched our new logo, and we have a new poly bag, a new shipper and new point-of-sale material,” says Haskins from the New York Apple Association.
Help from suppliers can be particularly important in developing a campaign to introduce consumers to one of the newer varieties.
“We have seen good success when we have our retail partners promote Pazazz or a new variety for an extended period of time, so there are the repeat impressions at the store. If the consumers don’t see the variety when it is first promoted, they get another chance to experience the variety somewhere down the line,” says Roper.
6. ‘Local’ SELLS
The importance of a buy-local apple program varies quite a bit depending on the region.
“The local movement is crucial, and at the center of our partnership with retailers,” says Briggs of the Rice Fruit Company. “In the larger picture, production of food in close proximity to population centers could be considered a very important piece of sustainability and environmental responsibility.”
Growers in places such as New York, Pennsylvania, or Michigan, however, rely quite a bit on the local appeal of their apples.
“We have a lot of folks on the West Coast,” says Haskins. “The market is local, regional and national. Of course we are preferred in the Northeast.”
Washington apples, however, travel well, and a local campaign might not matter as much as it does for some other apples.
“Apples from Washington are shipped all over the world,” says Sinks. “In a way, consumers are really driving the fresh and locally grown marketing perspective. If they are from an area that has locally grown produce, they want to know they are purchasing products that are grown in their region — they’re supporting the local economy.”
7. 2019 Looks Like a Good Crop
Although there will be regional differences, the overall national harvest, led by Washington, looks to be strong this year.
“So far, we have experienced a relatively mild summer, though we are seeing a rise in temperature for the month of August,” says Sage Fruit’s Sinks. “Due to our prolonged winter in the Pacific Northwest, harvest will be slightly later than last year, but only by a few days. The weather in the spring was ideal for promoting cell division, and the mild weather and cool nights of the summer have brought on good color of the fruit. Crop size will be a bit larger than last year. Overall, sizing looks to be good, with the exception of Galas.
“We think Galas will run extremely small this year. This year we will have a sizeable crop with exceptional quality and excellent marketing potential,” adds Sinks.
The outlook is also strong for the harvest coming out of Michigan.
“Overall the crop looks good — volume should be above last year,” says Mascari of Applewood Fresh Growers. “Fruit sizing will be bigger on most varieties this year, and quality looks very nice. Honeycrisp is the one variety that looks to be down, not only in Michigan, but in the Eastern states, as well. It could be as much as 25% to 30% down from last year’s numbers.”
New York may be down a little from recent crops that set or approached record yields.
“We’re down about 7% from the past year, but we should be around our five-year average,” says Haskins at the New York Apple Association. “The crop is looking good. We’ve had good weather with some heat and some rain. It should be more than 31 million bushels.”
Most of the increase in Washington will be varieties that are becoming more popular.
“The crop is much bigger in Washington this year,” says Pepperl. “The gains are in Honeycrisp, Granny Smith, Rave, Cosmic Crisp and organic apples. These are all high-demand items, so, ‘the large crop’ stories are overblown, as the crop is filled in with items we’re short on. This will be a good crop to sell.”