It takes color, flavor to rise to the top of a crowded apple market.
Originally printed in the August 2022 issue of Produce Business.
The Space Needle in Seattle Center. The San Juan Islands. Olympic National Park. These are among the top sites to see on a trip to Washington State. But, for apple lovers, a must-stop spot is in Vancouver, WA. Here, in Old Apple Tree Park, a plaque marks a gnarly, fenced-in trunk as the oldest apple tree in this territory. On it is written that ‘the apple culture of the Pacific Northwest began at Fort Vancouver in 1826.’
Fast forward nearly two centuries, and Washington State is No. 1 in the U.S. in apple production. Last season, 2021/2022, the state’s growers harvested some 118.3 million 40-pound cartons of fresh market apples, according to the Washington State Tree Fruit Association (WSTFA), based in Yakima, WA. This represents some two-thirds of the U.S. apple production. It’s no surprise that Washington apple growers, now based 200 to 300 miles northeast of Vancouver from Yakima to Wenatchee, are among the movers and shakers of what’s new when it comes to varieties, packaging and helping retailers to sell more.
“Washington apples are by far the biggest contributor in the apple category. We do offer items from other growing regions seasonally, but Washington is always the staple. We offer Washington apples weekly as long as they are available,” says Mark Hendricks Sr., produce director at Pyramid Foods. Pyramid Foods, which is headquartered in Rogersville, MO, has nearly 50 retail stores, and banners include Price Cutter, Save-A-Lot and Country Mart.
APPLE PRODUCTION POWERHOUSE
Washington State is the leading apple production region in North America for a couple of reasons, explains Don Roper, vice president of sales and marketing for Honeybear Marketing LLC, a subsidiary of Elgin, MN-based Wescott Agri Products, with sales offices in Yakima and Brewster, WA.
First, Roper explains, eastern Washington has all the key production characteristics necessary to grow high-yielding apples — an abundance of water, sunlight, affordable power and available and productive growing sites.
Secondly, “innovation in both growing practices and varietal development continue to help Washington state apple producers stay on the forefront of product quality, production and profitability per acre,” Roper adds. “Logistically, while far removed from some of the largest markets in North America, the high-yielding orchards provide a very strong cost advantage over regional growing zones throughout North America.”
An unofficial estimate of the upcoming crop that came out of a Washington Apple Commission (WAC) board meeting in May was 100 to 115 million 40-pound boxes of apples.
The 2022 Washington apple crop looks to be a bit lighter in volume than last season, according to Chuck Sinks, president of sales and marketing for the Sage Fruit Company, Yakima, WA. “While we experienced extreme heat late in the 2021 growing season, this year, a cold spring, and late winter storm hurt bloom. Sizing and quality, however, should be good for the season.”
A dry air climate with low pest pressures makes Washington the U.S. leader in organically grown apples as well.
Approximately 12% to 13% of Washington’s fresh market apple crop is organic, although organic production in the state is leveling off, says Mac Riggan, director of marketing for Chelan Fresh, in Chelan, WA. “This is especially true for more mainstream varieties like Honeycrisp, although there is higher growth in organic now for newer varieties like Cosmic Crisp.”
Nationwide, Riggan adds, organic roughly makes up 10% to 15% of apple sales. “So, we’re in a good spot on supply and demand.”
Organic Gala and Fuji don’t fall too far behind organic Honeycrisp, adds Sage Fruit’s Sinks. “Organic Honeycrisp is a high-end consumer favorite, which has an excellent ring at the register. On the opposite side of that though, organic Gala and Fuji are an excellent option for the everyday organic consumer because they are more price friendly.”
Organic Envy apple production is set to double year over year for the next three years, according to Roger Aguirre, director of apples and pears for Oppy, headquartered in Coquitlam, BC. “There is a strong demand for organics that only keeps increasing. And, that demand is transferring into packaging, too. Not only are consumers looking for more organic bulk apples but bagged, too.”
The Washington apple industry has been going through a variety evolution. Five years ago, the iconic Red Delicious made up nearly one-third (29.4%) of fresh apple production, according to the WSTFA’s 2020/21, A Statistical Review of Washington State Fresh Apple Crop. For the 2020/21 season, that percentage dropped to almost one-fifth (18.6%).
This same season, the top five varieties in terms of fresh market production were: Gala (23.2%), Red Delicious (18.6%), Fuji (13.2%), Honeycrisp (12.2%), and Granny Smith (11.8%). Together, these five varieties represent just shy of 80% of Washington’s apple production.
“We have a diverse customer base with many older customers who still buy plenty of Red and Golden delicious apples. But the biggest movers for us include Honeycrisp, Gala, Granny Smith, Pink Lady, and Fuji,” says Pyramid Foods’ Hendricks.
Similarly, Honeycrisp is the best-seller at Morton Williams Supermarkets, says Marc Goldman, produce director at the 16-store chain based in Bronx, NY, adding his stores mostly sell Washington-grown apples except for varieties grown in New York like McIntosh. “Honeycrisp sells 2:1 any other variety for us. After that, it’s Gala and Fuji.”
Envy variety apples, adds Goldman, “have become more popular in the last few years.”
Honeycrisp continues to be the leading total dollar sales generator on the retail apple deck, accounting for nearly 50% of retail sales, says Honeybear Marketing’s Roper. That said, “from a variety standpoint, the Honeycrisp crop out of Washington will be down about 10% from last year’s record crop. Fujis and Grannys will be down a bit too due to weather and biennial production. We also anticipate Galas to be close to the same as last year.”
Looking ahead, Dan Davis, director of business development for Starr Ranch Growers, Wenatchee, WA, has seen Gala surpass Red Delicious in volume, “and now we’re starting to see cannibalization of Galas in favor of newer varieties. For example, this year we’re expecting a doubling of the crop of Cosmic Crisp, from 3.5 million to 7 million cases. This volume is increasing quickly, making it more promotable, and thus quickly becoming one of the driving forces in the apple category.”
Up-and-comer varieties at Pyramid Foods are Cosmic Crisp, Sugar Bee, Jazz, and Koru, according to Hendricks. “We recently picked up Sunrise Magic and have seen some nice movement with that fairly new variety.”
Like Cosmic Crisp, Sunrise Magic was bred at Washington State University. It’s a classical cross of Splendour and Gala varieties, with sweet flavor, crisp texture, and orange-red blush over a yellow background appearance.
“We will see an increase in the volume of Sunrise Magic and Cosmic Crisp,” says Sage Fruit’s Sinks, whose company is one of the licensed growers.
This year marks the second season for commercial production of Karma, a Honeycrisp and Fuji/Golden Delicious mix exclusively offered by Starr Ranch Growers.
“It’s a red bi-color apple with flesh that’s naturally resistant to browning. The taste is more tart, less sweet. The flavor changes after harvest in CA (controlled atmosphere storage), therefore we bring it to market post-New Year. We’ve partnered with one Northwest chain to offer the Karma and look to expand that,” says Davis.
New, too, from Washington State, although introduced to the market in 2020 by Hess Brother’s Fruit Company, in Lancaster, PA, is the Wild Twist.
“This is a Pink Lady-Honeycrisp cross. It’s new to us and we’ll be working to increase supply, especially for West Coast markets,” says Skyler McFeeley, business development manager for the Rainier Fruit Co., in Selah, WA.
This fall, Honeybear Marketing will test market its newest variety, Honeymoon, which the company says is a creamy yellow variety with tropical flavors and a distinct nutty finish. “We are at the beginning of our production, so more to come over the next several years as this variety comes to market,” says Roper.
Looking ahead, “we also may see additional club apples come on the scene, but it will be those that offer the category something truly unique (color, flavor, etc.) that will rise to the top of what is a very crowded apple environment,” says Brianna Shales, marketing director at Stemilt Growers LLC, in Wenatchee, WA.
Bulk apples will always have a place on the shelf, according to Sage Fruit’s Sinks, and the company packs a majority of its product in 40-pound, tray pack boxes.
“Consumers like to have control over the number of apples or the number of pounds they are purchasing,” Sinks says.
However, Sage Fruit has seen a considerable increase in demand for high-graphic pouch bags and private label bags, so it has incorporated several assorted sizes. For instance, Sink says, “we now pack a 2-pound Honeycrisp pouch to hit a price point at the register that is more appealing to the consumer.”
Clean department policies in some produce retailers eliminate the use of point-of-sale materials. Therefore, the packaging is doubling as a billboard for advertising.
“Jazz is currently partnered with an upcoming animated movie that’s fun for the whole family, to which we can offer thematic packaging that is quite impactful on the shelf. We offer 2-pound pouch bags, and poly bags in 3-, 4- and 5-pound value options, which includes thematic Kwik tags too,” says Audrey Desnoyers, Oppy’s director of business development and key account management.
Sustainability is a huge topic in all produce packaging, including Washington apples.
“We are focused on changing the popular pouch bag packages to a recyclable plastic material that is certified by the How2Recycle labeling program. It’s an evolution, but one that we feel is important to make to continue offering retailers and consumers the convenience that packaged apples provide,” says Stemilt’s Shales.
New, CMI Orchards, in Wenatchee, WA, is introducing its sustainably oriented campaign called “Relax.”
“We want customers to focus on the fruit, and not worry about the vehicle the fruit is packed in,” says Rochelle Bohm, brand manager. “Relax is an educational campaign whose goal is to make it easier for consumers to navigate complex packaging information while in-store and make smart purchasing decisions. The information is clearly written and easy for consumers to read and digest. The information is on the pack and our website.”
MERCHANDISING & PROMOTION
Washington apple growers have promoted their fruit directly to retailers since 2003, a change from this being the job of the WAC.
“We do not believe in a ‘one size fits all’ approach to our marketing programs,” says Sage Fruit’s Sinks. “We work closely with our retail partners to build programs tailored to fit their needs. What works well for one retailer might not fit other retailers’ goals for their apple category. Our retailers seem to like this approach.”
The core of successful merchandising in-store is the display.
“The best way to call attention to a specific variety is with an eye-catching display. We also offer display bins, which are an excellent addition to creating impactful lobby displays or water displays from the apple set. Devoting end caps for new apple varieties is a great strategy to encourage impulse purchases for a premium item as well, making them hard to miss in those high traffic areas,” says Oppy’s Desnoyers.
Enticing the customer to try a new variety is something Hendricks actively promotes at Pyramid Foods. “We did a fun tasting by giving away a Sugar Bee apple with each online order for a couple of weeks. One apple each went in one bag of an online order. They were in small boxes with information on the apple and the company growing them. We now have a nice strong retention of customers either looking for them in online orders or in-store when they shop.”
CMI’s new Flavogram program is a way to encourage consumers to try a wider variety of apples. Ready-to-use or customized in-store signage or digital assets that can be linked to platforms like Instacart employ a color bar to show apple varieties on a continuum of tart to sweet. The copy, akin to the comparisons of different wines, also points out additional flavor nuances of each variety from the first bite to finish.
Apples are much more in flavor than a linear sweet or tart, says Bohm. “The combination of sugars, acids, density, aroma, and flavor each makes for a unique eating experience. Flavogram helps identify this to the consumer.”
Cross promotions are another great way to incite trial.
“We received rave reviews from our recent demos, which offered Envy and Tajin taste-tests, along with caramel and peanut butter partners, which also make great complements to apples,” says Oppy’s Desnoyers.
Similarly, Hendricks runs an apple in almost every weekly circular ad throughout the year, and this is normally complemented by a special or expanded display. “We usually include our best-selling caramel apple dip, Seneca apple chips, and a deli cheese and non-food apple corer or paring knives,” he says.
With rising prices in mind, says Honeybear Marketing’s Roper, “we are encouraging our retail partners to look at the category and see where we can pull more value out of the manifest for the consumer. The consumer dollar spend on produce is going to be less in the near term. A couple of areas we are exploring include ‘Bargain Bags’ and ‘Value Days.’ By expanding the use of our manifest, meaning using more apple sizes in a bag or some lower color or grade apples, we can help reach certain price points that bring increased value to the consumer.”