Poor growing conditions and low crops across the northern hemisphere have restricted supplies from many regions, while agricultural commodity and fuel prices have risen considerably – a combination of factors that have led to price hikes in the top-fruit category.

Retailers have struggled to get hold of the required volumes of certain varieties such as English Cox and Bramley, as well as Braeburn, according to industry insiders.

As a result, the overall top-fruit sector is at best static or declining in overall consumption. Luckily, the premium apple sector continues to deliver, says James Simpson, CEO of Adrian Scripps. 'Apples such as Pink Lady, Jazz and Kanzi continue to grow their share of the sector. This perhaps suggests that consumers are prepared to pay for something that delivers quality, especially flavour and texture.'

At the same time, the discounters are clearly benefitting from the current economic climate, overtrading significantly, and the big players are also ensuring they have an offer available at all price tiers. It all points to the 'two nation' situation as highlighted by Kantar Worldpanel director Ed Garner.

Waitrose, with its Essentials range, has successfully tapped into the trend for shoppers to split their weekly purchases between the premium retailer and another store. 'Value is key,' explains Simpson.

'Some consumers are prepared to pay for premium if it is perceived to be value for money because of the quality. Other consumers continue to look for value by moving retailers or product ranges. The core lines in some stores may suffer due of this.'

But are higher retail prices sustainable long term? It depends, says Simpson, on whether the consumer perceives there is value for money. 'Quality is important and increasingly so is provenance. On both counts English apples and pears can deliver, even in a year when the crop is short.'

Producers say that supermarket promotions need to reflect the crop and the availability, and Simpson feels £1 deals are difficult to support in the top-fruit sector at this time. 'Comparison with other £1 deals in different categories can be inappropriate,' he points out.

There is a general feeling in the industry that returns to growers must match retail price increases. 'UK agriculture is profitable in years when the crop is short and currency works in our favour. This is the situation we have this season, however going forward profitability of the producer must remain important to all in the supply chain,' says Simpson.

Mark Culley, managing director of OrchardWorld, points out that while the Kantar figures cover the last 12 months, there has also been a much higher increase in value during the last quarter.

'Volume is incredibly difficult to monitor – various promotional activities have changed which could have an effect on consumption,' he says.

Culley thinks apples are still 'excellent' value for money and not expensive compared to other fruits. 'The consumer will always demand good quality at affordable prices,' he says, but predicts less aggressive promotions going forward because of volume shortages.

'Overall we need an increase in consumption to drive category growth. One of the key facts in top fruit is however many new varieties are launched, none of them increase consumption; the reality is new apple varieties are being purchased by original apple buyers.'

In terms of positive trends, Culley thinks the success of English apples is down to several factors. 'The customer is being given a product that ticks all the boxes regarding locally grown, fewer food miles, etc.'

He also points at the success of Pink Lady internationally. 'This is a brand backed by a great PR campaign but fundamentally is a fantastic product.'

In other news the debate over pear cider – and whether it should be called that at all – has been reignited. The success of Bulmers, Magners and Kopparberg has resulted in a 50 per cent rise in cider sales in the UK over the last 10 years and brought the issue back to the fore.

Members of the Campaign for Real Ale say cider is made only from apples and that the industry should stick to the traditional name 'perry' for the same drink made from pears. —

WHAT'S IN STORE?

English top-fruit growers are investing in new storage technology to boost the chances of increasing volumes in future. FPJ reports

English apple storage has changed dramatically over the last half a century, with market forces dictating the need for investment in new technology.

Research conducted early in 2012 concluded that there is an estimated 45 per cent shortage of economically viable fruit storage facilities in the UK. Working with AC Goatham & Son and Landseer, ICA was part of a nationwide project evaluating storage potential, both in the short term but also with an eye on the increasing volume of homegrown fruit.

With an industry-stated aim of a 50 per cent market share and also the increasing use of on-farm facilities for southern hemisphere product assessment, serious improvements have had to be made. At current planting rates, by 2016 the UK should be growing 800,000 bins of fruit (273,000 tonnes); as of mid-2012 there was a 529,500 bin capacity of usable storage that will be economic to run in 2016.

Two such companies that are working hard to bridge this facilities gap are ICA and its sister company STS Refrigeration.

New builds in the last 12 months alone have delivered 25,000 bin capacity of new top-fruit storage, with 3,500 bin capacity of refurbished storage to the sector, spread across 10 sites. One of the major contributing factors in store performance improvement in the last 20 years has been the move away from polyurethane and polystyrene panels to insulated panel systems, such as those made by Kingspan.

CASE STUDY: HYCOOL INSTALLATION FOR AC GOATHAM AT FLANDERS FARM

The 12 CA stores at Flanders farm use the energy-saving secondary refrigeration system based on Hycool 20, a fluid that is efficient, non toxic, biodegradable and food safe. AC Goatham has experience the secondary system – which will in time replace the older DX refrigeration systems, which have a much more harmful effect on the environment at other developments across their business.

'We have seen electricity bills fall by between 35 and 40 per cent,' said senior partner Clive Goatham.

CASE STUDY: NEWMAFRUIT

With company production at 32,000 bins and rising, the pressures of maintaining efficient storage facilities is at the forefront of development at the Chartham site of Newmafruit Farms. With significant savings of between 30-40 per cent on farm made in the last few years through cost effectiveness, time management and efficiencies, Mike Barnett and his team turned their attention to potential savings in the CA store facilities.

The first retrofit project gave an energy saving of 35 per cent on a 3,000t storage unit. The second project, for the high-traffic racked storage area, required an initial investment of £11,480 – the energy bill for this area was reduced by £10,976 in the first 12 months, meaning payback was in 13 months. With the retrofit of the Danfoss and Hycool systems, structurally sound stores increase in productivity and contribution to the business.

So what does 2013 bring for fruit storage? Experts say technological advances mean we will see a further lowering of oxygen levels, thus reducing respiration rates, and therefore senescence in the fruit.

Dynamic CA is already being trialled across the world, especially in Italy and Holland. The theory behind this is that each store is treated differently. Described as 'reducing the oxygen until the pips squeak' by David Bishop of ICA, it measures the fruit to check for stress as the oxygen is removed; these levels are then raised slightly maintaining the conditions suitable for that individual store of fruit as opposed to generic programmes for the variety.

The stress point of the fruit is measured is varying ways, depending on whose system is employed – by fluorescence on the skin surface, or the alcohol levels in the fruit or measuring the respiration rate. There appears to be a consensus in the UK at present that the jury is out as to whether this is something for the future or not. —

Topics