Southern-hemisphere producers are beginning to count the cost of the 2008 season, as their northern-hemisphere counterparts look to make their presence felt. Heavyweight producers such as New Zealand and Chile had smaller crops this year, and this was felt throughout the UK.
It is set to be one of the most challenging years in some time to make southern-hemisphere supplies stretch to the arrival of the early northern-hemisphere fruit, especially on Braeburn, says Gary Linsell, managing director of Empire World Trade (EWT). He explains that, while other varieties look in better shape, fruit is short because of the extremes of weather seen in Chile and New Zealand.
“There has been a lot of competition for fruit, especially from the continent, and both New Zealand and Chile have had lower crop years that struggled to meet UK specifications,” confirms Steve Maxwell, from Worldwide Fruit (WWF).
New Zealand’s smaller top-fruit crop has been well documented but, according to Peter Beaven, chief executive of Pipfruit NZ, the country has experienced an “orderly market” in the UK and continental Europe this year, thanks to reduced supplies from most southern-hemisphere countries.
Alex Schenz of Intermax agrees. “New Zealand top-fruit producers experienced a range of trends in the UK and European markets that resulted in stable demand,” he says. “A lower European harvest last season, paired with good demand in South America and a considerably reduced New Zealand volume due to frost, contributed to a balance of supply and demand in the European markets.”
Elsewhere, South Africa is enjoying a “normal” apple and pear season, but Capespan trading director Martin Dunnett says the volumes shipped to the UK and Europe have been insufficient to satisfy demand, given the smaller crops from its competitors. In addition, stronger demand from the domestic South African market, coupled with fluctuating exchange rates, is putting pressure on the market.
But the UK is still the main target for South Africa, and growers there see themselves as the UK’s natural southern-hemisphere supplier, Dunnett says. Capespan accounts for 25-30 per cent of the 10 million cartons of South African top-fruit marketed in Europe.
Moving into the northern hemisphere, both the Netherlands and Belgium are forecast to produce smaller apple and pear crops this season.
It is essential that growers continue to invest in the correct variety mix to meet consumer needs. WWF is expecting to see an increase in availability of UK Gala and Braeburn. “In addition, our technical team is doing some excellent work with growers on pesticide reduction, which is a project we are committed to,” Maxwell says.
A number of newer sources are also gaining in popularity. Eastern Europe has developed significantly over recent years, and considerable loads of top fruit are being planted, with Poland and Slovenia looking like interesting sources for the future, Linsell says. “We are always looking at new sources and new varieties, and this work is vital in maintaining the programmes we have with our retail customers,” he explains.
“I believe it is important to highlight new-season fruit for the first few weeks of a new season, as an on-pack sticker tends to draw attention to the fruit at the fixture,” he adds.
Further afield, Chinese apples and pears continue to attract favourable attention in the UK, and Dunnett says Capespan is bringing more Chinese apples into the UK and Europe than any other company. On the pear side, he is confident that Asian pear varieties Century 21 and Fragrant are meeting a demand that was not fully explored three to four years ago.
Newer apple varieties have caused a stir in recent years, and this is expected to continue to shape the category going forward.
Pink Lady has continued to expand its sales, especially in the UK and Germany. The brand enjoyed its highest-ever sales in the UK last month, and its recent promotions are helping to focus consumer attention.
WWF is 100 per cent behind Jazz and, according to Maxwell, it is selling very well. “We are also looking forward to seeing some very small volumes of Envy, as this looks like a winner too,” he reveals.
Other newer varieties that are showing promise are Tentation and Sonja.
Andy Macdonald, from Coregeo, hopes that the Sundowner apple will enjoyed renewed interest this summer. “Sundowner apples are from the same parentage as Cripps Pink, Golden Delicious and Lady Williams, and their eating quality is superb, which has been confirmed in a number of blind tastings,” he says. “However, probably due to their colouration not being as distinctive as Cripps Pink, they have not enjoyed the same success and so, when retailers were looking to reduce lines because of shelf space, unfortunately Sundowner became one of those apples affected.”
UK sales of Sundowner over the past two to three years have remained steady, and Macdonald is hopeful that the variety may attract greater attention this season - and beyond - due to the reduced availability of Braeburn from southern-hemisphere sources.
South Africa, Chile and France represent the main producers of Sundowner apples, which are sold in Tesco, Sainsbury’s,
Morrisons and Waitrose over the summer months.
Other sources have shied away from brand-new apple varieties, preferring to stick with what works for them. South Africa, for instance, has not invested heavily in new varieties in recent years. “South Africa’s Granny Smith, Golden Delicious and Royal Gala sell very well in the UK, and what we are seeing with the new varieties is that they are not setting the world alight, as the new ones did 10 years ago,” Dunnett says. “There is a fairly congested offer on apples.”
Looking ahead, there are a number of challenges facing the top-fruit category. A key issue is the development of new markets for growers and shippers outside the UK.
The UK is no longer perceived as “Treasure Island” by overseas growers, Maxwell explains. “Many now say that the price premium - where there is one - does not outweigh the additional specification and accreditation requirements,” he says.
This has been echoed across the supply chain. “The UK marketplace, which has often been the most important programme for growers and shippers, is not as attractive as it once was,” Linsell adds. “New markets that have lower quality requirements and less protocol work required to supply have started to pay reasonable money to secure fruit. We are already seeing growers and shippers looking to these other markets as alternatives to the UK. How this all plays through in the next six to 12 months will really shape the future over the coming years.”
China, India and Russia are offering producers significant opportunities, though it is not all plain sailing. “All of the above markets have supply issues of different sorts: phytosanitary, shipping and onshore logistics, and all the problems one expects in new and growing markets,” Beaven says. “But all hold the promise of growth for the future.”
The overall preference of the UK market for smaller sizes - with naturally lower returns - will see growers question whether this fruit would not be better placed in other markets such as those in Asia, adds Schenz. “This is reflected already this season by higher exports into Asian markets and reduced volumes to the UK,” he says.
In the current climate, there is some general concern that fresh produce is being devalued at retail level. “There is a conflict of ambitions, where multiples want to offer attractive promotions on fruit and vegetables, but prices need to reflect their real value,” Dunnett explains.
Another supplier, who asked not to be named, tells FPJ that the UK retail sector demands the best quality and sets stringent conditions, but wants to pay the lowest prices. “These are not the ingredients for long-term supply relationships or sustainable businesses for their supply partners,” he says.
Higher growing costs, the currency issue, the impact of recession and oil rises are also significant considerations. “At times like these, we have to work incredibly closely with our customers and suppliers to ensure that we still focus on driving the business forward,” Maxwell says.
EWT is also thinking long term. “We have seen our business grow significantly over the years and now have a turnover in excess of £100m but, even during highly competitive times such as the industry is currently experiencing, it is important to realise that EWT is here for the long term, and that providing security and quality of supply through our growers and customers has never been more important,” Linsell says. “By working closely with growers and customers, we are able to ensure that short-term challenges and supply issues are minimised, and that end consumers are still able to eat a quality product from our supply chain.”
But the obstacles do not end there. Climate change remains on the agenda, with the weather in many sources becoming more erratic. “Climate change is affecting us all in various ways, and we are all being driven to respond to this issue,” Linsell says. “There is no doubt that there will be an ongoing drive towards local and UK product over the coming years to reduce the carbon emissions involved in supplying top fruit.”
EWT is working with two of its partner suppliers - one in the UK and one in South Africa - to measure the carbon footprint from fruit production through to its facilities.
But while the industry speculates on long-term trends, it will have to continue battling in the short term with frost, hail and other climatic anomalies that have a far more immediate impact on harvest volume, Schenz says.
Despite the challenges facing the top-fruit sector, optimism is still driving those involved with the category. Apples may be a mature category, but Dunnett is positive about its prospects, particularly with the current shortage of citrus and grapes.
Maxwell anticipates that apples will be sold in more outlets as a snack option, as healthy eating campaigns gather momentum. “There is a desire to eat more fruit and vegetables, and apples specifically are so portable that they can satisfy any snack occasion,” he says.
With a number of activities in the offing to celebrate Apple Day on October 26, producers are keen to continue using the opportunities available to them.
RUBENS IN DIFFERENT CLASS
Norman Collett has embarked on ambitious initiatives in recent years, and hopes that some will pay dividends this season. Doris Lee Butterworth talks to technical director Nigel Jenner about the upcoming season.
Norman Collett has high hopes for the apple variety Rubens, and is confident that it will secure greater attention in the future. The variety is a cross between Elstar and Gala, and Norman Collett’s growers have planted more than 100,000 of its trees in the past two years.
“It’s a variety we really believe is a winner, and we are going to market it as a viable alternative to Spartan,” says technical director Nigel Jenner. “Most Rubens have gone in the ground this year, so there will only be 300-500 bins (approximately 100-200 tonnes) this season.”
The variety, which was originally bred in Italy, is harvested at the end of September and will be marketed from November through to January, plugging the picking gap between Gala and Braeburn. While many of the other new varieties need a period of storage prior to marketing, Jenner says one advantage of Rubens is that it eats “fantastically well” straight from the tree.
“We will be selling Rubens in Tesco and Somerfield, although there are other outlets that we are also considering,” he tells FPJ.
Norman Collett is in the process of evaluating another six new varieties, but Jenner stresses that there has to be a strong commercial reason for investing in a new apple. “We are very keen on trialling apples, but we will only extend the offer if we can provide something that is new and exciting,” he says. “If that is the case, we will get behind it, promote it and aim for significant production volumes. Otherwise, you would be entering dangerous territory, as you could have hundreds of varieties but you would only be getting a small quantity from each one.”
According to Jenner, there is still growth potential in the UK for home-grown top fruit. “The UK can produce fruit that is on a par or better than imported product, and we are 100 per cent devoted to English pedigree fruit - we stand or fall by the industry,” he says. “We are devoted to making it a success and feel there is a lot more that can be done, and that we are doing, to develop the UK business.”
The challenge for UK growers is to produce consistent, good-quality fruit that will appeal to consumers who often buy on visual appeal.
“The UK climate is ideally suited to flavoursome apples, and now we need to concentrate on getting the modern systems and planting techniques in place, so the appearance of UK apples supports the flavour,” Jenner explains. “As consumers become more aware of carbon footprints and air miles, we can show that the UK can grow fruit that ticks all the right boxes. But we need to recognise that we have got to be on a par with the competition. Just because we are growing British produce, it does not mean that you can rely solely on that advantage; fruit has to be attractive and taste good.”
Norman Collett has also been busy with its organic apple varieties, and Modi, Juliet and Crimson Crisp remain under evaluation. “Our organic business is very good, and we are currently negotiating a deal with East Malling, which could see another 30 hectares of organic fruit being grown,” Jenner reveals. “It is a step in the right direction.”
As yet, climate change has not had a major impact on the seasonality of product, and Jenner says varieties such as Cox are still harvested around the same time as before. Having said that, he adds that Braeburn is now a major variety for Norman Collett, whereas a few years ago, the school of thought was that it could not be grown in the UK climate. As for the future, Jenner says that in the long term, there may be the opportunity to grow other crops and varieties that have not traditionally been grown in the UK.
Pears account for 20 per cent of Norman Collett’s business, and three of its growers have planted extensively. One grower is trialling Vereecken, a Dutch clone of the Conference pear. “I’m a strong believer that pears can grow well in this country,” Jenner says. “However, we are trying to compete against Dutch and Belgian orchards, which are only five to six years old, while in the UK some orchards are 40 years old.
“We need to focus on new modern systems in order to fully compete, but there is strong demand for UK-grown pears and we cannot dismiss that.”
Norman Collett also has ambitious plans for its stonefruit production. The company has marketed plums and cherries for a number of years and is keen to diversify its portfolio. “We are a 100 per cent English business and producing stonefruit on a larger scale will keep us busy during the summer months,” Jenner says. “We are looking at setting up trials to grow apricots and nectarines in the UK.”
A CONVENIENT COAT
AgriCoat is hoping for continued strong demand from the convenience sector.
Its Natureseal product, which was developed in the US along with proprietary vitamin and mineral blends, is used to maintain quality in fresh-cut apples, to preserve colour, texture and shelf life, says Simon Matthews from AgriCoat.
“Natureseal is used widely across the US, the UK and Europe, and has been instrumental in developing this new opportunity for growing apple sales,” he claims.
FOOD MILES DEBATE RAGES ON
There are concerns about how the food miles issue is being used by some producers to persuade consumers to buy locally grown produce, Peter Beaven, chief executive of Pipfruit NZ, tells FPJ.
“The debate on food miles misses the critical point; what is the total carbon footprint of production and supply?” he claims.
This is what the New Zealand pipfruit industry is planning to measure in the next few months, as it invests in ways to reduce its greenhouse gas emissions.
But customers in the UK and continental Europe will continue to be New Zealand’s key markets for the foreseeable future, Beaven says.
“The growth opportunity in the UK for the future lies in new and innovative varieties, such as Jazz and other outputs from the HortResearch breeding programme,” he tells FPJ.
PINK PLAUDITS AS LADY HAS HER DAY
Pink Lady has shown a significant increase in sales for the first six months of this year, compared with 2007, and we are very pleased with the increased sales forecast for 2008-09, says Andy Macdonald of Coregeo, the Pink Lady trademark owner’s UK agent.
European Pink Lady represents about 40 per cent of sales in the UK. South America has the newest supplies of the fruit, with Argentina sending around 600 tonnes to the UK, in addition to Europe. Uruguay is gradually building its availability.
Our challenge is to achieve increased market share, without compromising quality or the premium status of the Pink Lady brand. Shoppers know what to expect when they pick up a Pink Lady apple, and this is due to our strict minimum specification level. If it is not achieved, the apple cannot be sold as a Pink Lady. Our market share is increasing year on year, and we firmly believe this will continue.
Pink Lady continues to outperform its competitors and is the best-known apple brand in the UK, as well as the sixth most popular selling apple. We are constantly evaluating how we can make PR work harder for us, in order to communicate key brand messages. We are also examining opportunities provided by additional sampling activities that will be aimed at encouraging non-Pink Lady buyers to experience the product and interact with the brand, and may even be used to help generate news and drive traffic online.
Besides our ongoing promotions with supermarkets, we are running an advertorial campaign in women’s magazines, which includes food writer Annabel Karmel’s recipes and various competition prizes.
Our recent work with Annabel, pictured, has been a great success. We printed 100,000 copies of an exclusive recipe booklet in which she participated, and the recipes have been so popular with mums that we have issued more than 5,000 via the Pink Lady website. If the take-up of the recipe leaflet is anything to go by - and we have had additional print runs - then the answer to whether this is working must be a firm ‘yes’.
Other activities this year include teaming up with Great Ormond Street Hospital Children’s Charity. Throughout 2007-08, we supported the Children’s Christmas party, the Kiss it Better campaign and the Festival of Running in Battersea Park in June. In April, four runners entered and finished the London Marathon dressed as Pink Lady apples, running on behalf of the charity.
As well as marketing to existing customers loyal to Pink Lady apples, we are using recently obtained TNS quantitative data and information from our own focus groups. This has enabled us to identify significant opportunities to increase penetration. The insights given by the data will also allow us to target our marketing activity far more effectively in the future, to ensure we are talking to the right consumers.
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