FPJ flew out of the north-eastern US towards the end of last week, hours before an heavy snowfall engulfed orchards and cut off power at a number of packhouses in western New York. The foot of snow, described as “one of those freaky 100-year snowfalls” by one insider, came too late, however, to have a serious impact.
Most parts of the State had just finished picking what is generally held to be an excellent crop - in volume, colour, size and flavour - and the US market has gobbled up the fruit like never before. Exports of Empire, by far the dominant crop in the State’s export basket, have begun in similar fashion, in a UK market recovering its balance after last year’s trials and tribulations.
The marketing effort from New York is in the hands of fewer players than in the not-too-distant past and with consolidation has come a new-found vigour for working in unison to optimise the take-up of Empire overseas. “United we stand, divided we fall may be a cliché, but it is also a truism,” says grower Daniel Sievert. And he appears to talk for every member of the western New York State apple community.
The trimming of the exporter base has been the name of the game in the last decade. There are just a handful of large exporters remaining and as a whole, they appear a well-drilled unit, versed in the merits of sharing information and respecting each other’s abilities and strategies.
There are just fewer than 700 apple growers in New York State. Acreage has dropped in recent times, although it is thought to be around 45,000 acres this season, as opposed to the 43,000a recorded in the last census (which was down from 54,000a on the previous census). Apple production is the State’s third largest industry and was valued at around $185 million last year.
The State is the second largest producer of apples in the US. Washington regularly produces 120m bushel crops - more than the rest of the country’s combined commercial output. But NY weighs in with a crop that is expected to hit around 27m bushels this year.
“We have had one of the wettest Septembers on record,” says Jim Allen, president of the New York Apple Association. “But because the rain fell mostly at night, it has not affected picking as much as it might have. We also had a wet spring and that has brought up the size of the apples.
“Movement of apples has been hotter than a pistol domestically,” Allen says. “Nobody can remember it being this good at the beginning of the season. We came into it with hardly any carryover, Washington had cleaned up and the southern hemisphere fruit just wasn’t here. The east coast was a little early with its crop and Washington is a little late, so we got in quick and we’ve enjoyed two wonderful months. People are going crazy for apples in the US, consumption is significantly up.”
Allen has worked for the association for a decade, during which time the industry has undergone a considerable change in mindset and approach. A sector characterised by oversupply, dominated by a small basket of varieties that was dwindling in popularity and fragmented by local and regional grower differences, was in turmoil. It is evident talking to the major export desks that the negatives have been addressed and there is a more mature, joined-up and market-led approach to both domestic and international marketing strategy.
The UK is the largest export destination by far for east coast apples, both in volume and value. It is the only international marketplace in which the east coast can claim parity with Washington state in that respect. And Empire has overtaken the ubiquitous McIntosh in recent years as the preferred east coast US variety for Great Britain at least, although McIntosh retains a stronghold in Northern Ireland and the Republic. “We are in better shape in the UK now than for a long time,” Allen says. “Our market for McIntosh was chiselled away as Empire became the preferred variety, but in the last three or four years Empire sendings have maintained their levels or risen slightly. Last year was a tough year in the UK for everyone, and our exports were down a little overall.”
Bob Rigdon of Apple Acres sums it up nicely: “Last year was a very good time to have a short crop,” he says.
“The UK market is going to be much better this year,” says Steve Reissen, owner of Sun Orchard, which ships exclusively through Richard Hochfeld for Tesco. “We have had a good start domestically - I have never seen fruit selling so fast, packouts in pre-sizing bins have been 90 per cent plus, and brix and pressures perfect. It certainly won’t be a lack of quality that stops fruit selling. I think we’ll get back to where we were two years ago overall and the price we supply at will be a lot closer to what we need.
“The dollar has weakened, which is in our favour, and the European crop is smaller. But there has to be a balance, so we can deliver consistent returns, our growers can make a profit and we make a living too. It is incumbent on retailers everywhere to allow that to happen.”
“We’ve had nothing but good signs from the get-go,” says Charles [Chuck] Andola of United Apple Sales (UAS). “The Empires have been good, prices have been very good. There have been some isolated issues with sugars and sizes, but nothing serious.” Although picking was nearing an end last week and fruit was making its way into long-term CA storage, there had been no notable drop off in pressures, colour has been exceptional, and sizes had held up at around two above last season. “We have had a fair bit of rain, but in the last 10 days, there was also a fair bit of sun,” says Andola.
The company’s Ward Dobbins, at UAS’s HH Dobbins, says picking for him has been around a week ahead of last year, with three rooms closed by October 1, which is highly unusual. “We think the UK will be a much better market for everyone this year. There shouldn’t be too much fruit out there at 98p - it is very hard to sustain an orchard at that level. The market is relatively clear and the English fruit seems to be moving nicely through the system and hopefully we’ll all benefit,” says Andola. “There should be less of a spread between the price of Empire and other varieties on the shelf. We’re not Pink Lady and don’t have the marketing advantages they have. So we need to see the fruit moving at reasonable prices and the value of the dollar should help returns to growers. The world has dried up on apples - there’s room there as long as people don’t get carried away.”
Andola believes that retailers are just as interested in high-value apples as suppliers. “Supermarkets don’t necessarily want cheap prices any more than the grower does. They want to pay a fair price to the grower and give a good price to the consumer, but they love a high-value apple that returns a good margin to them.”
Apple Acres has been in the UK Empire trade since the beginning, and Rigdon still works with his initial partner Dick Lowes, now of EWT. “Most things have changed but the significant rising of quality has been the main one,” says Rigdon. “Consumers get and want a better product day-in, day-out, and with Empire we are in a good position to gain from that.
“The exchange rate is a big deal,” adds Rigdon, “and at the moment it is favourable for us shipping to the UK. I think we’re going to have a good season. I can’t remember a year when returns were as low as last year and to be in a position where we did not need to ship large volumes was beneficial. This year we have a bigger crop, movement has been very good in the early part of the season domestically and we will hopefully be able to move more into a balanced UK market.”
New York exporters are more than keen to emphasise the longevity of their relationships with the UK fresh produce fraternity and how familiarity has bred understanding and a capability to match the most stringent demands. Working with the UK market has had a big influence on practices in recent years, says Bucolo Cold Storage’s Charles Ventura. “Europe has always done things the right way. The standards are second to none and, while there are people in the US that have not always done it like that, they are finding that there isn’t much of a home for their fruit anymore. Category management has become more of an issue in the US in the last couple of years and that helps to increase the consistency of fruit in the export market too. We need everyone to be working to the same standards.”
The vast majority of Bucolo’s export fruit, which represents around 20 per cent of the volume passing through its Burt packhouse, is marketed by Sun Orchard. “We started shipping to the UK and Ireland in 1987 and it represents 95 per cent of our export business. I decided a long time ago that this is a market we need to be in, in good years, bad years and everything in between. That’s the only way it can work as an exporter,” Reissen says.
“This area of the country has been focused on the UK for a lot of years,” says Andola. “The UK led the way with category management and buyers were over here developing relationships well over 20 years ago. They gave the industry an understanding of what was needed and that has helped New York to develop the premier shippers in the country, in my view. UAS and others on the east coast were ready to jump through the hoops to service their customers. Empire is a big variety for us and the UK has been a key market in the development of that variety - it is crucial for growers here.”
Danny Albinder of Hudson River Fruit Distributors, which has been exporting to the UK since first striking up business with Tony Beeson in the1970s, adds: “We all sit on the same page. We [HRFD] have maintained a presence in the UK for 40 years as a leader in the apple market and this State has been working with the UK for so long, all of the attributes that put us at the cutting edge are there. But the business still needs to be done.” HRFD itself has invested heavily in upgrading its facilities, always with a view on the UK marketplace. “We were one of the first groups in and the fact that we’re still there is a testament to the long-term nature of the relationships we have maintained,” he says.
“New York counts very much on England to move apples for us. The domestic market is stronger than I can ever remember, but still we are ready to go with our UK customers,” says Albinder.
The decision to put all of its apples into one bushel with the UK’s largest retailer saw owner Steve Reissen undergo a radical philosophy change. The company’s facilities are designed to suit both the customers’ and key products’ needs. “Empire is 40 per cent of our business,” says Reissen. “So we knew that if we didn’t have a line that worked for Empire, it was no good for us.”
All of the Empire going to Tesco is now pre-sized, which required a huge investment in the necessary structural and technological resources. It has doubled productivity in three years. “You only have to pack what you need and the pre-sizing process allows us to take any excess fruit out of the equation,” says the company’s John Russell. “We are packing a lot more boxes of higher-quality fruit with the same amount of people. That enables us to return more to growers, who can then reinvest in their orchards. That’s where the real payback is.” The base of 40 growers includes a very stable core group that has been with Sun Orchard for between 15 and 20 years, he adds.
Reissen’s 90,000sqft packhouse - including CA storage space - can churn out three containers of apples a day. “We weren’t pushed down this route. We saw there was a need for it and decided that the way our business was set up and with the customers we had chosen to go with, it was the right way forward,” says Russell.
Bucolo handles primarily the Niagara Orchard brand of apples, fruit grown on or close to the shores of Lake Ontario. Investment in new facilities and grading lines has seen the firm increase its throughput while implementing tighter quality control procedures to ensure the performance of its fruit, says Ventura, who is vice president ofsales: “We recognised that the biggest thing for us was rejections. We, like everyone, cannot afford to have problems with fruit when it arrives overseas, and we have turned it around tremendously in the last few years. We have taken out the risks wherever we can and by upgrading our facilities we have been able to upgrade the quality of the fruit going through them.”
A strict QA regime run rigidly by the lady known simply as “grandma” by the Bucolo team, has taken the company to another level, he says. “We have had a brilliant start to the season, we were in early and picking has gone almost perfectly to schedule. There is not going to be a huge volume this season and movement has been phenomenal. Prices have been extremely strong. Some blocks were cleaner than others and QA has been really important, but the fruit has generally been very high quality. There is no sense putting sub-par fruit into the packhouse. We know the volume we need through every day and work very hard to ensure that only the right quality of fruit makes it onto the lines.”
Large-scale investment in upping the standards of the State’s facilities is another common theme. At HH Dobbins, a family-owned third-generation grower, packer, coldstorage operator and shipper in Lyndonville, capacity has more than doubled since 1999 when it took the decision to expand. “We needed to get on or get out,” says Ward Dobbins frankly. “Faced with a consolidating customer base, we knew we needed to do that.” Andola adds: “Part of the reason for the merger between UAS and Dobbins was the fact that Dobbins went from packing 300,000 cartons to 750,000 cartons. They have a lot of young orchards and it was time to take the facilities forward and move to the next step.”
“We were one of the first companies in the region to store fruit for the summer,” says Bill Gerling, general manager of Lake Ridge Fruit Company, a partnership of 12 apple growers based near their Albion packhouse and coldstorage facility, which will this year handle close to one million bushels of apples from a total of 40 growers. “Then it was very profitable but now it is more a means of extending the marketing period.
“Because of the size of our operation now, the owners have been very conscious of the need to implement the best technology, to make us more efficient but more importantly give us optimum control over the fruit.”
LRFC ships to the UK through its exclusive marketing agent New York Apple Sales (NYAS) into Empire World Trade and OrchardWorld. Twenty-five per cent of the Empire that goes through the Albion facility ends up on UK shelves, says Gerling. “That ebbs and flows a bit depending on the year and will probably be a bit higher this year.”
There have been significant plantings of Empire in recent years, as the east coast responds to opportunities across the US, not least in the slicing sector where McDonalds sparked a big upturn in demand as it switched its attentions to healthier menus, but also in the fresh market at home and abroad. But it is not a variety to plant without careful planning. “You have got to know what you can do on your land and you have to do it right. There is no market anywhere for second-grade fruit anymore,” says Allen.
“Empire growing in New York is very site specific, as it depends heavily on soils. We don’t go by region, we go by individual grower. You have to know the best areas to grow each variety and a lot of my time is spent in the orchards dictating what arrives here in the packhouse,” says Ventura. “Year-round partnerships are very important.”
Chris Bucolo says Niagara County’s growers draw on the proximity of Lake Ontario and the fruit benefits with higher brix levels. “We never seem to struggle on that,” he adds. “Growers in other counties get nervous about reaching 11.5 brix, but we often have fruit that comes in at 15. The picking season really takes its toll, as we’re often fighting against the weather, but this year we’ve got a good slug of Empire with high brix put away.”
Daniel Sievert, whose Niagara Orchards operation covers around 1,600a, has worked with Bucolo’s father Jerome for decades. “He knows as much about our operation as I do about his,” says Sievert, “and the relationship works very well for both of us.”
He uses Jamaican labour throughout his orchards, brought into the State through the H2A programme, which is sanctioned though not funded by federal government. He also uses the regulating agent Retain, which he says is money well spent at $250 an acre. “You have to get the timing right, but we apply it 30 days before harvest and it keeps the ethylene levels down and the fruit more dormant. The result has fantastic storability - apples that go in store with 17lb pressures come out at exactly the same level.”
The advent of SmartFresh has been a godsend to Empire growers - the treatment has proved highly beneficial to the consistency of performance of the variety.
Russell says: “It is no exaggeration to say that SmartFresh has revolutionised the outlook of the NY industry.”
Prior to SmartFresh, he says, Empires harvested in early October and in regular storage would begin to see pressures dipping by late-November, mid-December. That issue has been eliminated now, says Russell. “The apples are consistent now right through regular storage and CA. I look at it as a $10-a-bin insurance policy and that’s cheap insurance.” Reissen agrees: “Put the cost per unit against the benefits and it’s a total no brainer,” he says. “We won’t be shipping another box to the UK without SmartFresh for the rest of this season.”
Of course, SmartFresh took a bit of a battering in the UK mass media, being blamed for extending seasons beyond their natural boundaries and causing a pile-up of stored fruit on the market place. In fact, says Russell, the real benefit is not in season extension but in the fact that it can make a huge difference to the shelf-life of fruit once it reaches destination and therefore its performance once the consumer has purchased it.” Russell says: “We have always been a strong supporter of the product itself, it’s not all to do with the marketing effort.” And Reissen adds: “Even if it doesn’t pay me to do it this year, I will make the money back in repeat purchases in future seasons.”
Two additional Tesco depots came on board last year. “We will send five loads to the UK this week and four next week - especially at this point in the season [our approach] is a huge advantage,” he says.
“I don’t think MCP (SmartFresh) has greatly improved storage performance, but it has enhanced shelf life - a week off the shelf and the apples will still eat exactly the same. And that’s a big thing,” says Gerling.
Strategically, the industry has undeniably moved on. Five years ago, says Andola, there were too many apples being moved on a fragmented and unplanned basis. “Consolidation at the supplier end has stepped up to the requirements of the customers and growers have begun pulling out orchards that should probably have been pulled out years ago.”
In New York State and across the country, he says, there is more communication among all facets of the supply chain. “People are better informed of what everyone thinks the acceptable levels are now. There is still healthy competition, but also more willingness to help each other than at any stage in the past.”
“We look at the shelf space we’re supplying into and we see it as a direct reflection of our abilities. We take that very seriously and also like to see that all other suppliers are working like that. It has to be a level playing field and the sophistication that has come into the marketplace in the last four or five years is ensuring that there are far fewer ups and downs,” says Dobbins.
Andola adds: “You need good competition, I want to be competing with the Steve Reissens of this world. Then you know where you are.”
Reissen himself says for competition, he looks outside his day-to-day sphere. “The competition is more than other sources or other apple varieties,” says Reissen. “There is a customer segment out there that prefers Empire and will look for it week in, week out. When it’s in season there are no other red apples on the shelf with the depth of colour and the great thing about an Empire is it eats fabulously well. Red Delicious at its best is an average eating apple.”
Danny Albinder agrees: “Empire is very much a style variety. When people see and eat an Empire, they like Empire.”
MARCECA MAPS OUT MARKET
Kris Marceca, of the US Apple Export Council, represents 11 US growing states, which ship approximately 10 per cent of the volume of export apples from the country. The rest is shipped from Washington.
The export council’s biggest market by some way is the UK, with only California amongst its members counting Taiwan as a bigger draw.
“The US market is complex,” says Marceca. “And the department of agriculture wants to give funding to an industry that is united. It doesn’t want to see tax payers’ money being used for the different states to try and take trade away from one another.
“These guys in New York for instance have years and years of experience, international relationships and investment commitments and they are very focused on what they want [from a trade representative body]. The viability of the Empire trade is largely down to their export sales. Likewise, the ability of Washington’s industry to export 30 per cent of its volume is crucial to everyone. We all have a lot of power, but the industry has begun to take an overall perspective on what’s good for all of us - it is obvious that we need to work together toward common goals.
“On any sale there will be competition, of course, but in terms of gaining access to markets and matters like joining the World Apples & Pears Association we need to all understand what we want, realise that we are one industry, and work together. Of course we have more in common with Washington growers than some of our international competition - now let’s get up to 60,000ft and look down and see what’s going on.”
“The huge demographic changes of the last 20 years and the consolidation of the industry means that everyone of any size who is left is there because they are really good at something. Now it is about finding ways to continue to make money, focusing on the bigger picture.”
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