US apples look for capital gains

Washington State is known as one of the premier apple-growing areas in the world. Nutrient-rich soil, an arid climate, plentiful water and advanced growing practices provide the essential ingredients for producing top-quality fruit and it is these same elements that make the area ideal for growing organic apples. The dry climate reduces pest and disease problems, while Washington's apple grading standards operate to stringent standards. It is no surprise, then, that Washington organic apples have earned themselves an enviable reputation.

All of Washington's nine key varieties, and a few additional varieties are available as organic. Although statistics from Washington State University's Tree Fruit Research and Extension Centre indicate that the number of certified acres varies, but most of the organic acreage planted is in Red Delicious followed by Granny Smith, Gala, Golden Delicious, Fuji, Braeburn, Pink Lady®, Cameo® and Jonagold.

The overall state-wide organic apple crop last year was close to 3,700,000, boxes. Projections for 2003 season organic yield, based on larger fruit size and decreased fruit set will be just under 3,000,000 boxes, despite a significant increase in organic Gala acreage this season.

Statistics also forecast greater supplies of all varieties for the future. Approximately 1,700 acres of transitional apple orchard qualified as certified organic this year, bringing the total organic apple plantings in Washington to nearly 10,000 acres ñ about two-thirds of the US organic apple acreage and more than any other apple-producing region in the world.

Washington's organic apple industry is not only growing in acreage, advances have also been made in implementing new regimes. More than 25 per cent of the state's apple packers hold Organic Food Handler Certificates from the Washington State Department of Agriculture's Organic Food Programme.

In terms of organic consumption the trends are promising. The Natural Marketing Institute reports that sales of all organic food items jumped from $5.4 billion in 1998 to $7.8bn in 2000, and anticipates that sales will surge to $20bn by 2005.

Fresh produce sales are a significant part of this sales growth. In a study for Vance Publishing's Fresh Trends 2002 Profile of the Fresh Produce Consumer, the percentage of people surveyed who purchase organic produce jumped from 23 per cent in 1996 to 34 per cent this year. In the same study, those surveyed reported that apples are the number one organic fresh fruit.

To keep pace with the rising demand, Washington organic apple volume has expanded, and in the past three seasons in particular, the UK organic market has been described as a comet in terms of rising stars among the new business opportunities that are opening up. Washington organic apples have a good distribution spread throughout the major UK retailers that has benefited from the support given by the primary organic apple importers and category managers and this has encouraged the creation of a number of trial promotions with Sainsbury's.

January 2003 saw a detox offer linked and heavily supported by SAKS hair and beauty. Washington Apple Commission offered a £20 SAKS pampering voucher for each kilo of Washington organic apples purchased. Further ideas to support this growing sector are in the development stages.

Two activities already underway are targeting the children's market for Halloween and bonfire night and the European market also offers many seasonal opportunities that are dependent on the individual market. Scandinavia is a lucrative market in the pre-Christmas sell-in period, as is Spain in the post-Christmas period until the southern hemisphere reds arrive. The Greek market is also promising because of its preference for a sweeter Granny Smith.

Washington apple growers certainly have their options covered in terms of varieties and markets. On a per capita basis, apple consumption in the US has been flat, although within that, because of population growth, has been growing. Although as ever it pays to keep up with the fast-changing demands for varieties. Fuji and Gala consumption is still increasing. While others such as reds have been in decline. The South East Asian markets of Taiwan and Singapore take a broad spread of fruit sizes from the large 64 count to mid-sized 100 count. The Western European markets having a large production of their own tend to stay with sizes the consumers are used to 88 count to 150 count.

The UK is seen as a very interesting market as it takes Reds and Pink Lady as conventional and the whole organic varietal mix.

Rainier Fruit has been growing and packing premium Northwest apples for more than 100 years. Suzanne Wolter, director of business development, tells the Journal about how the season, now half to three quarters of the way through, is going. She says: “We've had great harvesting weather which has assisted in raising the brix level on the fruit. Overall quality looks very good and we anticipate a really good crop of Granny Smith ñ with good size and colour ñ perfect for retail sales.

“Combining all varieties, fruit in general will peak on 80's and 88's. Specific varieties may be up or down a size. Rainier Fruit Company sells the majority of our fruit to the US retail market, followed by Canada, Mexico and South East Asia.”

While warmer temperatures have afflicted production in Europe, it's been a similar story in other parts of the world. “Volumes will probably be lower than originally estimated due to a couple of factors,” says Wolter. “Warmer temperatures have increased the size and warmer temperatures have a tendency to cause sunburn which will result in lower packouts.”

Apart from this, that and the other, the main issues that US growers are facing, says Wolter, is the 47 per cent tariff in Mexico on Reds and Goldens, but in terms of varietal development, the future is looking distinctly promising. “Many growers are still removing Red Delicious trees and planting Fujis, Galas and other up and coming varieties produced in Washington.”

This is indicative of a change, she says.

“In 1985 Red Delicious represented 85 per cent of the volume shipped from Washington State; this year Reds will account for 38 per cent ñ the first time ever to be less than 40 per cent of the total crop. More importantly the consolidation at retail both domestically and abroad has necessitated the consolidation on the supply side at the growing, packing and selling areas.

“Finding the right balance between supply and demand in each variety, continued with consolidation of marketers and increasing world competition.” These are the main concerns for the future of the apple industry.

What particular focus is apple marketing taking at present? “At Rainier Fruit we will continue to focus on producing a good-quality apple and providing superior service to our customers and growers.

“Demand for organic apples seems to be on the increase from traditional retailers who are beginning to set sales goals for their organic items, including produce. The demand for organic apples seems to be heavier to the newer varieties ñ Galas, Fuji and Braeburn although Reds, Golds and Granny are still carried.

“What difficulties are there in increasing apple consumption in the US and abroad? Competition from other items in the produce department on a year-round basis. No longer are apples, bananas and citrus the only product available in promotable countries.