A whistle-stop tour of apple production in New York State, Michigan and California reveals one salient fact - packers across all three states are seeking to boost their presence in export markets, and each region has something quite distinct to offer to overseas clients.
The US Apple Export Council (USAEC) represents 11 apple-growing states - New York, New England, California, Michigan, Pennsylvania and Virginia - and covers nearly 40 per cent of annual apple production in the US.
Founded in 1993, the trade association runs generic promotions funded through programmes administered by the US department of agriculture’s Foreign Agricultural Service, to support US-grown apples in foreign markets. The board is comprised of representatives from each state or region, including shippers and state marketing board representatives.
With promotions underway in the UK, Europe, Central America, Mexico, Canada, Taiwan and Russia, the council constantly reviews its programme and its outlook in existing markets. And the body is now actively exploring new markets and niche opportunities for its shippers and growers, and work has recently kicked off in South East Asia, India and Brazil, according to executive director Kris Marceca. A trade mission around three of the states revealed just what the different regions can offer to overseas markets.
The Big Apple
This year’s crop from New York State is looking top notch thus far and Jim Allen, president of the New York Apple Association, says there will be good supplies of all varieties this year, with fruit sizing also expected to be good. “We always harvest a full range but the smaller and medium sizes tend to be of better shipping quality and condition,” he says.
New York is the second-largest apple-growing state in the US, with the industry centred on more than 45,000 bearing acres in six major production districts throughout the entire state - the Champlain Valley, Eastern Hudson Valley, Western Hudson Valley, Central, Lake Country and Niagara Frontier.
There are almost 700 family farms across the region, which between them produce more varieties than any other state in the country and an average volume of 29 million bushels per year, of which 55 per cent is sold into the fresh market. Around 10 per cent of the total crop is exported and 85 per cent is sold domestically. The remaining five per cent is marketed directly by growers and roadside markets.
McIntosh is the state’s number-one variety, followed by Empire, Red Delicious Cortland, Golden Delicious, Rome, Idared, Crispin, Paula Red and then Gala, Jonagold and Jonamac. Several new apple cultivars are also starting to make a name for themselves in New York State, including Honeycrisp, Zestar!and Sweet Tango - a cross between Honeycrisp and Zestar! New York State fruit is promoted under the New York Apple Association’s Apple Country brand and logo.
It has been a tricky couple of years for the industry due to economic woes, but this year’s solid crop should hopefully see things get back on an even keel, believes Allen. “Last year, we found out that apples were not recession-proof,” he says. “Retail prices were very high and once a price gets established, it is hard to bring the retailers off it. Last year, they sold less because the retail price was high - this year, people have got to learn that we need retails set at a good level and product to move at a good chip. This has to continue all season.”
Although the UK market has always been a priority for several New York shippers, many are now also looking to extend their scope to new overseas clients. “We look at the UK as a mature market,” says Allen. “It is a good market but we are not sure it will grow by leaps and bounds. We hold our own, but New York apples are seasonal, so that holds us back a little. It would be good to find another couple of markets like the UK.”
Companies such as Sun Orchard, New York Apple Sales and United Apple Sales deal directly with some of the UK’s largest apple importers. “Empire does well with retailers in the UK,” says Allen. McIntosh and Empire also have a core following in Scotland, Northern Ireland and Ireland.
Niagara County-based Sun Orchard is very much focused on its exports to the UK and invests constantly in upgrading its software and grading technology to meet the exacting demands of the market. The firm handles 14-16 varieties, primarily sending Empire and some volumes of Red Delicious to the UK market, which absorbs 60-70 per cent of all its exports. Around 20 per cent of its total volumes are shipped overseas.
Sun Orchard started sending Empire to the UK in the early 1980s. “British people loved the fruit and we hooked up with an importer who supplied Tesco,” explains owner Steve Riessen. “Since 1998, we have been working with Richard Hochfeld Ltd to supply Tesco in the UK with Empire apples. We are very proud to have been a supplier to Tesco for many years.”
Sun Orchard handles fruit from around 40 growers from western New York State, where their packhouse is located. Two field experts are responsible for selecting the appropriate product to meet the demands of the company’s major markets. Not being a farmer itself enables the firm to sell only the fruit it is happy to market, says Riessen. “We can be selective,” he explains “We can pick the fruit we want and which we are sure we can market. It means we are really able to raise the standard of our raw product. We are very particular about using the growers for the UK market who have Tesco Nature’s Choice certification.
“One difficulty for us is making sure that growers are Tesco Nature’s Choice-certified. Third-party certification is tough for them to achieve, and not all 40 of our farmers have Tesco Nature’s Choice. But they will all have GlobalGAP, and our larger Empire growers are Tesco Nature’s Choice-accredited.”
But the key challenge in supplying the UK market is securing the necessary prices to achieve decent grower returns, according to Riessen. “Last year was tough because of the exchange rates, but two years before the dollar was weak and we had great rates. I believe the dollar will weaken more, so that will be favourable. But pricing this year will be lower than last because the Empire crop is bigger.”
Although Empire is the firm’s primary focus into the UK, Sun Orchard also supplies some Red Delicious to market and has also sent Gala in the past. Occasionally, it ships some volumes of Red Delicious to the wholesale sector.
“It is a difficult time now for marketing apples because there is a worldwide oversupply of fruit and new club varieties are coming out,” says Riessen. “We feel Empire is a world-class premium apple, but it has been around for a while now so we can’t get it into a club.”
Over a period of several years, Sun Orchard has developed a packing facility catered to the stringent demands of the UK market. A pre-sizing facility was built in 2004 after Riessen saw the system in action in France and decided it was the right model for his packing business. “I wanted a system that handles the fruit as gently as possible,” he says. “We don’t pre-size McIntosh, Gingergold, Honeycrisp, Crispin or Golden Delicious, as those apples have more tender skin - we have a main packing line for them. But we pre-size our harder apples, such as Gala, Empire, Red Delicious, Cameo and Fuji, and the benefits are many. Pre-sizing helps with inventory control and order implementation, etc. For the UK market, we pre-size all our Empires, just before we pack them. If we pre-size them, they will be going out the door - we don’t pre-size for the sake of it. Other pre-sizers are three or four times the size of ours - our pre-sizer is run on a different principal and for us it is more efficient and allows us to keep a better inventory.
“We are adamant that we want a commit-to-pack line for certain varieties and it is asking too much to pre-size everything. Both sides of our facility work together for maximum efficiency,” adds Riessen.
SmartFresh technology has revolutionised the New York apple industry, according to Riessen. “Before SmartFresh, it was tougher - we had to pick fruit and it was a race to get it through. Now 95 per cent of our Empire is treated with SmartFresh, because it keeps the fruit really fresh for the consumer.
“Empire is a world-class apple when the condition is there but, just as with any apple, it is not a good eating experience when it is soft. In fact, it is the particular crunch and flavour that give Empire its unique position on the shelves of the UK retailers. For us suppliers, it is absolutely critical to get the condition right and that’s why we use SmartFresh. In the Empire business, you have to be very good at what you’re doing. It costs 50c a box to apply SmartFresh, and this year we will spend $250,000 (£157,000) on it. But what’s the real cost? Fruit condition is the most important thing we can do.”
Another major exporter from the state is New York Apple Sales, which is based in Caselton. The firm represents a number of large NY packing facilities including Lake Ontario Fruit, located in Orleans County, the state’s third-largest growing area. Orleans County presently accounts for more than 10 per cent of the state’s production, with increasing acreage each year.
John Russell is general manager and partner of Lake Ontario Fruit, which markets all of its apples through New York Apple Sales. His fruit is sent to the UK and is sold in Tesco, Asda and Sainsbury’s. Russia and Israel are also important export markets for Lake Ontario Fruit’s apples.
“We have added $1.5 million (£943,000) of equipment in the last year and a half and are now packing 1m boxes a year,” he says. With new bagging equipment and storage technologies already under its belt, in the next couple of years the firm is looking to add another $2-3m of investment.
“The specs from the UK market are key to upgrading our facility and becoming more efficient on packing,” says Russell.
Lake Ontario Fruit grows Empire, Gala, McIntosh and Red Delicious, along with volumes of Cortland, Jonagold, Romes and Honeycrisp. “We do close to 100,000 bushels of Honeycrisp, making us one of the largest packers of this variety in the Northeast,” says Russell.
Wayne County, the second-largest apple-growing county in the whole of the US - second only to Yakima in Washington State - represents almost 45 per cent of the entire New York acreage and is home to Fowler Farms. Lee Peters, vice-president of sales and marketing, explains that the family-run firm owns 4,000 acres of land, over 2,000a of which is accounted for by high-density apple production. McIntosh, Gala and Empire dominate volumes, followed by Fuji and Red Delicious. The firm was one of the first in the state to ship fruit to the UK, but that market has now dwindled for the company.
“The domestic market keeps us pretty busy,” says Peters. “Fowler was actually one of the first shippers in New York to do volumes to the UK but we have gotten away from it in the last few years because the market is not strong for us. You don’t make a 150-year-old company last by dealing with weak markets. But there is a definite commitment to apple growing throughout the entire state of New York.”
The company is constantly seeking to expand both its domestic and export operations. “We are in a growth mode,” says Peters. “Every year, we plant 120a of new orchards.
“We are excited to have visitors from India and the Far East here because for us it is an untapped market. The region offers a phenomenal opportunity with such a growing population.”
Austin Fowler, a sixth-generation member of the family who now works in the business, says: “Our company is expanding. We are expanding our controlled atmosphere storage capacity and we now have 17 rooms that can each hold 1,500 bins of apples. We pride ourselves on our storage and our construction here is very strong, as we are aiming for the long term. We now have a pre-sizer and high-speed packing lines. All the fruit is pre-sized and we do not have apples stored in racks and boxes for long.
“East Coast varieties are very susceptible to bruising, so we designed the equipment around the fruit. We handle 25 varieties and can do up to 7,000 packs a day. The system gives us a lot of flexibility,” adds Fowler.
Midwest motivation
Based around the city of Grand Rapids in Michigan are some of the state’s largest apple growers and packers. With a value of around $100m annually to the apple grower, apples are Michigan’s largest and most valuable fruit crop.
Michigan harvested around 21.5m bushels of apples in 2006 but, with 26m bushels of apples predicted for this season, production is due to be above normal levels.
The trend is towards higher-density planting in the state’s newer apple orchards, with upwards of 500 trees per acre. The most prevalent variety in Michigan is Red Delicious, followed closely by Golden Delicious. Gala and Honeycrisp are also growing in popularity.
Denise Donohue is executive director of the Michigan Apple Committee. “The highest geographical land in Michigan is known as the Fruit Ridge, where the altitude keeps the trees free from frost damage,” she explains. Around 65 per cent of Michigan’s apples are grown on the Fruit Ridge, and the state has a long and rich history of apple production, according to Donohue. There are 950 growers in the state, all family farms, and 50 per cent of the orchards are just 100a or smaller. “It really is a family industry here, with third, fourth and even fifth generations in business,” she says.
Around 40 per cent of the state’s apples go to the fresh market, with the remainder destined for processing.
The Michigan Apple Committee is responsible for research, education and market promotions and development. “We have about a dozen shippers and four or five who export,” says Donohue. “This year, Michigan will see more than 300 of its apple farms earn good agricultural practice (GAP) certification.”
Steve Thome Orchards is a fourth-generation farmer operating 120-125a of apple production, covering 15 different varieties, including Fuji apples for the first time this year. Jack Brown Produce packs all the family’s fruit.
“We are always renewing and replanting orchards,” says Steve Thome. “For me to make money, I have to grow apples every year and we work hard to stay cropping annually. After harvest, thinning is the second-most important part of our year.”
Thome would like to see more of his fruit head to export markets, especially when the crop is as large as it is this season. “It is good to look at new markets,” he says. “One of the advantages of being based here on the Fruit Ridge is that we have a lot of facilities and Lake Michigan is a great tempering body of water to protect us from frost. We also have great soil in Michigan.”
The Ridgeview Packing Facility sends around 15 per cent of its fruit to the processing market, says owner Al Dietrich. The company also handles cherries and asparagus. “We export fruit to Central America, Costa Rica, Brazil and Russia,” says Dietrich. “I am very excited about new export opportunities as there are a lot of new plantings in Michigan and a lot of new people in the family businesses who want to do more. There has been a change recently and young people are now more interested in their family’s companies.”
Ridgeview brings in 90 per cent of its fruit from two nearby family farms. “There are a lot of new plantings in Michigan and everyone is going to high-density plantings and quicker production,” adds Dietrich.
The Sunshine State
On the West Coast, the Fresno-based California Apple Commission has helped the state’s producers ship fruit to more than 25 countries, including the UK, Canada, Mexico and Taiwan.
Along with administering the state marketing order programme for California apples, the commission also conducts pre- and post-harvest research and speaks on behalf of the industry.
Granny Smith is the jewel in the crown of California apple production. “Our Granny Smith gets very green, as we don’t get the cold weather that brings out the red blush,” says the commission’s Todd Sanders. “California begins its harvest in late July or at the start of August and that continues until the start of November. We don’t store apples in this state - we just pick them and pack them. Our window is one month ahead of Washington.”
Prima Frutta is the largest apple packer out of California. The company handles the majority of California’s Granny Smith, Gala, Fuji and Pink Lady and during peak production, can handle 25,000 40lb boxes a day. The company owns the only pre-sizing facility in California, installed in 1998, and is now halfway through its packing season.
Prima Frutta is also the largest cherry packer in California, handling 30-35 per cent of the state’s volumes - 2m 11kg boxes - as well as growing and packing walnuts.
Around 30-35 per cent of the apples it packs are from its own production and the firm makes up 45 per cent of the market for Californian apples and cherries in the UK.
Ted T Parker III from the export sales department of Primavera Marketing, the firm’s marketing arm, says: “We go from June to typically December in the packhouse. On each line, we have a full-time US department of agriculture inspector, as we are very conscious of the quality of our fruit.”
Greene & Hemly is a grower and packer handling conventional and organic Granny Smith, Gala, Fuji and Pink Lady apples, as well as pears.
“We are interested in working on a protocol to go to Asia and South East Asia,” says Doug Hemly. “The Californian apple business is relatively new,” he adds. “But we are the first district in the US for any given variety and we have looked at our windows of opportunity.
“Pears get sold somewhat sequentially, but because of long-term storage, apples are more of a simultaneous marketing event.
“We have gone more to organic, which to me is a different variety as it is a different marketplace. But our growth opportunity in organics is flat right now and in reality, over time, the organic premium will have to settle out.”
The firm does some limited volumes to the UK. “There is a different chemical spectrum for the UK so it has been a little learning curve,” says Hemly. “We have [previously] had a limited production base that is UK-certifiable, but now we have the protocols, so we think it will be better next year. We are working on getting our information down in the sequence the UK is looking for.
“In the past, we would have exported to 15 countries each year, but in the last couple of years exports have gone down dramatically because US prices have gone up and export prices have gone down,” adds Hemly. “But long-term export relationships are important to the stability of our company’s growth. We need good people we can partner up with.”
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