Northwest cherry producers are investing heavily in their operations and are keen to see some returns. The US may be battling against aggressive competition from Turkey and Spain during their early season but marketers are confident that there are opportunities to grow UK business.
US shippers will have less fruit to sell this season, however. “The 2005 crop size is down from the previous two years when volumes reached over 11.5m 20lb equivalent cartons,” confirms BJ Thurlby, president of the Washington State Fruit Commission.
This season’s Northwest cherry crop is expected to reach 9-10m cartons, according to latest estimates from the Washington State Fruit Commission.
“The crop is down due to poor pollination and fruit drop in the entire region,” says Roger Pepperl, marketing director of Stemilt Growers.
Given the delicate nature of cherries, observers are keeping their fingers crossed volumes won’t fall further. Indeed, they’re hoping that Mother Nature will be kind and refrain from showering trees with heavy rain, which can be devastating to the crop.
Weather conditions in Washington State were cooler than normal during the late May-early June period and according to Suzanne Wolter, director of marketing for Rainier Fruit Company (RFC), the lower temperatures had a positive effect on colour in some early maturing regions.
Tony Buak of Columbia Marketing International (CMI) reports that early production of the Chelan variety was lower although this shortfall could be made up by good packouts of the popular red cherry Bing.
CMI estimates it will handle 1.2m cartons of cherries this season, with exports accounting for 20 per cent of volumes. However, the producer does not intend to send any early cherries to the UK and in mid June reported little interest from the market.
Nevertheless, CMI does ship a range of later cherries to the UK such as Bing, Lapin, Skeena, Sweetheart and Rainier.
Buak believes that one of the fastest growing varieties is Sweetheart. “This variety has the potential to increase exports as it usually does well on the ocean and produces medium to large sized berries,” Buak says.
Pepperl agrees: “Bing is still king but Sweetheart is a real growth area in the category and sales are growing as we extend the season.”
Sweetheart is a later maturing variety enabling Northwest growers to stay in the market into late July and August.
In terms of other varieties, Wolter also believes that Rainier could bolster the UK deal. “The potential for Rainier is significant as many people have never seen or tasted this blushy, cream coloured variety,” she tells the Journal. “Rainier represents approximately 10 per cent of our overall production and will continue to do so.”
“Considering the extreme expansion we have seen in Rainier cherries, it’s worth mentioning that to meet strict size and sweetness quality standards for selected retailers, growers pick each tree of this highly sensitive fruit up to 4-5 times,” says Thurlby.
While traditional dark sweet cherries have an average Brix level of 18, Rainier Brix levels can be as high as 26.
The UK is the leading market for Northwest cherries in Europe and took just over 200,000 cartons in 2004. But producers are not resting on their laurels and acknowledge that Turkey and Spain are eating away at US market share, particularly during June and early July.
“In response to growing competition we are maintaining our quality standards and focusing on growing share with customers who appreciate the attributes of Northwest cherries,” says George Smith, European representative for the Washington State Fruit Commission. “We are constantly introducing new varieties packed in various formats which offer the best possible value to the consumer.”
Northwest cherries have long been promoted as a healthy snack and this season, new promotional activities are going one step further. Campaigners are calling in key nutritionists and have urged consumers to focus on the latest craze - forget Atkins, it’s all about the glycaemic index (GI).
As cherries have a low GI rating of about 30, the little fruit is being promoted as a satisfying taste sensation that releases a steady stream of energy into the body.
While this tactic is expected to appeal to mainly women, Smith notes that Northwest Cherry Growers will continue to support the retail and wholesale sector with account specific promotions. “These have to grab the attention of consumers and quickly build equity for Northwest cherries in a short time frame,” he explains.
It’s fair to say that many US producers bide their time in the UK during the earlier part of the season but for many it’s all systems go as from mid July.
Wolter notes that the UK is a very strict market and one of the most difficult countries to deal with in terms of product quality specifications and growing practices. However, unlike Buak who considers the UK to be a mature market offering limited growth during the normal season, she believes that there is room to increase cherry exports from the mid-July to early August period.
RFC has increased its cherry output by 10 per cent this season. “The increase is a combination of new production and increasing yields from young, maturing acreage,” Wolter says.
In line with increased volumes, RFC plans to increase shipments to the UK. It mainly ships the Rainier variety, although some Bing cherries are also exported.
The company has invested heavily in its cherry operations and Wolter claims that the company is now the second largest player in the Northwest cherry industry. This is all the more impressive considering that this has been achieved in five seasons.
“Our cherry lines were built in 2000, 2003 and 2004 respectively,” informs Wolter. “Consequently we have the most modern cherry-packing lines in the country with an emphasis on food safety, quality and efficiency.”
RFC’s facilities are SQF 2000 certified and Wolter says that fruit bound for the UK meets all certification requirements. In addition, the company’s orchards are working towards SQF 1000 certification.
“We firmly believe that quality begins in the orchard; consequently, we invest as much in our farming operations as we do in our packing and storage facilities,” she says.
CMI has also made major investments in modernising its pack houses in the past two years and has focused on packaging. “This investment has enabled our packhouses to capture a large percentage of consumer packaging. Be it punnets or bags of any size and weight, we can now capture close to 90 per cent of our total tonnage in a consumer pack,” Buak says.
A number of factors such as weather, volumes, pricing, air freight rates, and in recent times, currency exchange rates, always affect the season whatever the fruit may be. However, observers believe that cherries, despite their delicate nature, could offer sweet returns.
“Retailers around the world have found that cherries are not only a great impulse item but also have the highest currency per square foot profit in the produce department,” Thurlby notes.
“They are acutely aware of the category contribution of cherries to their bottom line,” agrees Wolter, adding that cherries are one of the only true seasonal produce items available during the summer months.
“As such, consumers clamour for these sweet delicacies and as production increases, so does the opportunity to introduce this fruit to new consumers. The health benefits associated with eating fresh cherries should increase demand even more,” she continues.
Meanwhile, organic cherries are also providing strong openings for US producers. “The UK remains the top premium organic cherry target market,” Thurlby says.
Organics comprise about two per cent of total Northwest production - a small percentage albeit a significant jump compared to one per cent in 2000. In terms of volume, this ranges from 1,500-2,500 tonnes.
Two companies that are investing in organic cherries are Stemilt and RFC.
“Chelan, Bing and Sweetheart make up the majority of our organics and we have a packing shed dedicated to organic cherries and apples,” Stemilt’s Pepperl says. “We see growth in the UK, especially with the strong consumer backing there.”
According to recent reports in the Packer, Stemilt plans to expand its organic fruit production (which includes apples and pears in addition to cherries) by as much as 20 per cent a year. The producer handled 75,000 cartons of organic cherries last season.
RFC also intends to increase its organic cherry output significantly over the next few years. “This year our production is 30 per cent more than last year and as organic acreage increases across the Northwest, so will organic volume shipments to the UK,” says Wolter.
Meanwhile, UK importer JO Sims began handling cherries in mid-June. “We started with Chelan and will moved into other varieties including Bing, Lapin, Rainier and Sweetheart,” says Darren Matschull, procurement director.
Matschull reported good quality fruit and large sizes. “There’s plenty of cherries averaging 9.5 rows,” he says. According to JO Sims, Turkey is the closest competitor to the US in terms of quality and Matschull forecasts good US sales in late July, when the Turkish season winds down.
Similarly to US producers, Matschull believes the Rainier variety will enjoy a strong following in the UK. “Sales are increasing year on year and US Rainier’s are very popular,” he claims.
Meanwhile, Mack Multiples will handle Northwest cherries once the Spanish and Turkish seasons have ended. “We’ll be importing a couple of consignments of US cherries from the end of July/beginning of August,” says a spokesman.
STEMILT’S OPTICAL OPTIMISM
Stemilt Growers exports the varieties Bing, Sweetheart, Skeena and Rainier to the UK and is optimistic about the 2005 deal.
“The UK demands great quality product and although the market is established, it’s far from mature,” says Roger Pepperl, marketing director for Stemilt. “I see growth continuing with a longer season and stronger promotions,” he continues, adding that Northwest cherries are a big hit among the UK’s retailers and consumers.
Stemilt is focusing on its packaging operations and is looking at automation in its consumer packing lines. “Zip-lock bags are becoming a bigger item and we’ll be introducing new packaging ideas next season,” Pepperl says.
The producer is also investing in optical sizing equipment which will enable it to offer a more uniform product.
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