One temptation marketers must avoid is charging too much for fruit, Mathews said. F.o.b. prices higher than $50 and retail prices in the $2.50-per-pound range would not be an ideal climate for demand, he said.
Even if they don’t get that high, prices will be higher this season, which could open the door for hail-grade bagged promotions at discount retailers like Aldi and Sav-A-Lot, Mathews said.
Retailers don’t like to do hail-grade, he said, and the practice hasn’t been very effective in his experience, but because of the extraordinary circumstances, this could be the year it works, Mathews said.
Washington fruit packed in Michigan shippers’ or in private-label bags is certainly an option, but Scott Swindeman, vice president and sales manager of Deerfield, Mich.-based Applewood Orchards Inc., said that after Washington’s hailstorm, it’s not nearly as viable an option as it was before.
“I’m not saying there won’t be some, but chances are there won’t be nearly as much as before the storm,” Swindeman said. “I’m not sure how much those guys are going to let go to anybody else.”
Steve Reisenhauer, sales manager for Yakima-based Sage Fruit Co., agrees.
“Personally, I see that (Washington supplying Michigan growers) happening very minimally,” he said. “We feel that at least 30% of the Washington crop has hail damage.”
Because of that, Washington shippers will have to scramble just to supply their own customers, Reisenhauer said.
Also, he said, at the lower costs Michigan shippers would be forced to sell bagged hail-grade Washington apples, it may, in many cases, not be cost-effecitve for Michigan shippers, given the freight costs to bring fruit from Washington.
With a normal size profile this year, Sage does not anticipate bagging a disproportionate number of small apples in bags, Reisenhauer said. Many hail-grade apples, however, will wind up in bags, he said.
Hail-damaged fruit could make up just 10% of the Washington crop, said Roger Pepperl, marketing director for Wenatchee, Wash.-based Stemilt Growers Inc.
Some of that will get packed in 5-pound hail-grade bags. Because of the larger size profile this year, more fruit will get packed in 5-pound than in 3-pound bags, he said.
Stemilt will not pack in Michigan growers’ labels, Pepperl said.
Applewood Orchards probably got through the April freeze better than any other Michigan shipper. As of Aug. 23, Swindeman estimated losses at just 25%, meaning the company should have decent supplies of Honeycrisps and other varieties at least this fall.