Lutz: Consumers will pay up for premium apples - The Packer

Lutz: Consumers will pay up for premium apples

08/27/2013 01:02:00 PM
Tom Karst

CHICAGO - U.S. apple marketers will face challenges in moving a bigger apple crop this year, but Steve Lutz believes consumer demand for healthy food and their growing desire for niche varieties will continue to support the category.

Apples are coming off a surprisingly strong value and volume performance in 2012-13. said Lutz, executive vice president of Nielsen Perishables Group. Consumers elevated the apple category ahead of bananas into third place in total retail sales, trailing only berries and packaged salad in the 52 weeks ending May 29. Speaking at the U.S. Apple Association Marketing Conference Aug. 22, Lutz said apples showed the biggest retail sales growth of any top major produce category, rising about 16% over the previous year.

Apple varieties enjoying retail volume gains in the past year included pink lady, fuji, pinata, Honeycrisp, red delicious, ambrosia, Jazz, granny smith and gala, in addition to niche varieties such as Lady Alice, Envy, Opal and Junami, Lutz said.

While the fresh produce category is largely undifferentiated and dominated by commodity product, Lutz said trends favor higher consumer demand for niche varieties in coming years.

Largely reflecting shortfalls in apple production in the Midwest and East, Lutz said apple varieties showing sales declines include paulareds, jonathan, jonamac, sonya, gingergold, macoun, cortland, cameo, crispin, empire, jonagold, mcintosh and golden delicious.

Lutz said he was surprised of see some of the largest category volume gains in 2012-13 season occurred in the Midwest and East, despite the short crops in those regions. As retailers shifted purchases to Washington state suppliers, Lutz said volume was not hurt by the shift. The variety mix on the shelf changed substantially and promotional pricing was up markedly compared with the previous season, with fewer aggressive ad prices and less “value” fruit in the market, he said.

The best apple consumers are willing to spend on healthy foods and fresh meals, and convenience and price are not a key purchase driver, Lutz said. With the income to afford choice, consumers are looking for unique flavors are driven to the category in pursuit of health, he said.

Despite challenges in the lackluster economy, Lutz said Nielsen data reveals fresh fruits showed a 8% increase in retail dollar sales over the past year, accompanied by a 4% gain in volume. Produce is an increasingly important food choice for a majority of U.S. households.

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