Demand for organic continues to grow

12/30/2011 11:26:00 AM
Mike Hornick

Jobs come and go and stocks shoot up and down, but organic apples only go forward.

“We’re seeing growers report continued increased demand for organic apples overall,” said Simcha Weinstein, director of marketing at Albert’s Organics, Bridgeport, N.J. “This has been particularly true with more traditional retailers who have historically focused more on conventionally grown apples.”

Organic puts consumers in a comfort zone about health benefits and risks, Weinstein said.

Growth in dollars, volume

Through Aug. 20, organic apple retail dollars were up 17.3% over the year before, with a volume growth of 11.5%, said Loren Queen, marketing and communications manager at Yakima, Wash.-based Domex Superfresh Growers.

“It’s exciting that consumers are still looking to organic even during tough economic times,” Queen said.

The category accounts for about 12% of Superfresh Growers’ apple business.

A common price premium on organic is about 20% over conventional. The average retail price across varieties stood at $1.76 per pound, a figure that includes the organic Honeycrisp, which often goes for $3.99 a pound.

“Organic growth is four times greater than produce department growth,” Queen said. “We need to make sure they’re more available and easily accessible to consumers. We’re converting more of our acreage into organic production, and we’re adding growers.”

For the organic Honeycrisp, some retailers try to soften the price blow by turning to less than top grade.

“We have found that with the current state of the economy, many more of our retail customers are reaching for the mid-grade and lower-grade apples, with requests for premium grades being fairly limited,” Weinstein said, referring to WXF, USXF or fancy, and WXFP grades respectively.

“The price variation for the premium grade can vary significantly depending on the variety, and many retailers are finding that their customers are not willing to pay the premium price.”

Upgrading packing lines

Rainier Fruit Co., Selah, Wash., is the largest North American grower of organic — and conventional — Honeycrisp, said Suzanne Wolter, marketing director.

“We plan to have supplies into April this season, a full month longer than last year,” she said.

Rainier Fruit averages about 17% of its total apple volume in organics, for all varieties.

“We’ve seen significant private-label growth demand as more mainstream retailers work to develop an organic destination in their produce department,” Wolter said.

This past summer, Rainier Fruit overhauled the apple packing line in a facility fully dedicated to organic.

“We upgraded the electronic sorters, added automated tray fillers, installed new near-infrared testers, more efficient PLU applicators and two brand-new mesh bagging machines,” Wolter said. “The packing line improvements have increased our capacity another 25% and streamlined the operation.”

The Pink Lady brand has enjoyed robust growth in organics.

“Last year, we shipped a little over 600,000 boxes, out of a 2.9 million box crop,” said Alan Taylor, marketing director for Wenatchee, Wash.-based Pink Lady America LLC. “The year before, it was a little over 400,000, and the year before that a little over 200,000.

“It’s gone up dramatically. Maybe it’s riding the overall trend of organics in general, and maybe just the overall popularity of the Pink Lady. It’s a high-priced apple to start with.”



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