Apples’ slice of retail profits holds steady - The Packer

Apples’ slice of retail profits holds steady

12/30/2011 11:23:00 AM
Mike Hornick

Berries are the pace setter in fruit sales, but apples remain solid performers in the produce department, marketers say.

“Our research indicates that berries lead all fruit categories in dollar sales and were up 5.4% in 2011 over the previous year,” said David Nelley, apple and pear category director at Vancouver, British Columbia-based The Oppenheimer Group.

“Seedless, easy-peel citrus shows a 7% bump, while the contribution of more traditional oranges to the produce department profits is declining,” he said. “Apples and bananas are each up about 2%, so they are holding their own.”

Apple a day brings the profits

“Apples typically account for 8% to 10% of produce department sales dollars during the heart of the season,” said Chuck Sinks, president of sales and marketing at Sage Fruit Co., Yakima, Wash.

Bananas sell more pounds, but apples create more profits, said Loren Queen, marketing and communications manager for Domex Superfresh Growers, Yakima, Wash. “Apples are 13.2% of the dollar share in fresh fruit,” he said.

If anything, apple consumption may be greater than U.S. Department of Agriculture statistics show, said Jim Allen, president of the New York State Apple Association.

“I don’t really believe in those numbers, because each year we grow more apples and sell them all,” he said. “A lot goes unreported. Direct marketing, green markets, pick-your-own and farmers markets are growing constantly. Homegrown continues to grow. But if it doesn’t go across a scanner, it isn’t counted.”

Marketing strategies

To keep profitability up, apple marketers offer various services and recommendations to retail clients.

Selah, Wash.-based Rainier Fruit Co., for one, suggests marketing the fruit in healthy eating-themed combinations with other foods.

“Retailers have an opportunity to tap into apples’ broad appeal by cross-merchandising throughout the store,” said Suzanne Wolter, marketing director.

“Pairings shown on shelf talkers, recipe cards, point-of-sale material or on the retailer website … would trigger incremental purchases because they’re credible and reinforce what consumers already understand about the health, taste and convenience of apples,” Wolter said. “Consumers are hungry for health and food information.”

Chuck Sinks, president of sales and marketing at Sage Fruit Co., Yakima, Wash., said demos of recent or club varieties, clear signs and secondary display space all boost profitability.

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