WENATCHEE, Wash. — Thirteen years after breaking on the scene, fresh-cut apple sales are still fueling growth in apple sales.
Washington apples used for fresh slices may account for up to 6 million boxes the state’s output, said Todd Fryhover, president of the Washington Apple Commission.
Statistics from the U.S. Department of Agriculture estimated for the period from 2008 to 2012 fresh apple slices accounted for 1.4% of the total U.S. apple crop. In 2011, the USDA said about 238 million pounds of apples were used for fresh slices, up from 146 million pounds in 2010. No estimate from the USDA is available for 2012.
Sales for the fresh apple category are growing at retail, said Tony Freytag, marketing director with Cashmere-based Crunch Pak. Crunch Pak, founded in 2000, produces about 2 million apples slices a day, and each year the company produces enough apple slices that if laid end-to-end would reach around the world twice, according to the company.
Nielsen reports the total retail market for fresh apple slices grew about 12.3% over they year ending June 29 compared with the previous year, Freytag said in an Aug. 23 presentation to the U.S. Apple Association. Crunch Pak’s fresh apple slices sales grew 14.8% for the same period, Freytag said.
The overall value of fresh-cut apple slice sales at retail was $225 million for the year ending June 29, Freytag said, and Crunch Pak controlled 44% of the market. Nielsen numbers showed Dippin’ Stix with a 16% market share and Chiquita with 15%.
Freytag said the sliced apple category at retail has is growing at an average of 20% over the past three years, and Freytag expected overall 2013 sales will reach $230 million, about 30% up from 2012.
While there are no definitive numbers for foodservice, quick-service restaurants and school use of sliced apples, Freytag said industry estimates of total annual retail and foodservice sales project close to $475 million.
“There is about a half a billion in sliced apple sales that didn’t exist 10 years ago, so for me it is extremely satisfying to give that outlet to growers,” he said.
Consumer studies have shown that fruit sales increase more than 60% when fruit is sliced, he said. Crunch Pak recently took a survey of more than 400 women from 18 years to 60 years old, and Freytag said the survey found that 69% of the women between 18 and 60 don’t buy sliced apples.
“We’ve got a long ways to go,” Freytag said.
Retailers are paying more and more attention to the category, said Howard Nager, vice president of marketing at Domex Superfresh Growers, Yakima.
On one recent trip to a Northeast retailer, Nager counted nine stock-keeping units for fresh-cut apples, he said.
The growing importance of the fresh-cut slicing business will be worth watching, said Robbin Erickson, sales manager for FirstFruits Marketing of Washington, Yakima.
“It is a new segment of the foodservice business,” he said. The huge growth in fresh-cut demand means less need to export smaller fruit, he said. “Now we are finding it has filled that void of having to take so much risk exporting so much product,” he said.
The fresh-cut market puts a real floor on the varieties processors use, including granny smith, Pink Lady and galas, according to Randy Steensma, president of Honey Bear Tree Fruit Co LLC. “The demand for fresh-cut is growing rapidly,” he said.
Increasing the penetration of fresh-cut apples is a goal, and Freytag said Crunch Pak aims for more communication with consumers.
“We don’t have the budgets to advertise in People or Us magazine with broad appeal, but we’re trying the texting for coupons to see what results we get,” he said.
The company is offering texting for coupons through video electronic billboards in New York.
“The fact that there is such a amalgam of people from all over the world and the U.S. that are walking past those billboards every day, it is not as though we are marketing to just the New York metro area,” he said. “You are really speaking to America and the entire U.S. just because of who is there every day,” he said.
The campaign was designed to highlight product and to see the extent it is possible to drive business, he said.
“The great thing about some of these texting programs is that they are very controllable,” he said.
The video ad can be controlled as far as when it appears.
“If we find that it moves too quickly, they can reinsert something (else) into the cycle,” he said.
Even a smaller fresh crop compared to the 2012 season is still a big leap up from two years ago, Freytag said. Bigger crops in New York and Michigan will ease the pressure of who is competing for the Washington apple crop, Freytag said.
“If you are slicer in the Midwest, it makes sense you are getting apples from the closest possible production region,” he said.
Freytag said he believes Crunch Pak will enjoy double-digit growth, largely due to apple snack slices continuing to drive sales.
Long term, Freytag said the convenience and healthy eating themes will continue to favor expansion of the category.
“There is a big upside to this market,” he said.