10:11 a.m. Karst: In terms of apple grower-packer-shippers making those 20-year horizon type of decisions and investments, what types of things are important to the future of the deal?
10:12 a.m. Armock: One of the things we are excited about in the last five years is that we have been able to turn the corner on being able to give the consumer product that we can be much more confident that their expectations are going to be met. One of those key factors is the customer going to go in and get a better eating sensation consistently. As an industry, we weren't that good at it a number of years ago.
There were literally people who bought apples in the fall time of the year and they tended to become much less likely to buy apples during the late winter and summer months. Today with the advent of SmartFresh, we deliver a better eating experience than we ever did constantly throughout the season. We think that is real positive and our business has grown because of it. And the other side of all this is the fresh cut segment of the food industry has started to grow with apple fries at Burger King and fresh apple slices at McDonalds and the causal eating restaurant industry has started to put apple slices into sandwiches and salads. So that's a segment of the business that didn't exist for us before and is starting to eat up some of our production increases.
We see real positive things coming along, so how do we capitalize on all of this and enhance it? One thing is we can now look inside that apple and find anything that might be a storage disorder, any internal problem that may be in a very limited amount of the fruit that were packing and shipping that the consumer might buy, but it takes away the possibility of disappointing them.
This is the early (development) stage of this near infrared technology. We found a couple of (capabilities) that the people who sell this who have brought to market this technology, they didn't know existed and we managed to use it to help our customers from getting exposed to (bad apples). This is all evolving and now we are able to test for brix. That is big, very big. We are going to be able to segment brix levels as we move along here. We're going to get better at it and better at taking it to market.
We really aren't quite there on pressure, but when the consumer buys apples, they have certain expectations of what that experience will be like. The number one complaint is so often a mushy apple. There is always going to be mixed maturity in these pome fruit crops, we are going to be able to separate that out and not deliver that (mushy apple) eating experience to someone. We are not far away from having that and having this whole industry adapting that. It will allow us to be that much more competitive against the citrus industry, the banana industry.