Good supply of both organic and conventional apples in Washington state will help retailers recover from a slow start to the apple marketing season.
Steve Lutz, senior strategist for CMI Orchards, Wenatchee, Wash., said some retailers were puzzled why apple category performance is down from a year ago.
“Because of the late harvest (in Washington) and smaller crop in the Midwest, most retailers are probably showing dollar-to-dollar decline compared with last year for the same period,” Lutz said Dec. 6.
Nielsen retail numbers for September and October show that total combined conventional and organic volume for that eight-week period was off about 8.8% compared to the same period in 2016, while dollar sales were off 7.3%.
The average combined conventional and retail price for the period was $1.64 per pound, 1.7% above year-ago levels. The average retail price for conventional apples in September/October was $1.60 per pound, up 2.6% compared with last year. The average retail price for organic fresh apples in September and October was $2.25 per pound, down 8.7% from the same period last year.
Lutz said that Nielsen statistics show that only six supermarket companies out of 150 tracked showed an increase in both dollars and volume in September and October compared with a year ago.
Good and plenty
Despite the hole dug by the slow start, Lutz said there are good promotion opportunities ahead.
“We have to sell (the crop) between now and Sept. 1 and that certainly suggests there is plenty of volume out there to jump on and rebuild dollars missed at the start of the season,” he said.
With a total fresh crop close to 140 million cartons, Washington apple marketers will offer promotion opportunities for both conventional and organic fruit.
Washington’s smaller fruit size this year — with some varieties running at 80% 100s and smaller this year compared with 20% of the 2016 crop in that range — has helped increase bag business this year, he said.
Two-pound pouch bags, often used for organic and branded apples, have seen a 21% increase in volume this year, according to Nielsen statistics for September and October.
With organic or branded apples at perhaps $2 per pound, Lutz said the two-pound pouch bag allows retailers to put a more attractive shelf price.
“If you have a two-pound bag at $3.99, that will match up pretty well against three-pound conventional apples,” he said.
Three-pound and five-pound bags are essential to promote non-branded apples, he said.
Washington f.o.b. prices showed a hefty premium for large fruit, according to the U.S. Department of Agriculture Market News Service.
On Dec. 5, Washington gala apples were $26-28 f.o.b. per carton for size 72s, compared with $16-18 per carton for size 113. Last year at the same time, size 72s were $22-26 per carton, while size 113s were quoted $18-23 per carton.
On Dec. 5, the f.o.b. price for Washington organic gala apples was $28-34 per carton, compared with $34-37 per carton the same day last year.