Apple industry leaders weigh in on inflation's effect on consumers

Is inflation creating changes in consumer behavior toward apple purchases?

The Packer asked apple industry leaders that question this way: Do you think higher consumer inflation has caused consumers to "trade down" the apple varieties they purchase? Has inflation hurt organic demand, in your view?

Here are some of their responses:

Don Roper, vice president of sales and marketing for Honeybear Marketing LLC, Elgin, Minn.:

“With organic production being so short this year, it is hard to say that inflation is curbing demand. What we do know is that the committed organic customer is still being serviced and paying good prices but, as an industry, we will be short on supply. We are also seeing customers 'buy down' from higher-priced varieties to some of the everyday mainlines, at more moderate prices. We also feel, while not validated, that consumers are substituting to other commodities.”

Catherine Gipe-Stewart, director of marketing for Domex Superfresh Growers, Yakima, Wash.:

“We are seeing organic volume decrease, though inflation is just one factor to consider. A down crop is a significant factor as well. Nonetheless, we are seeing organic volume decrease more rapidly year-over-year than conventional. In the last four weeks ending 12-03-22, Nielsen data shows that organic volume was down 11%, compared to conventional volume down only 6%. The average price per pound is $1.87/lb for conventional vs. $3.05 for organic. Data would suggest that shoppers are trading to conventional from organic with rising prices."

Mac Riggan, director of marketing for Chelan Fresh, Chelan, Wash.:

"There are some people that will buy apples, almost no matter what their price. We will sell apples to fewer consumers this year, but they will be sold.”

Danelle Huber, senior marketing manager for CMI, Wenatchee, Wash:

“We’re seeing a decrease in volume across the entire produce department, so it would seem that, generally speaking, shoppers are sticking with pantry staples and cutting back on the 'luxury' of fresh produce, which is typical during economic downturns. Despite price increases on a percentage basis for organic produce being lower than the conventional price increases over the course of a 52-week period, 13-week data shows the organic apple category average price is $0.32 more per pound versus a $0.10 per pound increase for conventional product. Based on Nielsen scan data for the latest 52-week period ending on 11/5/22, it does show that overall organic apple volume is down just over 8%. It’s remarkable to see that even in times of inflation and what seems to be a decrease in consumer spending within the produce department, the branded/high-flavor category volume has increased nearly 26% over last year and has an average price per pound of $2.25.”

Trish Taylor, marketing manager for Riveridge Produce Marketing Inc., Sparta, Mich.:

“Initially going into the season there was some trading down, but for the most part consumers are purchasing the variety they want. Honeycrisp consumers remain loyal to their variety despite the economic climate."

Dan Davis, director of business development for Oneonta Starr Ranch Growers, Wenatchee, Wash.:

“So far we’ve seen that it has lent to some flattening of the growth on organic demand. Fortunately for us and our down crop we wouldn’t have been able to keep pace with the growing demand had some trading down not taken place. Overall demand is still outpacing our supply of organics."

Marcus Hartmann, vice president of Pacificpro Sales LLC, Bellevue, Wash.:

"Absolutely, inflation in tandem with availability and peak apple sizing has likely encouraged consumers to 'trade down.' Because apples grew smaller this season, large sizing for retail remains tight, forcing retailers to consider smaller sizing, and placing a heavier emphasis compared to previous seasons on apple bag programs in place of high color, no defect, larger apple sizing that retailers have historically preferred.”

Brianna Shales, marketing director for Stemilt Growers LLC, Wenatchee, Wash.:

“This is a tough question to answer because it is complicated to assess the effects [of] inflation when we’ve also had smaller apple crops to contend with. Certainly, prices are higher due to both inflation and less supply, but the darling of the category in terms of demand and pricing (Honeycrisp) remains strong. The volume of apples sold over the past year has remained relatively flat even with higher prices. Organic share of volume and dollars has gone down compared to the year prior, but the demand around organics (especially in packages) remains strong. Promotion is still vital to the category and needs to take place even when supply is shorter and prices are higher."

Cynthia Haskins, president and CEO of the New York Apple Association:

“Consumer inflation has encouraged consumers to choose mindfully about their food choices as they reflect on the pandemic placing a spotlight on one's health. We have seen consumers include 3-pound, 5-pound, 8-pound and even 10-pound bags of apples into their grocery carts as a convenient shop-and-go experience. We see shoppers returning the brick-and-mortar stores and utilizing online shopping resources. It is all about what is suitable for the consumer, when they want it, and how and where they want it.”  
 
Alisha Albinder Camac, owner-operator of Hudson River Fruit Distributors, Milton, N.Y.:

“Overall we are continuing to see strong movement across most of our SKUs and haven’t seen a full industrywide trend of 'trading down' on variety." 

Chuck Sinks, president of sales and marketing at Sage Fruit Co., Yakima, Wash.:

“Apple sales have been steady across all varieties. During these inflationary times, apples continue to be a healthy, affordable option for people.”

Diane Smith, executive director of the Michigan Apple Committee, Lansing, Mich.:

“We are noticing a higher demand this season for Red Delicious in larger pack sizes; this does indicate that the economy is having a small effect on consumer behavior. Conversely, Honeycrisp and EverCrisp sales remain strong at the top end of the category. As previously mentioned we do not have a large organic crop in Michigan, however, at retail our account managers are observing the organic category offerings have been scaled back this season.”