The Fruit Growers News


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Changes - Apple Industry must “Turn and Face the Strain”

By Mike Rothwell BelleHarvest Sales, Inc.

In the early 1970s, David Bowie had a hit song entitled “Changes.” The chorus of the song was “changes - turn and face the strain.” The nation’s apple industry has been moving to “turn and face the strain.” Numerous changes have transpired recently and certainly more are in the works. Some of these changes are listed below.

1. Retail consolidation - the big continue to get bigger. The end result of this trend is becoming very clear.

• Supplier consolidation

• Suppliers doing more and more of what has been traditional buying functions

• Your product has to perform, not just for the producer/shipper, but for the retailers as well. If it doesn’t, the retailer does have options.
2. Our products have to deliver. The period of sales agencies attempting to push their products through the system has contributed to poor results. The consumers have to pull them.

• It is critical to produce the varieties at the volumes that the marketplace is asking for.

• The eating experience needs to drive repeat sales.

• We need to do a better job of giving the consumer reasons for eating apples instead of other produce selections.

• The quote “We have identified the enemy, and it is ourselves” deserves some serious consideration. Shipping borderline or questionable product and having it stick does not do anyone any good if the end result is the consumer having a bad eating experience and choosing not to purchase any more apples.
3. Emphasis on service levels

• Acceptance based upon minimum pressure and almost no bruising.

• Just in time deliveries.

• 100% customer satisfaction guaranteed with either replacement product or cash refunds.
4. Technology advances

• The ethylene inhibitor 1-MCP, which can greatly enhance shelf life on apples, has the potential to increase the fresh apple industry’s chances of “delivering” to its customers. Studies are in the initial stages and much is yet to be learned. But anything which can extend pressures and therefore crispness in fresh apples, hold tremendous promise.

• The changes in grader technology just keep coming. The latest has graders that can determine the pressures and brix of the apples as they pass by sensors.

• More and more use of computers and the move toward a paperless society.
5. Federal government assistance - The $100 million Market Loss Assistance Program for the 1998 and 1999 crops appears to be just the beginning.

• An additional request for Market Loss Assistance is in the works for the 2000 crop year.

• Getting fruit and vegetables permanently included in the nation’s Farm Bill is a high priority item for a number of our trade associations (Farm Bureau, U.S. Apple Association, United Fresh Fruit and Vegetable Association). However, agreement on which funding level and in what form will generate plenty of discussion in the upcoming months.
6. Industry cooperation - We are entering an unprecedented era of industry cooperation. Trade associations, marketing associations, shipping organizations, universities, suppliers and growers are all attempting to find a common ground for the betterment of the industry. Not all of these attempts will succeed due to conflicting agendas and the requirement that all long-term relationships must be based upon trust, but some certainly will. We want to focus on only a couple of these in this article.

• East vs. West - Almost all retailers now carry domestically produced apples under one of two designations - Eastern Apples and Western Apples. They may be trying to tell us something. The time has come to give serious consideration to dropping the old regional affiliations and setting up something on a wider scale. Rolling the Michigan, New York and Pennsylvania apple committees into one larger organization promoting Eastern Apples may have merit. The United States Apple Export Council, which includes all the larger producing states except Washington, is already doing this for our export markets with some success. Consistency in message, increased influence due to size, synergies in administration, and a larger promotional pot to draw from could all be benefits of this consolidation.

• Co-ops - The recently formed co-ops in Washington and New York, certainly deserve our attention. While the initial agendas appear modest, a number of these agenda items are already being done in Michigan through our Michigan Apple Shippers Association - the size of the organizations and the players involved can influence just about every aspect of how we go about doing our business.
As you can see, we are an industry in transition. The old saying “learn from your past, plan for your future,” certainly applies. At BelleHarvest we continually strive to keep abreast on all of the changes within our industry as we attempt to position ourselves for the future. We hope everyone has a great growing season and look forward to seeing most of you in the upcoming months. Rothwell’s column was originally printed in the company newsletter: BelleHarvest Information News Source(BINS).