Tight apple supply shifts focus to supply assurance, Roper says
From
| 13 January 2023
Overview of apples from Washington in the U.S. market, complemented by charts from Agronometrics. Original published on January 12, 2023.
A challenging apple marketing season has meant more focus on assuring supplies and preventing gaps in fresh apple availability in 2023, said Don Roper, vice president of sales and marketing for Honeybear Marketing LLC, Elgin, Minn.
In particular, Washington state production has seen a significant decrease in tonnage relative to expectations, he said.
“The crop size in Washington was much smaller than we would have anticipated,” Roper said. “We are profiled to have 130 million case crops (young trees in the ground) and to only produce 100 million is astonishing.”
That shortfall has created havoc with the planning done with retail partners ahead of harvest.
“Plans we thought would be solid and work have to change quite suddenly,” he said. “Also, it is a small crop in Washington, and it is not, in particular, a great condition year. Packouts are being challenged, color is on the light side and the fruit just would not be considered a vintage year. This will cause issues as we move into the spring and summer.”
Honeybear is a family-owned vertically integrated production distribution company and marketer of apples, pears and cherries.
The company provides retail partners with premium fruit year-round using its multiregional/hemisphere growing base, Roper said. The company markets conventional and organic apples, pears and cherries from both the Northern and Southern hemispheres, he said.
With production and distribution facilities in Washington, the Midwest and the Northeast, Honeybear ensures supply and lowest landed cost programs for its customers, Roper said.
While Honeybear’s Eastern U.S. apple production has rebounded significantly from a shorter crop last year, that increase has not filled the gap caused by the smallest Washington state crop in nearly eight years, he said.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
“Additionally, color and condition in Washington has not been as good as previous years, so the amount of ‘premium’-grade fruit has been a challenge,” he said. “We have worked with all of our retailer partners with much focus on supply assurance and making sure there are not gaps on the retail deck.”
For instance, the Washington Honeycrisp crop is down, making for a tighter market.
“We have the unique ability to service customers with a crop that’s grown closer to home with Midwest-grown fruit,” he said, noting full-color Honeycrisp volume from Minnesota, Michigan and Wisconsin will help meet demand through January.
The Chilean Honeycrisp crop is shaping up nicely, and Honeybear’s import program should provide some price relief as that product enters the market in the spring, Roper said.
Pazazz, the company’s premium Honeycrisp cross variety, is what Roper calls a “fabulous tasting” late-season apple that has become a consumer favorite.
“With supply coming from multiple growing regions, including crop from Chile for the second season, Pazazz is an excellent alternative for Honeycrisp lovers year-round,” he said.
The bigger crop in the East has provided many new opportunities for Eastern apple growers-packers-shippers, and this alone provided many retailers with an alternate supply source and, in most cases, a direct freight advantage leading to lower landed cost programs versus fruit packed in Washington, Roper said.
“At Honeybear, we are the only company with multiregion growing, packing and distribution as we have very significant operations in Washington and the Midwest,” he said. “We utilize all our growing zones this fall and winter to ensure supply assurance and deliver on lowest landed cost programs to our retail partners.”
PROMOTION POSSIBILITIES
For the spring months, Roper sees several opportunities for apple promotions.
Honeybear still has a large crop of small galas and fujis in both Washington and the Midwest.
“This should provide some really strong bagging promotions through the early part of the year,” he said. “Second, imported apples will start to hit the East Coast as early as March 1, and this will provide some price relief on several key varieties in the marketplace.”
Retail partners are already setting up late spring and summer import apple promotions to ensure strong sell-through opportunities, he said. “From imported Chilean Honeycrisp to complete apple and pear organic solutions, we feel there will be strong stocks available and some really great promotional opportunities.”
Honeybear has a robust marketing plan to promote its Pazazz variety apple. The plan includes geo-targeting shoppers on social media with playful ads wherever Pazazz is on the shelf.
“We have a network of influencers creating unique content around the physical and mental health benefits of eating apples,” he said. Podcaster and “joyologist” to the stars Tricia Huffman promoted Pazazz apples to her audience as a simple daily way to add joy and self-care.
In addition, Honeybear will team up in February during Cancer Prevention Month with the American Institute for Cancer Research. Celebrity chef and cancer survivor Elle Simone will encourage consumers to eat Pazazz apples for the prevention of certain cancers.
Roper said millions of impressions will be generated via a variety of media platforms and a Pazazz-branded landing page on the American Institute for Cancer Research website.
“AICR’s risk assessment tool will be accessible via QR code on in-store and digital assets available,” Roper said.
PACKAGING PROGRESS
Seeking to reduce the use of plastic in packaging, Honeybear has converted its Pazazz pouch to a #2 recycle plastic this season.
“It’s a steppingstone and certainly better than nonrecyclable material,” Roper said. “We added a QR Code to every pouch that allows consumers to find the closest drop-off site simply by entering their ZIP code.”
Honeybear packed more paper totes this year than ever before and also has a couple of paper box and basket options that the company is hoping to test with its retail partners, he said.
“With so many of our customers in private label, we want to make sure we are consistently executing on their direction yet providing them with unique packaging alternatives to consider,” Roper said.
EASING TRUCK RATES
A global economic slowdown should lead to less demand for over-the-road transportation in the coming months, Roper said.
“This will lead to less demand for OTR capacity and is already pulling down rates in several lanes,” Roper said. “I do feel, however, that the East Coast import season will be challenged this year. It appears many exporters, reacting to the mess on the West Coast last year, have decided they are better off moving product to the East Coast importers. This will put more demand on logistics than in the past, so we could see the Eastern lanes bucking the national trend.”
The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.
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