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Getting to the Core of the Apple Market

Growers and sellers predict seasonal supply
Apple Spotlight_MS

Suppliers are excited about the quality and quantity of this year’s apple crop—even though it’s still early for definitive figures. Regardless, growers large and small are continuing their quest for new varieties, hoping one will equate or surpass the popularity of Honeycrisp.

For the most part, weather in the top growing regions has been cooperative, promising a successful crop for both longtime and contemporary favorites. In addition, both organic and conventional varieties continue to thrive as top exports. Let’s take a more detailed look at what to expect from the fall apple crop, from trending varieties to production projections, region by region.

In the West
Oregon, Idaho, a few other western states, and British Columbia produce apples, but by far the largest grower in the region and entire United States is Washington. Weather in the eastern portion of the state, where tree fruit grows best, has been good for the most part according to Roger Pepperl, marketing director for Stemilt Growers, LLC, headquartered in Wenatchee.

Temperatures, Pepperl notes, were “extremely cool and the bloom was late, which can delay the season seven to ten days later than normal, which would have the biggest impact on early Gala and Honeycrisp sales.”

Even though remaining on the tree longer than usual helps apple quality because the fruit matures in a cooler harvest window, Pepperl says growers do miss some of the back-to-school promotional window. In turn, this could lead to reduced sales for some items, like fresh-cut fruit bags for lunchboxes.

Promotional efforts
Rainier Fruit Company in Yakima has popularized the state’s apples in a novel marketing push—by becoming a sponsor of the famed Boston Marathon. Everyone involved with the race gets to sample Washington apples.

“It was a natural fit for us, sponsoring the ‘holy grail’ of all running marathons,” comments Andy Tudor, director of business development for Rainier Fruit Company in Yakima, WA. “We produce healthy products, so why not align with an event that promotes a healthy, wholesome-to-the-core lifestyle? All 50 states are represented and many countries at the marathon.”

In Idaho, Symms Fruit Ranch, Inc. in Caldwell has focused its promotional efforts on new ways to package apples. Sally Symms, director of sales for the grower-shipper, says small bags of apples holding two or three pounds are attractive to on-the-go shoppers. The company is also experimenting with ways to wrap sliced apples to provide convenient, ready-to-eat fruit for consumers. Both types of packaging are designed to motivate shoppers to buy and eat more apples.

Traveling south, California reigns as the second largest exporter of U.S. apples, sending the fruit to 27 countries. Its production ranking comes in at fifth nationally and Golden State apples are the first to be harvested in the region, with the season running from mid-to late-July through October. Galas, Fujis, Granny Smiths, and a host of other varieties will hit retail shelves in the summer and fall.

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Suppliers are excited about the quality and quantity of this year’s apple crop—even though it’s still early for definitive figures. Regardless, growers large and small are continuing their quest for new varieties, hoping one will equate or surpass the popularity of Honeycrisp.

For the most part, weather in the top growing regions has been cooperative, promising a successful crop for both longtime and contemporary favorites. In addition, both organic and conventional varieties continue to thrive as top exports. Let’s take a more detailed look at what to expect from the fall apple crop, from trending varieties to production projections, region by region.

In the West
Oregon, Idaho, a few other western states, and British Columbia produce apples, but by far the largest grower in the region and entire United States is Washington. Weather in the eastern portion of the state, where tree fruit grows best, has been good for the most part according to Roger Pepperl, marketing director for Stemilt Growers, LLC, headquartered in Wenatchee.

Temperatures, Pepperl notes, were “extremely cool and the bloom was late, which can delay the season seven to ten days later than normal, which would have the biggest impact on early Gala and Honeycrisp sales.”

Even though remaining on the tree longer than usual helps apple quality because the fruit matures in a cooler harvest window, Pepperl says growers do miss some of the back-to-school promotional window. In turn, this could lead to reduced sales for some items, like fresh-cut fruit bags for lunchboxes.

Promotional efforts
Rainier Fruit Company in Yakima has popularized the state’s apples in a novel marketing push—by becoming a sponsor of the famed Boston Marathon. Everyone involved with the race gets to sample Washington apples.

“It was a natural fit for us, sponsoring the ‘holy grail’ of all running marathons,” comments Andy Tudor, director of business development for Rainier Fruit Company in Yakima, WA. “We produce healthy products, so why not align with an event that promotes a healthy, wholesome-to-the-core lifestyle? All 50 states are represented and many countries at the marathon.”

In Idaho, Symms Fruit Ranch, Inc. in Caldwell has focused its promotional efforts on new ways to package apples. Sally Symms, director of sales for the grower-shipper, says small bags of apples holding two or three pounds are attractive to on-the-go shoppers. The company is also experimenting with ways to wrap sliced apples to provide convenient, ready-to-eat fruit for consumers. Both types of packaging are designed to motivate shoppers to buy and eat more apples.

Traveling south, California reigns as the second largest exporter of U.S. apples, sending the fruit to 27 countries. Its production ranking comes in at fifth nationally and Golden State apples are the first to be harvested in the region, with the season running from mid-to late-July through October. Galas, Fujis, Granny Smiths, and a host of other varieties will hit retail shelves in the summer and fall.

Although the state’s years-long drought is mostly a terrible memory now, Californians want to take steps to prevent another disaster of this ilk. Several bills aimed toward long-term solutions have been proposed, while a number of California growers have gone to the table with U.S. Apple’s Risk Management Task Force and Agrilogic Consulting to develop crop insurance programs that provide protection for fruit and trees.

Trending & new varieties
Among Stemilt’s top selling varieties are Gala, Honeycrisp, and the newer Piñata apple, in both organic and conventional selections. Piñata, the offspring of three heirloom varieties, is bred for culinary uses, Pepperl says.

SweeTango, with direct lineage to Honeycrisp and Zestar, should hit the market a week ahead of Honeycrisp.

Stemilt’s newest apple, called Rave, will only make a limited appearance this year, though planting continues at a rapid pace.

In the Midwest
Wisconsin, Illinois, Indiana, Kansas, and other states in and around the Midwest cultivate a smattering of apples, but Michigan produces the most, garnering second place in the nation.

With more than 11 million trees, apples are the state’s most valuable crop, ahead of other local favorites like tart cherries and cranberries. In the fall, growers harvest well over a dozen varieties for nearly a billion pounds of the healthy fruit.

The state’s rich sandy soil and climate, influenced by Lake Michigan, create ideal growing conditions, says Nick Mascari, vice president of sales for All Fresh GPS, LLC in Comstock Park. Most of the apple trees in the state grow close to Lake Michigan because of the well-drained, nutrient-dense soil.

Despite some freezing temperatures early on, weather was mostly good, Mascari says, unlike in the past. “We did have a small freeze, so our production will be down about 10 percent from what it was last year, but the entire state should yield about 30 million boxes. It’s a good healthy, crop,” he promises.

Like other growers in the state, part of All Fresh’s crop (around 5 percent) is destined for processing. Statewide, more than half the apples grown will be sold to processors for apple sauce, juice, and pie.

Trending & new varieties
“Our top-selling varieties are Gala, Honeycrisp, and Fuji,” says Mascari. “Some of our newer varieties include SweeTango, Kiku, and Kanzi.”

Touted as what might be the world’s sweetest apple, Kiku has a crisp, juicy texture, making it a popular snack or for adding to salads, pies, and sauces. All Fresh is one of only a few growers cultivating the Kiku.

Kanzi, a blend of Gala and Braeburn, offers a well-balanced sweet and sour flavor. The new variety reportedly brought in more dollars and increased volume in the first four months of the 2016-17 season than any other apple. And Kanzi is just getting started—growers harvested their first major crop last fall in Washington and Michigan.

In another year or two, Mascari says to watch for Evercrisp, which has a sweet flavor, texture like a Honeycrisp, looks like a Fuji, and has a bonus: it’s bred for more lengthy storage capabilities.

In the Northeast
Pennsylvania and New York produce the most apples in the Northeast region. As one of the U.S.’s top five apple-growing states, Pennsylvania applied to make the apple its state fruit in 2016—the sixth state to do so in the nation.

Not surprisingly, the Big Apple’s home state is a major producer, ranking second in the nation with an average output of nearly 30 million bushels from close to 700 commercial growers. The state is divided into six growing districts and the top five counties by production are Wayne, Ulster, Orleans, Niagara, and Clinton.

New York Apple Sales ships domestically to retailers in the Northeast, Southeast, Southwest and Midwest, especially Costco, Walmart, and Sam’s Club.

Internationally, apples are shipped to Israel, the Philippines, Singapore, India, and Vietnam, but Jim Allen, vice president of marketing for New York Apple Sales, Inc. in Castleton, says this market has slowed in the past few years.

“Weather is always a factor, but we’re very pleased we’ve had a normal spring—which means a normal fruit-set season—so we have every reason to be optimistic,” Allen says.

Trending & new varieties
Allen says the most popular varieties the company handles are McIntosh, Gala, and Honeycrisp, while McIntosh remains a legacy variety in the area, he notes.

Cornell University’s well-known breeding program is responsible for popular varieties like RubyFrost and SnapDragon; both seem to love the state’s climate, which shows in the volume and quality of the fruit.

“RubyFrost, SnapDragon, and Smitten in New York, Michigan, and Washington, and Koru out of New Zealand have a lot of potential,” shares Allen. “We work together to grow these as club varieties.”

Club varieties are patented, trademarked, and controlled so that only a select group of growers can produce and sell them. Yet the crop volume continues to rise as growers transition to higher-density plantings, according to Allen. The number of trees planted in New York has increased dramatically in the last several years in response to climbing demand.

Troubles & Struggles
For the past 20 years pomologists (apple scientists) have not only bred apples for better taste and texture, but sought a solution to flesh browning due to oxidation. And although Okanagan Specialty Fruits in Summerland, British Columbia, has found an answer, supply and consumer response has been mixed.

Yes, Arctic apples don’t turn brown after slicing or when exposed to oxygen, due to enzyme reduction during genetic modification. Unfortunately, for many, genetic modification and genetically modified organisms (GMOs) remain controversial. Although Arctic apples were approved by the U.S. Department of Agriculture, some groups are vehemently against genetic modification and frighten many retailers away from carrying the nonbrowning apples.

“The Arctic apple has been approved, is being planted in limited quantity, and should be available soon in limited quantity,” says Todd Fryhover, president of the Washington State Apple Commission. “However,” he concedes, “I know of no Washington growers planting this apple.” ­

David Henze, president of Fourth Leaf Fruit Company in Yakima, says his company doesn’t currently market Arctic Apples and doesn’t have plans to do so. But his business, one that partners with independent growers, takes the position that if biotechnology is favorable to one of the supplier’s growers and provides a crop that generates benefits for the grower, environment, and consumer—it’s a good thing.

Symms says the Arctic apple is an interesting concept and she found the flavor outstanding when she tasted one. Consumer reaction and acceptance, however, are key. “It’s difficult to know if the ‘GMO’ label will affect sales and acceptance in the marketplace,” she notes.

Although the success of Arctic apples may worry some growers, another pro-blem keeps all of them up at night.

Lack of labor
Apples are still picked by hand, as most technology is still incapable of consistently identifying ripe fruit. Having the workers needed for harvest depends on what transpires with state and federal immigration laws, along with various other impediments to get workers to the orchards.

According to Henze, labor remains at the forefront of all the issues in the apple industry. Fourth Leaf tries to maintain its workforce with a consistent and ongoing packing schedule, opportunities for advancement, paid vacation, quarterly events and celebrations, and English lessons for anyone interested. Workers can also move from the orchards to the packing line for added job security throughout the year.

“Labor is always a huge issue and it’s not getting any better,” observes Pepperl. “At Stemilt, we use H-2A [guest worker program] for orchard harvest workers, continue to build housing for the workers as we build orchards, and have platforms instead of ladders to increase productivity and safety. We also treat people as our biggest asset, which all companies should do.”

Despite the costs and paperwork, Mascari says the H-2A program is still more cost effective than adopting some of the tech breakthroughs coming available. “We’re currently testing new technologies in the orchards, but since orchards aren’t standard and our pickers need to make many important decisions on harvesting the right fruit, manual labor is still the most effective route for us. I believe we’ll see a blend of modern technologies and human labor sooner rather than later,” Mascari continues, “to help relieve some of the stressors on the labor force.”

The growers, pickers, and packers aren’t the only workers affected by the apple harvest—the transportation industry is also influenced by yields and problems.

FRESH FORUM
Are you devoting more acreage to new varieties?

Nick Mascari, All Fresh GPS
Yes; we’re pushing out a lot of old varieties and growing more Honeycrisp, Fuji, and Gala. We’re also testing new ones like Cosmic Crisp, SweeTango, Kanzi, and Kiku. Michigan grows a punchy, juicy apple.

David Henze, Fourth Leaf Fruit Company
Our grower/partners are definitely devoting acreage to new varieties. However, we have some concerns there will be so many new varieties that the consumer will have a hard time understanding the specific brand promise. We’re developing branding above the individual variety level.

Jim Allen, New York Apple Sales
As a shipper, I still see Delicious as our number one seller, but we also emphasize newer varieties like Honeycrisp, and club varieties including Cosmic Crisp, Koru, Jazz, and Envy.

Andy Tudor, Rainier Fruit Company
Rainier is very committed to farming organic and we have been for almost two decades now. We grow…apples, pears, cherries, [and] blueberries with the best methodology.

Roger Pepperl, Stemilt Growers
We continue to plant the newest varieties like Cosmic Crisp, Royal Honeycrisp (a higher color and prettier version of Honeycrisp), Premier Honeycrisp (an early harvester), and Aztec Fuji (high color, great flavor, and very storable). We’ll also increase the SweeTango plantings.

Sally Symms, Symms Fruit Ranch, Inc.
We’re always working on growing and planting new trees each year, and recently dedicated new acreage to an early season Gala. Our new planting will have its first crop next season (2018); and the timing ideally will fall between the last week in July and second week of August.

Shippers Weigh In
A number of freight businesses in Washington State depend on a flush apple crop. This year’s apple business (last fall’s harvest) is good, but not quite as good as the past couple of years, says Scott Murphy, president of Northwest Brokerage Services, Inc. in Yakima. Approximately 85 to 90 percent of Northwest Brokerage’s business is hauling apples, with the rest comprised of other fruits and vegetables grown locally.

“I’m guessing (the decrease) is because of the strong export market, and the slight change in retailers retaining their own transportation companies,” says Murphy. “We’re still holding our own, but there’s been a slight decline in the amount of loads we haul each week.”

Lonnie Welch, president of H & S Freight Agents, Inc., also in Yakima, is pretty optimistic about 2017 and believes this year’s apple shipments will increase over last year’s numbers.

According to some estimates, Welch thinks supply will exceed last season’s crop. Sixty percent of his company’s business is tied to hauling apples, he says.

Another prediction for a larger apple crop this year comes from Marcus Hartmann, vice president of operations and sales at Pacificpro, Inc. in Bellevue, WA. Washington’s apple crop this season will peak on apples about two sizes smaller (88/100 count) compared to the 2016 crop, Hartmann says. He also anticipates more club varieties and a much larger organic crop on multiple varieties this year.

“We anticipate seeing additional growth,” predicts Hartmann, who says apples represent the vast majority of the company’s monthly shipments out of Washington. Success, he says, can be achieved through “flexibility and the ability to reduce the number of picks for long-haul trucks to maximize their drive time.”

Image: Boiko Y/Shutterstock.com

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