New markets for Washington apples
Fruit in a market in St. Petersburg, Russia. Imported produce from Uzbekistan, Turkey, Poland, Moldavia, France, Belgium, and Washington was on display, along with fresh produce from Russia.
The Washington Apple Commission has been involved in overseas market promotion for more than 30 years. We’ve seen several new markets open up during that time—the largest being Mexico, which has grown from a few boxes in the early 1990s to over 8.2 million boxes in the 2004-2005 season (despite the continued restricted access caused by antidumping tariffs). We’ve also seen once-large markets decrease due to increased competition from other countries (such as Chile and China), most notably in Southeast Asia, where the commission closed its promotion program in the Philippines last season.
The commission has programs in 15 different marketing regions representing 24 countries: Canada, Colombia/ Venezuela/Trinidad and Tobago, Central America (Costa Rica, Honduras, El Salvador and Guatemala), Hong Kong, China, India, Indonesia, Malaysia and Singapore, Mexico, Middle East (Saudi Arabia, United Arab Emirates, Kuwait, and Egypt), Russia, Taiwan, Vietnam, and the United Kingdom/Western Europe.
Contracted representatives implement consumer promotion activities (such as running in-store samplings and providing information on new varieties) and provide marketing services to the import, wholesale, and retail trade to help increase their sales of Washington apples. These activities are funded with generic U.S. Department of Agriculture Market Access Program funds, which the commission applies for every year (and which are only available for commodity commissions). For the 2005-2006 season, the Washington Apple Commission received $3.8 million dollars to fund overseas promotions.
Because of the dynamic nature of global markets, we are constantly looking for new market opportunities. The largest growth markets are not always where you might intuitively think. India, for example, is still viewed by many as a poor country with no money for imported products. However, out of more than 1 billion inhabitants, roughly 300 million are classified as middle class and able to afford Washington apples. That’s a market larger than the United States! Although India is certainly not going to replace the U.S. market for Washington apple shippers, Indian consumers love our Red Delicious, and the burgeoning retail chain stores want high quality and attractive produce to fill their aisles.
With so many consumers to reach on a small budget, public relations activities are an important element of the Indian promotional program. The commission has teamed with celebrity chef Sanjiv Kapoor, who filmed segments of his wildly popular television cooking show in Wenatchee last season, and is currently working with Pogo TV, the most popular children’s channel in India. In addition to these activities, the commission’s merchandising team visits the major market of New Delhi, Mumbai (Bombay), Chennai, Bangalore, Hyderabad, and Kolkata (Calcutta) on a regular basis. We are introducing a new slogan in the Indian market for next season, “Washington Apples: Tasty, Crunchy, Sweet and Juicy” to remind consumers why they should buy a Washington apple instead of a Chinese apple (or a mango, or a pineapple). Colorful point-of-sale materials are used in wholesale markets, street markets, and shops to highlight Washington varieties and draw attention to our displays.
China is best known to the apple industry as our largest competitor, particularly in Southeast Asia, but increasingly in other markets as well. The size of their apple crop boggles the mind at roughly one billion boxes a year. However, because China overwhelmingly produces only one variety (Fuji), Washington has carved out a niche market with other varieties such as Red Delicious, Gala, and Granny Smith (although legally only Red and Golden Delicious are allowed to be directly imported into China). Initially, Washington apples were transshipped through Hong Kong, but during the past two seasons we’ve seen direct shipments into Chinese ports in the North and East jump dramatically. Direct shipments for the season through April 2006 totalled 433,000 boxes. We are helped by the rapid development of the retail sector catering to the growing middle class, who have an appetite for imported, high-quality products. As in India, these markets want to offer their customers a variety of choices in the apple category, and prefer the high quality and image of Washington apples.
The Washington Apple Commission conducts a mix of consumer- and trade-oriented activities in China tailored to the unique needs of the market. Gift giving is very important in Chinese society, particularly during major holidays such as Chinese New Year. One of our most popular consumer and trade promotions offers Washington apple gift boxes for creating colorful displays and increasing the volume of sales, which we provide to importers and retailers on a cost-share basis.
The newest addition to the commission’s export markets is western Russia. Although Russia grows a lot of apples, most of them are small and unattractive, and many of them are grown in country house orchards (dachas). Sitting next to them on store shelves, Washington apples really stand out. Both the trade and consumers are amazed at how large and shiny they are. At a recent Russian trade show, we were repeatedly asked if our apples on display were plastic!
The commission’s new representative, Irina Koziy, has a big challenge ahead of her, as Washington apples are relatively new to the markets in Moscow and St. Petersburg. Shipments last season increased over 350 percent from the previous year, and western Russia is estimated to now take 80 percent of total industry shipments to Russia (the remaining 20 percent are shipped to the Russian Far East). However, 2005-2006 season exports to Russia have dropped by almost 40 percent to 269,000 boxes, due in part to a large inventory of
Southern Hemisphere fruit in the fall which delayed our entry to the market. Since produce marketing is a new concept in Russia, trade and consumer education regarding Washington availability, varieties, and uses has been the focus of the first season. In the Soviet times, you just took whatever was available. I’m told that if you saw a line, you didn’t ask what it was for but just stood in it with the hope of obtaining something. Our goal for the Washington Apple Commission promotions in Russia is to have people standing in line for Washington apples in seasons to come!
Rebecca Baerveldt is export marketing manager for the Washington Apple Commission in Wenatchee.