Many major U.S. apple packers and marketers are offering exclusive varieties to their customers in an effort to gain a competitive advantage. But some are wondering if there will soon be too many apple varieties on the market.
Brian Sand, sales manager at Auvil Fruit Company, Orondo, which is the only Washington State company producing commercial quantities of the Canadian variety Aurora, said it’s a big advantage to have an exclusive variety to offer certain customers. “It’s a huge positive,” he said. “It does build excitement. Every retailer wants something special, something to promote, something to differentiate himself from the store next door.”
But Suzanne Wolter, marketing director at Rainier Fruit Company in Selah, Washington, thinks it will become more difficult to interest retailers in more varieties in the future, and by the time some of the newer varieties come onto the market, the excitement could be waning.
“Requests from retailers started coming about six years ago, and it takes four to six years to bring an apple into production,” she said. “It will be interesting to see how many apple varieties will be standouts and will make it. Any grower who’s got it in the ground knows the amount of investment they have had to put into it before they ever see any kind of return on it.”
Rainier has two exclusive varieties currently. It has Lady Alice, a chance seedling discovered by a Yakima, Washington, area grower, and it has the North American marketing rights for Junami, an apple bred in Switzerland, where it is known as Diwa. The company will sell its first Junami apples this month.
Scott McDougall, vice president of McDougall & Sons in Wenatchee, Washington, also wonders how many more new varieties retailers will make room for. His company produces the New Zealand varieties Jazz, Pacific Rose, and Envy, and in 2002 secured the U.S. production and marketing rights for the Canadian variety Ambrosia.
“When we started this program, I think it was probably pretty intriguing,” he said. “But since then, there have been so many extra varieties that have come on that things are getting a little bit cloudy in the marketplace.”
Also, it takes a lot of time and money to launch a new variety, he said. “I think it just becomes harder and harder to launch an apple. It’s getting more difficult to get buy-in from retailers to give you the shelf space. It was easier when we launched Ambrosia than it is today to get into the marketplace, just because there’s so many new varieties. At the end of the day, you just wonder how many of these varieties retailers are going to be willing to get behind.”
The advantages of an exclusive variety must be weighed against the costs and difficulties of managing the various varieties, he added. There are licensing or franchise fees and, in the case of the ENZA varieties, marketing royalties to pay. If a variety can return $300 or $400 a bin, then licensing fees of, say, $2,000 per acre would seem insignificant. However, with the recession, consumers are more price conscious and might not be willing to pay the premiums they paid before.
McDougall said his company is not actively looking for another exclusive variety. “I think it helps, probably, but if you had all high-colored Fujis and Galas and just good mainstream product, I would assume your retailers are going to be fairly happy.”
Don Armock, president of Riveridge Produce Marketing at Sparta, Michigan, said four or five years ago, he was actively hunting for new varieties to market and saw many options at the European trade show Fruit Logistica.
“I was a bit taken aback by how many varieties were out there that everybody was touting as the greatest rival for the new century,” he said. “Things I dismissed out of hand are now the new exclusive variety for individual shippers in the States. I think it’s getting to be a much more crowded marketplace as far as new varieties go. In my discussions with retailers, some of these varieties are not getting very good sell-through at the retail level. The retailers—while they are open to new varieties—are a lot more cautious than they were five years ago.”
Armock, who is the exclusive U.S. marketer for Red Prince, said he’s testing another new variety but is also more cautious than he was in the past because he’s only got a certain amount of risk capital he can afford to invest and take a loss on.
“You can do promotions and in-store sampling, and all kinds of things to capture the consumer’s imagination, but they’re exposed to so many different things every day, to get pull off the retail shelf is very difficult,” he said.
Jim Hazen, general manager at Broetje Orchards in Prescott, Washington, said that even though retailers already have lots of varieties to choose from, everyone—whether a grower, packer, marketer, or buyer—is still looking for the next big thing. Broetje has exclusive North American rights to the Czech-bred variety Opal, which is marketed through First Fruits Marketing of Washington. Broetje is also producing the New Zealand-bred variety Sweetie.
“I truly think everyone is looking for the next Honeycrisp, and I do think there’s a certain excitement on the part of retailers, even though there are so many new varieties out there and so much competition for the limited shelf space,” Hazen said. “On the retail side, I think they’re interested in offering their consumers something different that their competitor might not have. It gives them a perceived advantage.
“I do think it’s an important component of leveraging your ability with certain customers to drive sales for them based on just that exclusive variety or even to maybe drive sales across your entire manifest because you’re giving them access to this variety,” he added. “It opens up a window of opportunity.”
Tim Welsh, horticulturist with Columbia Fruit Packers in Wenatchee, Washington, which has an exclusive U.S. license for the Kiku apple, believes the ability to offer exclusive varieties is important. Columbia Fruit and Chelan Fruit Cooperative also share the U.S. production and marketing rights for the Italian variety Rubens.
“It gives us an added value to our whole fruit manifest,” Welsh said. “If there’s a desire for something exclusive, we can provide it, and we can also provide the rest of the varieties.”
Mac Riggan, vice president of marketing at Chelan Fresh Marketing (the marketing arm of the Chelan Fruit Cooperative), says it’s important to have the variety a consumer wants. That can bring them into the store and keep them there to pick up the rest of the business.”
One of the problems he sees, though, is that many of the bicolored apples look alike. “Fujis can look like Braeburns, and Braeburns can look like Cameos. They do look a lot alike. People say we’re all looking for the blue apple, and you can laugh, but that’s kind of what we’re looking at.”