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For apple growers who are hoping that new varieties will be the key to staying profitable in the future, Steve Lutz has some sobering thoughts.

While new varieties will create excitement and vitality in the apple category, the failure rate will be extremely high, he told growers at a recent Fruit School on ­Competitive Orchard Systems.

Lutz, who is vice president of a consulting firm called The Perishables Group, said that of the 30,000 new products introduced at retail annually, less than 1 percent are still being successfully marketed five years later.

"We have to accept failure as part of the equation," he said. " "It would be wonderful if you could sit back and have a crystal ball and predict what the winners are going to be, but it’s not going to be that easy. Part of the investment strategy is there will be some successes, but we will fail along the way."

Geneticists are developing genetic tools to help fruit breeders speed up the development of new varieties and take some of the guesswork out of it. There’s talk of "designer apples," bred specifically with traits that appeal to consumers, such as good flavor and crispness.

Lutz was asked what would happen if 50 high-quality designer apples became available.

"I think what you would have is a mess," Lutz replied.

Of the 500 items in the produce department, apples return relatively few dollars per square foot of display space, compared with cherries and grapes, for example. Retailers will not devote more space to apples, Lutz said, and they don’t have room to display 50 varieties.

"We’re going to have to figure out what varieties
are going to be the winners, what varieties are rotated, and what varieties are permanent. It’s going to be a ­challenge."


New varieties can’t just be replacements for other varieties. They have to be better, he said, and they must be able to survive the existing distribution chain. After the apple gets to the retailer, it has to be able to sit on the retail shelf unrefrigerated for 24 hours, and maintain its quality for two to three days after the consumer buys it. That was one of the problems with Jonagold, Lutz said. A week after harvest, it was difficult to find a better apple, but in the retail store, it did not generate repeat sales.

Lutz said producers sometimes have the mentality that if they produce something people will buy it, but there are many examples in the produce industry where production of a new item has been ramped up and gone into the market at an accelerated pace, only to disappear completely from the retail shelf.

When producers have invested perhaps $3 million in bringing a new variety into production, it’s important to have a sound marketing program to ensure that the value of their investment doesn’t drop to zero, Lutz said.

New varieties are no longer new, he pointed out, and the process for introducing a new variety is more formal than it used to be. Many of the produce items that used
to be seasonal, are available yearround, leaving few ­windows for new items.

"It used to be you could show up with a new variety and generally get the retailer interested just based on ‘That’s a good idea.’ Now, because of the failure rate and the competition for shelf space, they expect us to show up with a marketing plan.

"If that product gets on the retail shelf and doesn’t perform relatively quickly, that retailer is going to say, "I don’t need it. I’m in the business of renting out shelf space to the highest possible return. If you can’t make it, I have a whole line of products just waiting to occupy that shelf space."


Retailers are focused on category performance, and tracking capabilities at retail are better than they’ve ever been. A new product must make the apple category stronger.

"What they need are products that increase sales," Lutz said. "They don’t want duplicated products that simply add items but don’t add incremental sales. If a new item can’t raise the performance level of the retailer, it’s generally a net loss. That has to be our standard as well." The so-called "club" approach to variety introduction makes sense, Lutz said, because the club appproach enables the marketer to leverage the loyalty of its ­customer base. However, there are disadvantages.

Restricted-volume varieties have limited exposure to the consumer, and if they are marketed through a single store or a single market, the supplier is vulnerable to the whims of the one buyer. If the retailer says they don’t want the variety any more, the marketer is in deep trouble.

Anyone thinking about planting and investing in a new variety should find out how its marketing company plans to help them recoup their investment, Lutz suggested. If they’re not paying money for marketing, there isn’t a marketing plan.

"Talk to the marketer," he urged growers. "Find out what their plan is. You have to be prepared to invest in marketing."


The marketing effort must start with a strategy, he said, whereas the tendency is to go straight to tactics. Shippers are generally good at tactics and understand retail relationships, but often their ability to think long-term about how to maximize the investment that’s being made in bringing the product to market is not their strong point, Lutz said.

Producers need to understand who is going to buy the variety and why, and which variety it will replace.

"What’s the swap that’s going to be made? The retailer will expect an answer to that question."

Lutz was asked what he thought about the ability of a product to sell itself, generate repeat purchases, and create buzz, as Honeycrisp has done.

"It’s going to be difficult for lightning to strike twice," he responded.

Honeycrisp was a great product with a wonderful name that came onto the market at the perfect time, when there was not much else going on in terms of new apple varieties, in his opinion.

"I think it was serendipity, rather than marketing," he said, noting that it’s risky to make a major investment in a new variety with a marketing program based on serendipity. "And I see an awful lot of that," he added.

Repeat purchase is important, but the consumer has to buy the apple in the first place.

"You’d better have a way to figure out what’s going to get that product off the shelf and into the basket," Lutz said. "With these new varieties, your problem will not be distribution. You will find a retailer somewhere that will take your product, I guarantee you. The problem is getting the consumer to take it through the front door versus having the retailer take it out the back door to the dumpster because nobody bought it."

The Fruit School was presented by Washington State University Extension and the Washington Tree Fruit Research Commission.