Apple industry marketing experts are feeling pressure to find markets for an Ambrosia crop that will more than double in British Columbia, Canada, in the next five years.
That growth pits Ambrosia against new club varieties and existing varieties for valuable store space.
The dramatic increase in the Ambrosia crop through new plantings, along with the growing number of new club varieties and growing pressure to market the fruit, comes as worldwide apple consumption remains flat.
British Columbia growers produced 650,000 cartons of Ambrosia in 2015, Lance McGinn, BC Tree Fruits director of sales, told more than 200 growers and industry representatives at February’s B.C. Tree Fruit Horticultural Symposium in Kelowna, British Columbia. By 2020, Ambrosia production is expected to be 1.5 million cartons, a 131 percent increase.
“The challenge is how to move double the volume of production, how to get it to stand out,” McGinn said. “We have to back this variety with marketing funds to develop programs that help the variety perform for our customers. We must focus on the consumer and create excitement around Ambrosia.”
Some markets offer a bewildering range of choices. McGinn said there were 17 varieties of apples on display in a market in Berkley, California, recently.
“Retailers have many new apple varieties to choose from these days. They are only going to carry those that perform for them — those that make them money. If they don’t perform they are out the door,” he said.
McGinn said retailers want in-store demonstrations, display contests, point-of-sale materials and flier activity to help draw attention and move product. He is confident his agency will be able to sell the projected increase in Ambrosia volumes.
“We have to find ways of pulling market share away from current mainstay varieties as well as new, highly funded club varieties such as Cosmic Crisp, Envy, Jazz, SweeTango, Opal, Kanzi and many other new emerging varieties,” he said. “We have to defend our existing turf and defend our varieties already in the market.”
McGinn said there are untouched markets and room to grow in the eastern United States and Canada as well as elsewhere in the U.S., where BC Tree Fruits can make a strong stand. Marketing officials also plan to generate more demand by breaking into new markets and creating more awareness for Ambrosia.
Having a marketing strategy that’s coordinated, strategic and profitable is critical to moving product where consumers have a range of choices, Chris Willett, Washington-based marketing manager for international produce company ENZA, a subsidiary of T&G Global, told growers.
ENZA manages the New Zealand varieties Jazz, Envy and Pacific Rose through its managed variety program, made up of some 50 independent Washington growers with operations ranging in size from 60 acres to over 5,000 acres.
These growers currently produce 2.2 million cartons of apples in the state and expect to produce up to 5 million cartons by 2020.
Willett says the program offers increased farm-gate returns, exclusivity, consistent quality and improved planning around supply and demand, as well as brand and promotion. Some varieties have a limited window in the market, which helps control quality and focus marketing efforts.
“Our go-to-market strategy is coordinated and strategic,” he said. “There are 14 varieties coming to market, and that number will continue to grow. There’s a lot of fruit coming into the system.”
New club varieties have catchy names like Lady Alice, Piñata, SweeTango and Rockit. The name is matched with an equally engaging logo and graphic treatment that’s used on the apple carton, large in-store displays, company trucks, transit shelter ads and graphic wraps on transit buses.
Marketing costs for managed varieties can range from a fixed cost per box to a percentage of the sale price or a combination of levies. Willett said marketing costs for ENZA is about 2 percent to 8 percent per box.
Since 2001, B.C. Ambrosia growers have paid a per-carton levy to fund research and promotional activities supporting Ambrosia as a premium variety.
Growers are considering a five-year renewal of the levy, which is proposed to drop from $1 to 80 cents per carton of fresh-market Ambrosia apples.
“When you look at the cost of some of the (marketing) programs, it’s kind of overwhelming,” McGinn told growers as he outlined his marketing plan for Ambrosia. “Our challenge is to work toward changing consumers’ buying trends, changing consumers’ minds, changing consumers’ tastes, educating the consumer and creating more awareness for the variety.
“Ambrosia is a premium variety with a premium price. U.S. retailers have told us B.C. Ambrosia tastes better and is better quality. We have to get people interested,” McGinn added.
That means encouraging consumers to taste the apple. According to the findings of an Oppy/Lux Insights study cited by Willett in his presentation, 99 percent of 900 survey respondents said that when trying a new apple, taste is somewhat important or very important.
The texture of the apple is important to 96 percent of respondents, while the importance of health benefits (71 percent), where the apple is grown (71 percent) and the different uses of the apple (57 percent) all fall off significantly.
Marketing specialists on both sides of the border will be using all of their promotional savvy to ring up apple sales for grocers, growers and consumers, but will it be profitable?
“Will market returns stay at current levels when overall Ambrosia tonnage doubles in B.C. and larger volumes are being produced in Washington state?” McGinn asked. “The simple answer is probably not. But how much will returns change when the crop volume doubles? It all depends on how effective we are at creating more demand.” •
– by Wendy Stewart, a freelance writer based in Penticton, British Columbia.
In the “Ambrosia Surge” article printed on page 44 of the April 1 issue, Chris Willett of ENZA noted that there are 14 new managed varieties coming to market. Willett was referring to managed/club varieties marketed only by select large Washington-based growers and marketers. That context was lost due to an editing error. Willett also said that marketing costs for ENZA are between 2 percent and 8 percent per box. He was referring generally to marketing costs for all managed varieties.
Good Fruit Grower regrets the errors.