I am writing this article after reading the Good Fruit Grower November edition which features apple marketing and “Coping without the commission.” The topic is certainly timely with the beginning of another apple marketing season. I have also just returned from a two-week trip to southeast Asia where I visited four countries with astonishing economic growth, transportation systems that appear to surpass those of the United States, and read of the amazing initial public offering of a major Chinese bank that generated $21 billion in the largest IPO ever. When you compare this to the total value of the 2005 Washington apple crop of $1.25 billion, it lends a new perspective to the relevance of our industry worldwide.
With that in mind, one wonders if the federal court ruling in 2003, which by the way forced the Washington Apple Commission to stop all activities, not just domestic promotions, was a blessing in disguise. With the mediation efforts of federal magistrate Lonnie Suko, an agreement was negotiated with all parties to continue some functions of the commission, while allowing time to present and pass new legislation that would enable the commission to continue some activities going forward. This included export promotion as well as funding of industry organizations and the protection of the intellectual material (which includes the Washington Apple logo) developed over the years by the commission. Growers have spent something over $500 million since 1937 in establishing this brand worldwide. Chinese marketers counterfeit the logo almost monthly in an attempt to achieve some resemblance of Washington quality standards as well as price. Part of the challenge in this new marketing environment is to move to private efforts that will build on the Washington brand and add to it going forward.
Return to the land
Marketing and the ability to sell our product at a price that will return enough money to the land (read “grower”) are extremely important to the agricultural industry as well as the apple industry. To remain viable, the industry must have an economically strong grower community. I noted in one of the Good Fruit Grower articles the statement was made by Steve Reinholt that “Oneonta’s real customers are the growers. As an industry, everyone needs to remember that we have to take care of our buying partners…but without the growers, we don’t have anything to sell.”
All aspects of our industry are funded by the growers, either vertically integrated or stand-alone growing operations, and growers are the basic drivers of the industry. They have adapted extremely quickly to a changing consumer demand for more variety and quality. When you look at the huge change in the varietal mix that has occurred over the last six years, with Red Delicious now about a third of the crop and nearing balance with demand, and Golden Delicious now at number five in quantity after years of ranking number two, it is nothing short of amazing.
The second thing that I believe has helped to enable our industry to market a 100-million-box crop and actually get it done before the next crop was harvested, is the worldwide emphasis on healthy eating. This, coupled with some new storage techniques that have greatly enhanced our ability to deliver a consistently great eating experience, has increased per capita consumption for the first time in years. We need to remember that the consumer must be “sold” with every bite of every apple in order to increase consumption. It definitely has increased our export sales and I believe domestic as well. The focus on eating more fruits and vegetables is present in all of our markets.
The commission was recently awarded a three-year grant ($225,000) to establish a “5 A Day” program first in Taiwan and then expand to other Southeast Asian countries. Retailers and government health agencies will partner in this effort. While in a meeting last year with a major importer in Dubai, I was surprised when he suddenly asked how he could start 5 A Day in the Middle East.
At first glance, the title “Coping without the commission” is somewhat misleading. The Washington Apple Commission still has an important role in the industry without the domestic promotion program. The commission will contribute over $4 million of federal funds together with some $1.6 million of grower funds to the overseas export marketing program this crop year. Of the 100-million-box 2005 crop, 29 million cartons were exported. In addition to that, our funding ($400,000) of the Northwest Horticultural Council’s activities to support market access as well as numerous scientific and phytosanitary issues and the $1 million funding of U.S. Apple Association’s efforts at the federal level is significant. It is the only means of equitable assessment collection to fund joint efforts left in the industry. All of these things are essential to the total marketing effort.
All of the above-mentioned topics bode well for the apple industry. However, we all need to keep several things in mind. First, “Quality is Washington’s niche.” We cannot compete as a low-cost provider. Second, in order to provide that quality, it must start at the grower level as no packer can improve poor quality fruit. In order for growers to deliver quality, they must be economically strong. Third, as marketers, if we are going to deliver quality, we need to be paid accordingly. With this in mind the commission is making a concerted effort to work closely with private marketers in the export market. At the Washington Apple Commission, the single most important question we ask ourselves is “What are we doing for the apple grower today?”