How can the Washington apple industry expand markets to absorb increasing production?
It’s simple, according to Dr. Roland Fumasi, assistant vice president and senior analyst for Rabo Bank North America.
Deliver exactly what consumers want: perfection.
“The world expects perfection,” Fumasi told producers at the Washington State Horticultural Association’s annual meeting in December.
Consumers expect growers to provide the safest, most consistent, highest quality fresh fruit year round. And they expect them to do that with the upmost transparency.
“And by the way, it still has to be good value,” Fumasi added. “It can’t cost too much. And, all the while, you’re expected to leave a much lighter impact on the environment than you ever have before.”
Producers have to do all this while facing tougher production challenges, such as the increasing cost and limited supply of labor, limited rail service, tight trucking supplies, or delays in shipping from West Coast ports.
But if there’s a group of growers, packers, and marketers who can pull this off, it’s the Washington apple industry, he said.
Over the past decade, Washington’s fresh fruit exports have tripled, and Fumasi expects exports to continue to grow.
The world’s population is forecast to increase by two billion—a 30 percent increase—by 2050.
In developing countries, particularly in Asia, the population will migrate to urban areas and incomes will increase.
People will no longer need to worry about finding the cheapest carbohydrate sources they can get their hands on, he said. This will present great opportunities for fresh fruit producers, who can expect exports to those markets to continue to grow.
However, it will be important to try to stimulate domestic consumption also. Export markets are very fickle and can be open one day and closed the next.
The government of Mexico, Washington’s largest apple export market, is conducting an antidumping investigation involving U.S. apples following a petition submitted by Mexican growers. In Canada, Washington’s second largest market, a trade dispute over meat labeling could lead to retaliatory measures against U.S. fruit.
“I’ve heard people over the years throw out the idea that as we increase production in Washington, our only hope is to continue to expand export markets,” Fumasi said. “But we have to consider that two-thirds of the fruit you produce stays at home. It’s a scary proposition not to fight to increase domestic consumption of fruit.”
Taste is the right of entry to the domestic market, Fumsi said. “It doesn’t matter how convenient the product is or how healthy the product is, today’s consumers expect it to taste good. And I think we would be hard pressed to find a consumer that would not agree that the product you have today tastes better than it ever has before.”
But there’s been a shift toward consumers wanting dishes with more exotic flavors. Fumasi urged producers to think about apples as a fresh ingredient and how they can be used in new ways to create dishes that are exciting and different.
However, convenience is critical, too. There are more women in the work force who have children at home, he said.
Many consumers decide what they want to eat, shop for it, and prepare the meal within the space of one hour.
“This is a growing phenomenon,” Fumasi said. “This whole idea of going to the store once a week and stocking up, and planning meals, is declining.”
Despite increasing education about the importance of healthy eating, the average U.S. consumer is only eating 40 percent of the recommended daily consumption of fruit. But that leaves plenty of scope to increase consumption.
Super foods are hot. Every green health drink has two essential ingredients: kale and fresh apples. Not only are apples healthy, but they add sweetness and tartness and offer good value in term of price per unit of mass, Fumasi said. “They have great flavor, nutrition, and value.”
He recommended that apple producers team up with producers of other fruits and vegetables to do cross marketing in an effort to increase consumption.
The millennial generation—people aged from their teens to upper 30s— is the largest U.S. generation and has a major influence on the food industry in general, he reported.
Millennials don’t necessarily have the economic means to act on their desires, but that’s changing as they get older and become more successful. By 2017, the millennial generation is expected to outspend the baby boomers, and by 2025 Millennials will make up 75 percent of the workforce.
“So they’re a growing economic power in this country,” Fumasi said. “And they’re the ones that will pull the red flag on us if we can’t deliver the whole package: high quality, decent price, and grown sustainably. That’s what they expect. That’s what they demand.”
Organic is no longer a niche market, Fumasi said. Seventy percent of U.S. consumers buy organic sometimes and 20 percent buy only organic. A mere 10 percent of consumers have the attitude that they’d rather not pay more for something they can just wash.
The local trend is more challenging for Washington, which is the country’s largest apple supplier and ships to every state. But Fumasi said engagement with consumers is more important than whether the product came from more than 400 miles away.
Millennials want transparency, which means information. They are by far the heaviest users of mobile technology.
Fifty-four percent of the U.S. population today use social media to discover new food items and share that experience with others. Almost 80 percent use the internet to shop or learn about food.
“In the past, transparency has been heavily driven by food safety,” Fumasi said. “Everybody’s watching us all the time, which adds costs and increases management.”
But transparency is also a huge positive factor because it is not a one-way mirror, he added. “We have more information about what consumers need and want than we’ve ever had before.
“We know exactly what the consumer wants,” Fumasi concluded. “They want 100 percent perfection all of the time in every way that you can deliver it.
“Now, it’s our turn to deliver and we have to do it in a way that’s sustainable and profitable for our industry. Because we have so much information about the consumer, we have a road map for what changes we need to make.
“What you need to do now is identify the strengths you have and leverage them into these new U.S. purchasing decisions and continue to innovate in the areas you know they want.” •
Code links grower and consumer
Consumers today are heavy users of digital technology and use it to find out more about the food they eat.
Dr. Roland Fumasi, assistant vice president and senior analyst for Rabo Bank North America, says one of the biggest marketing opportunities is for growers to use digital technology to reach out and tell their story.
“Consumers want to know the story right from the orchard. They want to know who grew it and how it was grown, packed, shipped, transported, and ended up in the place they’re going to buy it. That’s an opportunity with the current use of technology today.”
Dutch biodynamic apple grower Louis Ruissen recently began packing his fruit in personalized shipping cartons supplied by his distributing company Eosta, which operates a “trace and sell” program called Nature & More. By entering his code (621) at www.natureandmore.com, consumers can learn all about Ruissen and his orchard.
“Trees and growers are not objects or factors of production but living organisms,” Ruissen said in a press release. “In the stores, our fruit is usually completely anonymous. That’s why I’m happy that people can now see clearly that I’m the grower of the apples. That makes me proud.”