Expect Strong Washington Apple Crop

Look for standout varieties that offer a unique selling proposition.

For commercial apple growers in Washington, who are faced with input cost increases that are squeezing profits, there is a bright spot: a strong crop and reduced shipping costs.

“Shipping costs have gone down, meaning Washington apples are competing nationally, since they can get them to the East Coast more affordably than during the COVID era when freight costs were high,” says Lynsee Gibbons, director of communications, U.S. Apple Association, Falls Church, VA.

USApple forecasted a substantial increase in Washington production for the 2023/2024 crop. The estimate called for 160 million bushels producing a value of $2 billion. For Washington, the top U.S. apple-growing state, that translated into a 9% gain over the year earlier.

The actual harvest didn’t disappoint and should total close to the estimate. The figures suggest Washington’s share of U.S. apple production should be about 64% for the crop year. Reports say the harvest won’t be quite as abundant in the 2024/2025 crop year, but it shouldn’t be too far off last year’s total.

Kaci Komstadius, vice president of marketing, Sage Fruit Co., Yakima, WA, says conditions in the company’s growing areas suggested abundance.

“This has been a record crop for Sage Fruit, and the second largest in history in the state,” she says. “Our industry is expecting another large crop in 2024 with a few differences compared to this past season. We anticipate Honeycrisp being down as an industry, but Sage Fruit should have similar volumes compared to 2023. Additionally, there will be large increases in Gala and Cosmic in 2024. We do anticipate harvest times being right in line with the 2023 crop.”

At Wenatchee, WA-based Stemilt Growers, Marketing Director Brianna Shales says the 2023/24 apple crop had good volume and excellent quality, but this year’s crop tells a different story, yielding less volume.

“This is the year to really get behind apple promotions,” says Shales. “We expect to be down slightly over the 2023/24 crop, but will still have volumes available for promotion. Look for Cosmic Crisp and SweeTango to both be up in volume over last year, with great-selling qualities to drive consumer demand.”

Shales says ongoing growth of Cosmic Crisp is drawing more consumer demand.

“It’s growing in volume and popularity and is turning more into a year-round apple than a club apple. Some of the best flavors of Cosmic Crisp come out in the summer months after being in cold storage. The longer the apple is in the cold room, the more starches turn into sweet sugars.”

Shales says Stemilt is also growing its share of organic Cosmic Crisp. “There is a lot of competition in the club apple world and limited shelf space, so that is an area that is going to be in flux and changing as we go forward.”

Indeed, Cosmic Crisp apples, with cultivation in Washington, are among those that are gaining ground, literally, up from a just evident blip in the market during the 2018/2019 crop year to approaching 10 million bushels in crop year 2023/2024. Evidence suggests that Envy apples are gaining as well.

In his assessment, Oppy Director of Apples and Pears Roger Aguirre says the company is expecting the Washington apple crop to come in smaller compared to last year due to freeze events in the northern regions.

“However, the fruit size is anticipated to be larger, and the overall quality should be excellent. We’re excited to be bringing our dynamite apple varieties, Envy and JAZZ, to market this season,” he says.

In Washington, H-2A wages and associated costs have risen to the degree that job growth and even the competitiveness of the growing has been affected, says Catherine Gipe-Stewart, director of marketing, Superfresh Growers, Yakima, WA.

“In Washington State, we continue to struggle with unsustainable wage hikes. The Washington State Adverse Effect Wage Rate has surged from $17.97 to a minimum of $19.25, making it the second highest in the U.S. after California,” she explains. “In actuality, if the housing benefit for our H-2A workers is factored in, then the real wage comes to $24/hr. This sharp increase poses challenges in aligning with our operational and labor costs.”

Komstadius says Sage is doing what it can to mitigate rising costs.

“Labor costs have increased significantly over the last several years, as have many other costs of doing business. As we battle the higher costs of materials and production, we are always looking for ways to become more efficient, and with that comes investments in the latest technology,” she says.

Honeybear Brands is headquartered in Elgin, MN, but has a significant presence in Washington. The crop in the last growing season was large, as noted, and Honeybear had seen a high production volume.

“There were quite a few varieties that were probably at all-time highs,” says Don Roper, vice president, Honeybear Marketing. “We had our biggest crop on record this year in Washington. We’ll have a fair amount of carryover.”

SHIFT IN VARIETY RACE

Oppy, headquartered in Coquitlam, British Columbia, with sales offices in Seattle among other cities, sees the apple sector shifting somewhat, with the race to develop new varieties giving way in some degree to economic realities.

“The apple industry has seen shifts in varieties alongside consolidation,” Aguirre says. “Investing in new apple varieties is a lengthy process, taking around five years from planting to harvesting. Due to rising costs and financial pressures, many growers lack the capital to invest in new crops, slowing down the introduction of new varieties. The industry seems to be focused on adapting to economic challenges opposed to looking for new opportunities.”

Stemilt’s Shales says it’s important to think long term and continue to boost the apple category in general to build business.

“Inflation has impacted all areas of the supply chain and it’s certainly affecting apples as we face a supply-exceeds-demand situation. It’s a cyclical business and has occurred for the industry before,” she says. “It’s important that we keep working with retailers to grow demand for apples and help drive repeat purchases and consumer satisfaction.”

Retailers are looking to more closely tailor assortment to demand. “The apple industry is currently undergoing SKU rationalization, with a focus on the most successful varieties,” says Aguirre. “The market is saturated with apples. Retailers are looking for standout varieties that offer a unique selling proposition. Envy is one of the few varieties that has grown in both volume and dollar sales at retail in recent seasons.”

Consumers continue to juggle favorite varieties while trying less familiar apples, especially in the harvest season, which can generate additional apple enthusiasm.

“At Stemilt, we evaluate apples by variety every year to determine which should go in the ground and which need replacing or removal,” says Shales. “This ongoing process helps ensure that we are growing the varieties that consumers want to buy. We’ve increased our share of Cosmic Crisp, organics, SweeTango and have good volumes of core varieties like Honeycrisp, Fuji, Gala and Pink Lady. We focus on growing high color and quality strains to improve the consumer experience.”

Gipe-Stewart, director of marketing, Superfresh Growers, Yakima, WA, says Washington growers are tracking consumer trends and responding as tastes change.

“Every year we replant mature orchards to replace with higher density orchards, continuing to refresh and renew our selection,” she says. “Varieties that are often pulled out include Red Delicious and Golden Delicious, as well as lower color mature varieties like Gala and Fuji. New varieties that go in are often high color and high flavor varieties like Cosmic Crisp and high-color Honeycrisp.”

Roper, of Honeybear Marketing, says it’s important to work with retailers to sort through the varieties available and throw a spotlight on apples at their best at a given time, so, in effect, maximize the apple calendar.

“There has been such an explosion of varieties,” he says. “Retailers aren’t sure what varieties are the right fit at the right time for customers. If they don’t have really good experience in the apple industry, how can we help them better understand when is the right time to be bringing a variety in. There is a certain time of year when Pink Ladies taste absolutely fantastic. Other times of the year, they’re just OK. So, how do you help retail partners maximize their deck?”

SIZING UP APPLES

Size is a critical concern among retailers today, Sage’s Komstadius says.

“The majority of domestic retail carries a large PLU, 88 count and larger, and, within their mix, will usually give a three to four size range to ship,” she says. “Certain varieties that tend to grow larger, they may handle extra-large sizes like 56/64. In certain markets, smaller PLU, 100 count and smaller, perform well and some retailers will carry three to four varieties of smaller apples. At times, these are sold by the each, and others they are sold by the pound.”

Komstadius says that an evolution in demand continues as the apple sector works to align with demand.

“This will be the first season that more pounds of Honeycrisp are consumed than Gala,” she says. “We’ve seen consumers gravitate toward high flavor varieties like Honeycrisp, as well as Cosmic Crisp, SugarBee and Envy.”

Although a lot of research has been going into new varieties, Aguirre says the breeding community has really only been successful with producing new bi-color red apples, creating a sea of similar-looking items.

As a result, he says, a “focus on full color, size and new packaging options is really key here.”

• • •

Marketing Considerations for Retail

When it comes to merchandising, Kaci Komstadius, vice president of marketing, Sage Fruit Co., Yakima, WA, says “Creating impactful apple displays at retail is crucial for driving sales and enhancing the overall shopping experience.”

Key considerations include offering a diverse selection of apple varieties to satisfy consumers with different tastes, using color breaks to separate varieties visually, and potentially adding newer “club” varieties that entice consumers to try something different, she says. In terms of presentation, apples should be front-and-center in a prominent produce department location sure to attract attention.

Merchandising should include both bagged and bulk items as loose fruit still attracts shoppers determined to select their own pieces while packaged apples appeal to convenience-seeking customers. Cider and seasonal elements should appear alongside apples to maximize sales and create a thematic showcase for the new crop season.

At the same time, color breaks to separate varieties visually for consumers remain productive, Komstadius says, while the use of baskets or pre-filled tote bags can lead to impulse purchases of bulk items.

“Effective merchandising not only drives sales but also educates consumers about different apple varieties. By creating visually appealing displays and emphasizing variety, retailers can enhance the overall shopping experience and boost apple sales,” she says.

Roger Aguirre, director of apples and pears at Oppy, Coquitlam, British Columbia, says it’s important for retailers to maintain a solid apple presence even when the fruit is not the seasonal star. “Retailers tend to reduce their apple variety sets in the summer, focusing on the best-performing varieties, to make room for seasonal fruits,” he says. “It’s important for retailers to carry a mix of bulk and packaged apples to cater to different consumer preferences.”

Although cherries are a big warm weather deal from the Pacific Northwest, says Brianna Shales, marketing director, Stemilt Growers, Wenatchee, WA, retailers should continue to push apples not only to build off the volume available in the market, but also to set the stage for the key fall sales period.

“It’s important, even though summer produce is in, to keep plenty of shelf space for apples,” she says. “Promotions on core varieties like Honeycrisp, Fuji, Pink Lady and Granny Smith will keep the category moving. In peak fall apple season, it’s key to have broad table space for apples in a prominent location. With the array of varieties available today and consumer recognition of them low, we have a big opportunity to educate shoppers about new varieties, ways to use apples and through exciting displays that encourage them to put apples in their cart.  Packaging is beneficial in growing apple sales because it delivers on the convenience that consumers are after and helps grow purchase size.”

Komstadius says retailers can benefit from offering a diverse selection of apple varieties even though there is a practical limit as to how many kinds they can manage effectively. In the Sage experience, retailers typically carry around 10 varieties, along with an organic mix of four to eight bulk and bagged items. Although such guidelines can be helpful, editing to conditions is important so as not to overwhelm shoppers. Response to consumer preference should determine how many varieties and what kind need to be in front of consumers at any given time.

“The key lies in striking a balance between variety, consumer demand, and practicality,” says Konstadius. “By curating a thoughtful selection, retailers can delight customers while optimizing sales and relationships with growers and suppliers.”

In general, displays should catch the attention of any consumer entering the produce department, she said, and Sage can help with numerous point-of-sale bins and marketing materials that can form the basis of displays.

Customers’ purchasing habits have driven change at retail, says Catherine Gipe-Stewart, director of marketing, Superfresh Growers, Yakima, WA,

“The core set at large national retailers now includes Cosmic Crisp,” she says. “The core can shift pending the retailer but is generally Honeycrisp, Gala, Granny Smith, Fuji, Red Delicious, Pink Lady, and Cosmic Crisp. This is also the top seven, in order of apples by dollar in the U.S. Some retailers have taken out Red Delicious completely, or moved them to a ‘mature status,’ displaying only in markets where a mature apple does well. These top seven core varieties represent 83% of apple dollars and volume and are the literal core of the apple department.”

• • •

Digital Backs up Merchandising

Retailers can benefit from backing up their merchandising with not only circular promotion but also through the selective use of other media channels available.

Retailers can engage consumers and provide information across methods and can start with indoor signage and proceed through digital promotions that support merchandising.

“Retail displays must appeal to the consumer whether it catches their eye by its color and size, or by the presentation of new varieties and flavor profiles being offered,” says Kaci Komstadius, vice president of marketing, Sage Fruit Co., Yakima, WA. “High-graphic, clean packaging can help in catching the consumer’s attention as well. Sage Fruit is committed to providing the highest quality product and service to our customers, and we pride ourselves on being at the forefront of technology and innovation. Our regional marketing and business development team are available to build and create tailored programs that best meet our retailer partners’ needs and drive sales in their produce department.”

For his part, Roger Aguirre, director of apples and pears at Oppy, Coquitlam, British Columbia, says that considering all available options in advertising can create opportunity today.

“Traditional marketing methods like circulars still play a role, but digital channels have become more prominent from e-commerce, apps, social media, email marketing, SEM and SEO, content and influencer marketing and more,” he says. “Envy has seen great success with its influencer campaign, partnering with actor and Hallmark Channel star Andrew Walker. Influencer partners provide an authentic and credible endorsement that traditional advertising often lacks, providing good returns.”

Komstadius says electronic marketing is a primary vehicle in consumer outreach these days, whether email campaigns, social media, retail specific apps or some combination. Yet, engaging consumers shouldn’t stop there.

“The omnichannel shopping experience has allowed consumers more access to information around the products they are purchasing. We’ve also found, though, that while plenty of targeted marketing campaigns are effective, getting the product into the consumers hands and mouths still plays a large role in securing repeat purchases,” she says.

Retailers can leverage the use of modern electronic marketing channels relatively easily and inexpensively, which can help boost consumption of a commodity like apples by making the case that it’s fun to go beyond the shopping list and check out what might be on display in-store.

“It’s important to use every channel we can to educate consumers about the different apple varieties and promotions going on in-store,” says Brianna Shales, marketing director, Stemilt Growers, Wenatchee, WA. “People capture information in so many ways today and digital information is a great way to help meet them where they are with a key message you want to get across to them. Keep it fun and interesting, and help provide shoppers with convenience and easy ideas that they are after.”

• • •

Packaging Preferences for Apples

Packaged apples became more popular with consumers in the pandemic because of hygiene concerns and because grabbing a bag took less time shoulder to shoulder with other potentially ill shoppers going through bulk displays, and they remain critical now.

Brianna Shales, marketing director, Stemilt Growers, Wenatchee, WA, says mixing bulk and packaged apples is part of creating displays generous enough to make consumers pause and to satisfy their desire to check out what’s new and novel, especially in season.

“Consider carrying multiple varieties and packaging options in your apple displays to offer something for different consumer preferences,” she says. “One packaging vehicle we have seen perform well over the last year is a 3-pound apple bag. Of 43% of apples sold in bags, 74% of those were the 3-pound size. The alternative to a 3-pound bag is a 2-pound. That keeps the retail price lower, but drives in less volume. In years with big apple crops, having volume bag offerings is a great way to grow volume and dollar sales.”

Retailers who do a value program can focus on bags, Don Roper, vice president, Honeybear Marketing, says, “to hit certain price points.”

Recognizing who the customers are and what their preferences and priorities might be is central to apple presentation, including what space is necessary to get the best results. A mix of sweet and tart flavors, soft or firm mouth feel, and juiciness of varying degrees are all part of the equation that helps satisfy the range of consumers who buy apples.

“We have to work with a lot harder with our retail customers and then their customers to really explain what’s available on the deck,” says Roper. “In the past, if it was five varieties, it was pretty easy. Now it moves so much more quickly that there is a lot more consumer education.”

Apple season is back-to-school season. So, it’s not surprising that Shales adds, “Lil Snappers kid-size fruit is another apple option that’s designed to appeal to parents and their children looking for a smaller piece of fruit, with the same great taste. One of the biggest benefits of Lil Snappers bags is its ability to self-merchandise with colorful packaging that’s easy to grab and go.”

The preference for packaging remains among many consumers.

“Bulk apples will always have a place on the shelf, which is how we pack a majority of our product: 40-pound, tray pack boxes,” says Komstadius. “Consumers like to be able to have control over the number of apples or the number of pounds they are purchasing. However, when it comes to bags, we have seen a considerable increase in demand for retail-specific, private-label designs and brands that consumers know and love.”

The right mix of bulk to bagged changes by market and must be addressed. “It is important to meet the consumers’ needs within each market,” says Kaci Komstadius, vice president of marketing, Sage Fruit Co., Yakima, WA. “Bulk apples still outsell packaged on the conventional side, but for the organic category, bags outsell bulk. We focus on meeting with our customers to analyze their category and then try to make assortment recommendations based on market. Focusing on newer varieties bags can certainly help tell the story and provide an additional means of communication to consumers that bulk apples aren’t able to do as effectively.”

In terms of general trends, Shales says, bagged apples have become more of a consumer go to.

“It’s a good idea to keep your apple mix fresh and offer multiple flavor options during the summer season,” she says. “Bringing in a club apple or seasonal apple like Rave can be a good way to encourage consumers to try something new. Another way to keep the category fresh is by substituting a variety for its organic counterpart for a period of time. The key in assortment is setting it to your regional or customer tastes and running multi-variety promotions to keep the apple category fresh and profitable.”

Even if COVID-19 isn’t considered as much of a threat today, Roger Aguirre, director of apples and pears at Oppy, Coquitlam, British Columbia, says packaged apples still have their adherents and, so, remain relevant.

“Both bulk and packaged apples are important, but there’s been a notable increase in the popularity of bagged apples due to their typically small size, which are perfect for kid snacks or high-fiber/low-calorie eating plans,” he says. “Consumers seek value, and bags often provide this. It’s crucial to have options for both large and small apples, accommodating different consumer needs. New varieties should be included in both forms to attract customers.”

• • •

Opportunity in Organic Apples

Organics are an important segment in the apple business, and retailers should continue to plan how they address demand for them for the full year, as well as during apple season.

“Organic volume has increased year over year for Washington state, and organic apple sales are up 16% year over year,” says Brianna Shales, marketing director, Stemilt Growers, Wenatchee, WA. “Retailers are getting behind organic promotions again following a year when there wasn’t that promotion opportunity. There’s lots of opportunity to call out organics to consumers this year, and providing plenty of shelf space is a great way to do it.”

Shales recommends stocking shelves with bi-colored, red, green and yellow apples.  

She points out that Stemilt’s Artisan Organics EZ Band package is a “great way to call out apples as organic and serves as a self-merchandising vehicle for bulk organic apples. The EZ Band package is also made from paper board and can be recycled in at-home containers for consumers who value sustainability and the environment.”

Kaci Komstadius, vice president of marketing, Sage Fruit Co., Yakima, WA, says organics are a part of the apple sector that retailers should examine carefully.

“Organic demand remains high and should continue to do so,” she says.

Roughly 52% of organic consumers are Millennials, and they account for 30% of the U.S. population. The majority of Millennials who are purchasing organic items are also parents. Both sales dollars and sales volume have increased on organic apples this season. “

Still, Roger Aguirre, director of apples and pears at Oppy, Coquitlam, British Columbia, says organic apples are having a relatively tough time in the current economic environment.

“The market for organic apples is facing challenges,” he says. “While there is still demand, the premium pricing that organic apples once commanded has decreased, partly due to inflation. Retailers are making decisions based on current economic conditions, which affects how organic apples are merchandised. Clear differentiation and effective use of displays can help but must be balanced with price considerations. Organic SKU availability has always been limited due to the existing demand. This means that not every variety will be merchandised, although available in organic. While this may make the consumer choice less difficult, they may not always be able to buy the best variety.”

At Sage, says Komstadius, Honeycrisp leads organic demand.

“But Organic Gala and Fuji don’t fall too far behind,” she says. “Organic Honeycrisp is a high-end consumer favorite, which has an excellent ring at the register. On the opposite side of that though, Organic Gala and Fuji are an excellent option for the everyday, organic consumer because they are more price-friendly. This season, there are excellent promotional opportunities on all organic apple varieties.”