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Apple industry fends off pandemic, sees strong sales outlook for 2021

Overview of the apple season, complemented by charts from Agronometrics.

Original published in on December 31, 2020 

Fresh apple inventories appeared to be down in December, compared to a year earlier, according to the Falls Church, Va.-based U.S. Apple Association.

Fresh apple holdings on Dec. 1 totaled 102.8 million bushels, 13.1% less than inventories reported a year earlier, said Christopher Gerlach, director of industry analytics with U.S. Apple.

Processing holdings totaled 44 million bushels, 1.3% more than last year on Dec. 1. The total number of apples in storage on Dec. 1, 2020, was 146.8 million bushels, 9.2% less than last December’s total of 161.7 million bushels and 5.2% below the five-year average for that date.

In the Year of the Pandemic, the lower apple inventories were just one more headline, said Don Roper, vice president of sales and marketing for Brewster, Wash.-based Honeybear Brands and Elgin, Minn.-based Wescott Orchard & Agri Products Inc.

“2020 is one for the history books,” he said. “The world experienced a seismic shift, and everybody had to pivot, make changes and sacrifices.”

Demand remained strong, though, Roper said.

“We will wrap up 2020 with strong sales and an even stronger outlook for 2021,” he said. “Apples are an original superfood, and we will continue to lean on immunity boosting messaging and the impact food has on health.”

Washington apple volumes were down in 2020, compared to projections, and that will show up in prices, Roper said.

Volume (in KG) of apples from Washington in the US market
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

“In general, we are seeing upward price pressure on nearly all varieties due to a shorter crop,” he said.

Price (in USD) of apples in the US market
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

“Consumers are buying what they know — sales trends clearly show when consumers are getting into stores their buying behavior is very consistent.”

It was a tough year, then, for new varieties, Roper said.

“They know what they are looking for and buying the items they are most familiar with,” he said.

Sales explosion

The onset of the pandemic had an almost-immediate effect on apple orders, said Roger Aguirre, director of apples and pears with Vancouver, British Columbia-based The Oppenheimer Group.

“Domestically, when the pandemic first began, we saw a big reduction in SKUs from multiple retailers, as a reaction to a largely unknown and unpredictable environment,” he said.

“In this fluctuating climate, we also saw a number of retailers who, for instance, pulled pears, downsized their premium offerings and more, because they simply didn’t know what was going to happen.”

Things have turned for the better, though, Aguirre said.

“We’ve managed to turn this around and have since seen an increase in movement, especially with bagged apples, which have witnessed a significant uptick as consumer perception of food safety shifts in response to the pandemic,” he said.

For the winter months, Oppy already was seeing an increase in demand and requests for ads, especially on premium varieties such as Envy and Jazz apples, Aguirre said.

“On the flipside, as the number of COVID-19 cases continue to rise in certain regions, key retailers are reducing store capacity as a necessary public health measure, so we will see a reduction in sales because of this, although it is unclear to what degree.”

Marketers have had to switch from traditional in-store displays to online marketing strategies, Aguirre said.

“Understandably, in this wholly new climate we have had to change our approach to promotions,” he said.

More-traditional challenges, such as weather, also surfaced in some areas.

“Late frosts across the south-central part of Pennsylvania reduced the fruit crop before it had started,” said Ellie Hollabaugh Vranich, retail market manager and assistant business manager at Biglerville, Pa.-based Hollabaugh Bros. Inc.

“Then, hailstorms further damaged the crops. Despite it all, favorable growing and harvest conditions in the latter part of the season helped finish off the crop we had in the best way possible. The smaller overall crop size in Pennsylvania likely means supplies will begin to dwindle towards spring.”

Healthy practices

COVID-19 has affected day-to-day operations to some degree, said Brenda Briggs, vice president of sales and marketing with Gardners, Pa.-based Rice Fruit Co.

“The buzz for 2020 focused on adaptation and change, and, for Rice Fruit Co., preparation has been the key to success,” Briggs said.

“We have created an internal COVID taskforce to address critical planning issues to ensure that office employees can work remotely, the packing line is socially distanced and preventative safety measures are implemented throughout the facility.”

Rice Fruit’s post-holiday program will feature premium varieties including Kiku, Ambrosia and EverCrisp, Briggs said.

“Coupled with our current lineup of Honeycrisp, gala and fuji, we have an awesome opportunity to continue to feature Eastern apples,” she said.

At Wenatchee, Wash.-based CMI Orchards, shipments were “fast and furious” in the early stages of the pandemic, but orders normalized toward the end of 2020, said George Harter, vice president of marketing.

“We definitely had all pistons firing to keep up with retail demand, and our packing facilities were doubling and tripling up on shifts to get fruit packed up and out the door,” he said.

“We’ve had some great opportunities for movement, promotions and relationship-building as we’ve navigated the different pressures brought about by the pandemic of 2020.”

CMI added two packingshed partnerships — Yakima Fruit and Independent Warehouse — during 2020.

“These additions, plus the addition of Pine Canyon in 2019, have added about 4 million cartons of exceptional quality apples and pears to CMI’s selling power and we’re excited to be able to offer year-round supply on conventional and organic fruit,” Harter said.

Post-holiday promos

Apple sales did see times of “surge” and “snap-back” during the pandemic, said Brianna Shales, marketing director with Wenatchee, Wash.-based grower-shipper Stemilt Growers LLC.

“2020 — what a year!” she said. “We had a record crop as an industry last year, so that spike in movement was nice to have happen, and the apple market strengthened over the summer.”

The 2020-21 crop was short, but there will be ample promotional opportunities, Shales said.

“In the post-holiday and springtime, we expect many club apples to be on display, including our signature apple Piñata,” she said.

“We also have Cosmic Crisp in-season now and encourage retailers to continue planning multi-variety ads for the apple category every month.”

It was a good year for Michigan apples, said Diane Smith, executive director of the Lansing-based Michigan Apple Committee.

Volumes (in KG) of apples from Michigan in the US market
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

“The pandemic has changed buying habits throughout the grocery store, and produce is no exception,” she said.

“Pre-packaged apple sales have shown increases since March 2020 and bulk tray-pack apples have been on the decline.”

Pre-packaged apples such as pouch bag, poly bag and tote bags have been “the catalyst for growth,” Smith said.

Healthy eating will be a marketing focus at Yakima, Wash.-based Sage Fruit Co., as well, said Chuck Sinks, president of sales and marketing.

“With the new year quickly approaching, fresh produce, apples included, will be on full display for New Year’s resolutions,” he said.

“As we move past that and into the spring, there will be excellent opportunities to promote different varieties such as Pink Lady (Valentine’s Day, Mother’s Day) and granny smith (St. Patrick’s Day).”

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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