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Home  »  Ag Sectors

Apple industry tepid on call for promotions

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Analysis


By DAN WHEAT


Capital Press


A call for world-class promotions of Washington apples makes sense, some industry leaders say, but there's no big rush to embrace it.


The call was issued about a month ago at the annual meeting of the Washington State Horticultural Association by keynote speaker and retired Washington State University agricultural economist Desmond O'Rourke.


O'Rourke, an industry analyst for 40 years with a background in advertising and marketing, told those attending that without a large, collective promotional push, per capita consumption of fresh apples will continue to decline by about 1 percent a year. He said the state will soon be producing a 120-million-box fresh crop annually and that increased supply without increased demand will cause prices to fall.


The answer, he said, lies in significantly stepped up promotions to increase domestic and foreign demand in particular. China and India are potentially good future markets with large populations and expanding middle classes, he said.


The Washington Apple Commission's generic, domestic promotions ended almost eight years ago. Since then individual companies have done their own promotions. All that does, O'Rourke said, is shift consumer purchasing from retailer to retailer. It doesn't grow overall demand.


Collective, generic promotions are needed again at home and abroad, funded by a 20-cent to 40-cent per box fee on growers instead of the current 3.5-cent fee, he said.


Promotions could be done by the apple commission or another group. There are interesting alternatives to using commodity commissions as the promotional vehicle being studied at Cornell University that include voluntary, not mandatory, assessments, O'Rourke said.


But, he said, the industry is not ready to consider collective promotions again because times are relatively rosy, and there is no crisis.


Attempts to ask a few major companies about the issue appeared to underscore that.


A spokesman for Domex Superfresh Growers in Yakima declined comment. Columbia Marketing International in Wenatchee did not respond.


West Mathison, president of Stemilt Growers Inc. of Wenatchee, had no comment on collective promotions. He said the 2010 apple crop barely makes the top 20 in volume in the nation's history and that it's difficult to increase consumption without consistently hitting record supply.


But Tom Riggan, general manager of Chelan Fresh Marketing, said he agrees with O'Rourke. The current system results in momentary surges in apple sales for a given retailer and then it ends, Riggan said.


There's a golden opportunity to push into India and China. That takes promoting Washington apples as the "Mercedes apple," which it is, Riggan said.


"It's time now to hit those markets hard in a big way," he said. "We can either do it now as an industry and ramp up those markets or wait until it's too late and the damage is done, which we tend to do."


Riggan said he supports increased assessments for such promotions because no one company is large enough to do it on its own.


Bruce Grim, executive director of the Horticultural Association and manager of apple, pear and cherry marketing associations, also said he agrees with O'Rourke.


"No one is pushing the Washington brand and we will lose brand identity," Grim said.


"The sales desks (of individual companies) are doing phenomenal jobs but no one is talking directly to the consumer and food page editors," he said.






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