There are 27 different varieties in a typical store
By DAN WHEAT
Apples have increasingly become the most complicated sales item in the produce sections of grocery stores, said a man who tracks fresh food retail performance and consumer trends for retailers and grower-shippers.
That means shipper-marketers have to be more skilled in matching items to markets than ever before, said Steve Lutz, executive vice president of the Perishables Group in Chicago.
"In today's economy where consumers are looking for the best buys, you don't want to be pushing $2 per pound Honeycrisp apples into a low-income market," Lutz said.
Packaged salads used to be the most complex category in produce departments but now, when the crop is harvested, there's an average of 27 different apple items in the typical store, compared with 17 for potatoes and 13 for tomatoes, Lutz said.
Some 20 years ago, 98 percent of apples in the store were Red and Golden Delicious and Granny Smith, and few or no size and packaging options were available, said Lutz, a former president of the Washington Apple Commission in Wenatchee, Wash.
With so many choices now it's easy for the retailer to get it wrong, Lutz said. The retail produce manager has onions, cucumbers and all sorts of produce to think about, not just apples. So it's increasingly important for the shipper-marketer to know the retailer and the consumer demographics to get the right fit for the right market, he said.
With the bulk of apple harvest in September and October, the key sales period is from September through April.
Sales missed from September through December are never made up, Lutz said.
In 2008 with a record 108.3-million-box fresh apple crop, marketers had prices too high, sales lagged, prices dropped and by the summer of 2009 the 2008 crop was being sold at a loss just to move it, he said.
"In the spring and summer of 2008, there had been high input costs, fuel and fertilizer. The industry misread the size of the crop and the pricing power they had. They figured people would pay high prices even though we were in a recession and no one knew the depth of the recession," Lutz said.
The apple industry had a better season with the 2009 crop, better matching prices at the start and actually was able to slowly increase prices as the sales season progressed, he said.
Despite the recession, luxury spending is returning because unemployment for those earning more than $150,000 a year is 3 percent while it's 31 percent for those in the bottom 10 percent of earning power, Lutz said. That means marketers must be price-sensitive at the low end and expect buyers to look for substitute commodities, he said.