Jack Hughes, Fruition Horticulture (First seen in The Orchardist magazine)
What apple variety mix should we grow to be successful in a changing world? This article discusses some of the strategic factors involved in choosing what we produce and offer to our customers.
The money is in premium
A recent article in the World Apple Report1 describes the rise of premium food products that offer consumers extra satisfaction in exchange for a higher price. The article discusses research by the Hartman Group2 who have studied the evolution of premium products in 12 different food categories in the USA. They report that “more and more categories are being energized by celebrity chefs and food writers”.
The Hartman study showed that the premium dollar share varies amongst different food categories. For example it was low for barbeque sauce (2%), intermediate for chocolate and candy (11%) and highest for yoghurt (33%). The contribution of premium products to the growth of each category also varied. At the extremes, premium brands only accounted for 7% of the growth in barbeque sauce but they were responsible for 61% of the growth in yoghurt. Why? Hartman found that premium yoghurt brands provided 2 reasons for consumers to trade up – the strongest reason was satisfying consumers’ wants for health and wellness attributes. The next reason was that premium yoghurts offered new flavor sensations. Lessons here for the apple, perhaps.
The Honeycrisp apple has been a phenomenon in the USA as consumers have been prepared to spend up large on an apple that offers a new taste experience for them. Clever marketing and the apple’s combination of aromatic flavor, open texture and juiciness has resonated with apple consumers who were mostly raised on Red Delicious. No matter that Honeycrisp is fraught with issues for growers and packers. High prices, so far at least, have mitigated significant levels of quality related losses through the orchard to market chain.
Health and Wellness
The old adage ‘an apple a day keeps the doctor away’ embodies apples healthy reputation. An example of introducing a new variety with a “bio snack” by-line can be found in “IsaacR CIV3233” which is being promoted with the “philosophy to remain natural in all aspects”. This selection has been bred with disease (scab) resistance by the Italian CIV breeding group and is being globally commercialized by the Kiku company.
Should biotechnology enter the Garden of Eden?
Recent approval in North America of a genetically engineered (GE) or genetically modified (GM) apple that doesn’t brown after it’s bruised or sliced has intensified the debate over whether GE might tarnish the apple’s image as a traditionally healthful product.
The Arctic apple has been engineered using new techniques of manipulation of RNA molecules to silence the polyphenol oxidase enzymes responsible for browning in apple flesh after the fruit is cut. Four genes in a family of 10-11 genes have been switched off but there are concerns about affects on other properties such as pest and disease resistance and the risk of transferring vulnerability to other plants. There is public concern that these risks have not been properly assessed by the approving agencies. Introducing a GE or GM apple into the NZ apple offering appears to present a significant risk of damaging customer’s trust.
Customers have unique reasons for buying our apples and ways of determining the value of those purchases. Take the example and feedback from the Belgium lady who routinely buys NZ apples at her local supermarket. She bought bi-colour apples because her kids liked and ate them. The actual variety didn’t matter to her but simply getting healthy food into her children did. She may not have been a sophisticated consumer but getting the eating experience along with the implicit assurance of health and wellbeing was important to her.
Choice and confusion
The proliferation of varieties and brands is a feature of the apple category. Now with sports and even colour splits within existing varieties being separately identified in the market, the customer is being bombarded with a bewildering array that could be a turn-off. Barry Schwartz in his book, Paradox of Choice, explains that here comes a point where too many choices can paralyse action4.
Consumers can also be forgiven for being confused about what the idea of fresh fruit actually means as fruit is grown in different hemispheres and stored for increasingly longer periods.
The apple marketing and distribution trade does not always have the interests of the producer and customer as their top priority. When a trader’s prime incentive (and therefore preference) is to handle the consignment with the biggest margin between buy and sell price then good quality fruit may be held up in store while low quality fruit is foisted onto purchasers. NZ has suffered from this situation in the past and we want pathways to market that avoid this lose/lose situation.
Increasing ‘organised retail’ are the gatekeepers who call the shots. We need to get close to our customers and understand and deliver what they are looking for.
The Pink LadyTM franchise is probably the world leading apple brand in terms of volume and value. Components of success include a unique apple, management of quality and effective promotion. JazzTM is another successful example with its fresh taste and outstanding shelf life being key attributes.
The World Apple Report gives Honeycrisp and Pink LadyTM “Power” variety status by adapting the Power brand concept from Hartman. They envisage JazzTM and AmbrosiaTM achieving “Power” variety status if they continue to prosper.
Many models to market
Protected varieties give degrees of control and exclusivity to growers. Marketer and retailers are incentivized to offer ways to improve the experience for all participants – customers included.
Growing controlled varieties in both hemispheres is a sound concept allowing year round supply of fresher fruit. Other benefits include sharing of market development and promotion costs and expertise in production and handling. The variety TentationTM was a pioneer in this regard but flaws in the apple prevented its success. JazzTM and Pacific RoseTM were early examples of NZ bred material going global and more recently EnvyTM and KoruTM have joined the club. KanziTM is an example of a European apple being grown in NZ for counter seasonal supply there.
Internationally, a number of relatively new breeding programmes in the USA and Europe are coming on stream with new selections. At the same time, the processes for globalization are being refined and acceptance of benefits by stakeholders is being increasingly appreciated. In the near future, we may see the northern hemisphere developers of new varieties keen to allow southern hemisphere production. In turn, southern hemisphere producers may be encouraged to plant a new variety that has had some ‘road testing’ and already has the beginnings of a ‘fan base’. It’s a “watch this space” situation.
A challenge with niche varieties is how to reach customers – the internet could change all that with rapid sharing of information and influence. Electronic word of mouth may be a modern means for new varieties to achieve cult status. Who knows, on-line sales could be the next big thing.
Protecting what we’ve got
Word-cloud diagrams depict NZ’s variety mix (Figure 1) and export destinations (Figure 2). These graphics illustrate relative importance by showing higher ranked varieties and countries in larger font size and vice versa (Note that the graphic does not support the TM symbol for trademarked varieties).
On the variety front, they illustrate that Royal Gala and Braeburn are still important despite the arrival of new comers.
Equally, traditional market destinations still dominate despite recent growth in Asia. This perhaps reminds us that, despite its declining share, we should still ‘do a good job’ with Braeburn and not treat it as a second class citizen. European apple eaters with preferences for full flavoured (rich-tart) fruit represent a significant market segment worth satisfying now and in future.
And what of Royal Gala? A variety that, some (damming with faint praise) might say, meets the expectations of less discerning customers. It is now the most planted apple in the world and increasing volumes of good and indifferent quality will be coming on stream. Nevertheless, Royal Gala’s wide acceptance in most markets suggests it has a future provided we manage and improve quality.
What about the view that newer high colour sports of Royal Gala don’t taste as good as the original Gala? A Nelson based group is carrying out an interesting programme where they are re-selecting for eating quality attributes that may have been lost5.
Staying ahead of the curve
There is a lot to think about and no road-map to follow. Variety choice determines who you are doing business with, your pathway to market, even your access to new ideas and technology. Variety mix also influences the value of an orchard for lease or sale.
Royal Gala will probably be our mainstay variety for some time to come but arguably want to compliment that with a suite of power, premium and niche varieties that we can distribute to our many customers around the world. This means staying ahead of the curve (read, pack) and redeveloping into the next generation of top payers while the going is good.
Acknowledgement: Insights from Jono Wiltshire, Business Development Manager, T&G and Gary Wellwood, Business Development Manager , PickMee
1 The Challenges of Premium Apple Varieties. The World Apple Report Vol 22. No. 12. Dec 2015.
4 The Paradox of Choice-why more is less (2004) Barry Schwartz)
5 Heritage Gala selections fashionfoods.nz