OPN Connect Newsletter 344 · November 2, 2023

Organic Apple Crop Offering Great Promotional Options

Next week, the Washington State Tree Fruit Association will release its latest update revealing how the packout is developing on this year’s crop and how close it is to the pre-picking estimate. While there will be some adjustments to an earlier forecast of a 66 percent volume increase on organic apple production from the country’s number one source of supply, there is no doubt that this year will be the largest organic apple crop ever.

OPN Connect asked some of Washington’s leading organic apple marketers to comment on this year’s crop and discuss some of the strategies that can be employed to help move the predicted crop of more than 21 million cartons, which represents about 19 percent of Washington's total apple volume.

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While the overall increase in Washington’s 2023/24 organic apple crop is very significant, CMI Orchards’ increase goes well beyond that because of its own increased production as well as its recent partnership with Starr Ranch.

Joel Hewitt, CMI’s organic sales manager, said the company’s organic apple volume is expected to be double what it was a year ago. He noted that the increased volume cuts across all organic varieties with the possible exception of Pink Lady.

Joel Hewitt, Organic Sales Manager, CMI Orchards

Vitalis April 2024

The increase in supplies, Hewitt said, will create some downward pressure on pricing at both the shipper level and in-store. “We expect there will be lower [FOB] price points, and we do expect this to be reflected at retail,” he said.

Much of the increased volume will be consumed by having a longer marketing season. In past years, Hewitt said many organic varieties have not had sufficient volume to be marketed on a 12-month basis. That will change this year as Hewitt expects retailers to devote more shelf space to apple sales as both the organic and conventional categories will have promotable volume throughout the year.

CMI Vice President of Marketing Rochelle Bohm said the grower-shipper urges retailers to use a tiered merchandising system in an effort to capture incremental sales. The system uses multiple in-store marketing strategies such as merchandising conventional and organic apples together as well as separately and using prominent display space such as end caps. Retailers can also create displays of the typically higher-priced proprietary varieties.

Rochelle Bohm, Vice President of Marketing, CMI Orchards

“This tiered merchandising strategy gives the consumer the option to trade up to help increase sales,” Bohm said, noting the side-by-side displays of conventional and organic apples can subtly encourage the adventurous shopper to splurge a bit.

Bohm singled out organic Envy as one variety that has a great opportunity this year. “We will have six times the volume of organic Envy as we had last year,” she said, revealing that Envy is the number one varietal choice of consumers.

Homegrown Organic Farms April 2024

The increased volume will allow CMI to initiate more promotional programs with its retail partners. Hewitt said this year’s increased volume should offer a boost to the organic apple category beyond its normal year-over-year growth as the lower price point should pull in new shoppers. Bohm added that in today’s economic climate, a lower price point is a draw for virtually any produce item.

“We will have six times the volume of organic Envy as we had last year,” Bhom said, revealing that Envy is the number one varietal choice of consumers.

With its recent partnership with Starr Ranch/Oneonta group, CMI Orchards is the largest shipper in the managed variety category, Bohm said.

Kaci Komstadius, vice president of marketing for Sage Fruit Company, said that while the actual size of the crop won’t be finalized until the December 1 storage report is released next month, she did agree that there will be plenty of marketing opportunities nonetheless. “With a larger-sized crop, lower pricing and more opportunities for promotions will be available throughout the entire season,” she said.

Kaci Komstadius, Vice President of Marketing, Sage Fruit Company

Komstadius revealed one marketing strategy that Sage Fruit will employ. “We plan to offer both organic and conventional ads at the same time,” she said. “We would like for our retailers to push both options in a single ad so that it hits both consumers. We will offer ads weekly to help make this happen.”

While Sage Fruit expects all varieties to see an increase in organic production this year, it is forecasting significant increases in volume on Honeycrisp, Granny, Fuji, and Cosmic Crisp.

Creekside Organics April 2024

Speaking of the organic option, Komstadius observed that most of the more successful merchandisers seem to have an organic destination in the stores. “It seems to call out the organic better,” she said. “However, having both items on ad throughout the department also helps move the needle. This combined with our organic bins really helps call out the organic product.”

Brianna Shales, marketing director for Stemilt Growers, revealed that most varieties are coming in at or over the pre-season estimate. “A bigger organic crop will definitely come to fruition for us this season,” she said, reminding that the 2022/23 crop was one of the smallest apple crops in many years in Washington state. “The increase from last year is significant, but last year was also a short crop.”

Brianna Shales, Marketing Director, Stemilt Growers

And last year’s tight crop did not offer a lot of opportunity for promotion. “This year, we’ll be working with retailers to bring multi-variety promotions every month and encouraging strategy for organics like carrying Lil Snappers for parents and kids, Stemilt’s new EZ Band for bulk apples, and 5-pound bags to present value to consumers when they’re looking for grab and go value option," Shales said.

Lil Snappers are Stemilt’s kid-size apples and pears. They come in a grab-and-go bag with bright, fun branding. “Another option for selling organic apples is Stemilt’s EZ Band,” Shales said. “The EZ Band is a sustainable four pack of apples made from 100 percent paperboard including a tension band holding it all together. Its design makes it easy for retailers to stock, easy for consumers to shop, and easy to ring at the register.”

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The EZ Band was designed to help assure that bulk organic apples are rung up correctly at retail, especially at the self-checkout registers.

Like the other grower-shippers interviewed, the Stemilt marketing executive expects the increased volume to cut across all varieties. “All varieties are trending up over last year, and we’ve strategically grown our organic share of Cosmic Crisp, SweeTango, and Honeycrisp,” she said.

“This year, we’ll be working with retailers to bring multi-variety promotions every month and encouraging strategy for organics like carrying Lil Snappers for parents and kids, Stemilt’s new EZ Band for bulk apples, and 5-pound bags to present value to consumers when they’re looking for grab and go value option." - Brianna Shales

Shales noted that one of the proven ways to grow organic apple sales at retail is to promote them regularly, with multiple varieties at a time. “Another thing [retailers] can do is ensure good placement. This is the year you want to see big organic displays to drive promotions. We’d encourage retailers to try moving their organic display to different parts of the store for a limited time to encourage sales.”

Catherine Gipe-Stewart, director of marketing for Superfresh Growers, pointed out that this year’s large crop will help apples regain their leading position in the produce department. “After experiencing the recent record-low apple crop, we are enthusiastic about this year's increased volume,” she said. “Apples are a cornerstone of produce, known for their volume-driven demand, and this year, we have the opportunity to reciprocate that demand. Our focus for this year will be on strategic placement and competitive promotional pricing.”

Catherine Gipe-Stewart, Director of Marketing, Superfresh Growers

This will be a good year for retailers to run lots of apple volume through their registers, Gipe-Stewart said, driving both dollars and units. 

“This is a great year for retailers to return to the time-tested ‘5-Ps’ strategy for moving apples,” Gipe-Stewart said, articulating that strategy. “Product: flavor and quality are the best we’ve seen, and high flavor varieties have taken control of the category. Price: use promotional pricing to drive volume and dollars. Placement: virtually every variety of apple will be available until next year’s crop, providing an opportunity for record retail sales. Promotion: put apples on ad every week or set long-term everyday low-price programs. Dedicate lots of shelf space to them. People: educate and incentivize your people to sample and talk about this year’s delicious organic apples.” 

All of the marketing companies expressed the desire to sell all of their organic apples labeled as such, but Sage Fruit’s Komstadius did offer the caveat that the market will dictate the reality of that.

“This will strictly depend on how sales proceed throughout the year,” she said. “Our first goal is to sell apples grown organically as organic, but our goal is to return the most money to the grower, so that will be a day-to-day decision on what’s best for our retailers and growers.”

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