Comparison Shoppers Make for an Unlikely Apple Variety Winner
October 11, 2022 The U.S. Navy Blue Angels, in Chicago for that weekend’s air show, repeatedly announced their presence (with authority!) in the middle of the Aug. 18-19 USApple Outlook conference. In at least one case, they provided the perfect metaphor inside a trembling Ritz-Carlton.
Soaring just as conspicuously these days is the cost of food — 10.4% over the last year, according to retail analyst Tom Barnes. Invited to speak at the annual USApple event, the CEO of Category Partners spotlighted that figure early in his presentation on inflation and its effect on assortment.
“The consumer is really having a tough time out there,” Barnes said. “Their dollar is really being stretched thin.”
How is this affecting apple growers and their varieties? Barnes singled out a telling pair of unforeseen retail trends over the previous 48 weeks (Aug. 29, 2021, through July 30, 2022).
SURPRISE, SURPRISE
‘Honeycrisp’ sales — after growing 9.5% in 2019, 25.4% in 2020, and 1.4% in 2021 — declined 1% this past year. “This one blows my mind,” Barnes said. “I’ve been looking at apple numbers probably about 10 years. I think this is first time I’ve actually seen volume decline in ‘Honeycrisp’.
Two issues are in play here, Barnes said. “We know the consumer is starting to look for kind of a cheaper variety. ‘Honeycrisp’ has always been able to keep that price point up, and I hope that continues,” he said. “But I also think some other new varieties that are coming in are also pushing the ‘Honeycrisp’ to the side a little bit.”
And then there is anything-but-new ‘Red Delicious’, which increased 4.9% in retail sales this year after falling 8.1% in 2019, 5.9% in 2020, and 15% in 2021.
“Kind of like ‘Honeycrisp’ never being down, I can’t remember the last time I saw ‘Red Delicious’ actually up at retail,” Barnes said. “To see a 5% increase in volume on ‘Red Delicious’ is kind
of incredible.”
The lesson being … “You look at that comparison shopper who has a stretched wallet, and what are they doing? They are looking for a way they can save money,” Barnes said. “Does that mean we should chop down half of our orchards and start growing more ‘Red Delicious’? Absolutely not. Please do not do that. But what it does mean is that we need to start becoming a little smarter on how we’re pricing our varieties, so the consumer has a low-price option.”
OTHER CURRENT IMPLICATIONS
Barnes also told the USApple audience that:
• This year’s shorter crop in Washington state will most likely keep prices high.
• E-commerce, along with digital in-store shopping, will continue to push change in the assortment at retail.
• Branded varietal battles will intensify, fueled by ‘Cosmic Crisp’, a variety that can only be grown in Washington, “but we can’t forget about the foundation varieties.”
• The industry should be careful of “greedflation,” the idea that inflation is being aided and abetted by price-gouging from big corporations who are looking to create excessive profits.
Meanwhile, apple growers can remain optimistic, Barnes said, while realizing that apples are still the largest dollar category in fruit, and there is no real substitute for those dollars. Varietal innovation creates consumer and retailer interest. And lastly, the quality and eating experience of their fruit is better than ever, which is the best advertising of all.
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