November WAR 09

November 2009, World Apple Report Highlights

Can You Get There from Here?
After a rough end to the 2008-09 season, apple growers and marketers are agonizing over how to avoid the sporadic business declines they have suffered during the last decade. It will be extremely difficult to assure sustainable profitability in the apple industry because of (1) retail consolidation, (2) fragmentation among suppliers, (3) the increased divide between the controlled segment of the industry and the open market segment, and (4) the continued volatility of exchange rates. While the apple industry has improved its common infrastructure through organizations like WAPA and SHAFFE, it still lacks crucial information on stocks and flows of product that are used by major consumer products companies to manage inventory and marketing. It also lacks the organization and the will to develop a more effective distribution system.

Vietnam Very Promising
Few countries in Asia offer more potential for imports of fresh apples than Vietnam. It has a vibrant economy and a youthful, flexible population. Its economy is expected to continue to grow much faster than much of the world. It does not produce apples domestically, so it must import apples to meet growing demand. Imports in 2008 rivaled those of Taiwan. However, while the population of Taiwan is growing slowly, Vietnam will add 42 million people in its cities and towns between 2010 and 2050. Its distribution system is being rapidly modernized. Imports are currently dominated by low-cost apples from China, but demand for higher-priced apples from the U.S., and elsewhere, has also been growing. Vietnam has all the ingredients needed to become a leading market for apples and other temperate fruits.

Fresh Fruit Advertising Trends
Two complete seasons of data are now available from the USDA,AMS National Fruit and Vegetable Report on online weekly advertised features for produce items. The data covers 200 retailers and about 17,000 individual stores in the United States. The weekly average number of produce ads was about the same in 2007-08 and 2008-09, with about half the ads being for fruit and half for vegetables. Only ads for Red Delicious apples were counted in 2007-08. However, even in 2008-09, when ads for Gala apples were also counted, ads for grapes were two-thirds more than the total of ads for Red Delicious and Gala apples. Retailers were slow to adjust advertised prices for apples downward in 2008-09 when the extent of supplies became apparent. Ad support for fresh apples appeared to be deficient both in terms of the volume of apples sold, and given the need to induce strapped consumers to eat more apples.

Special Statistics

Vietnam: Imports of Fresh Apples, 1992-2008 (chart).
United States: Number of Stores with Ads (table).
United States: Weighted Average Advertised Prices ($ per lb) (table).
United States: E-Commerce and All Retail sales, seasonally adjusted (chart).
Southern Hemisphere: Average Export Prices of Fresh Apples, 2000-2007.

The authoritative guide to the world apple business today.

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