October 09 WAR

October 2009, World Apple Report Highlights

World Apple Crop to Dip
The world apple crop is expected to fall about 3 percent in 2009-10 compared to the previous season. This will still be 14 percent above the average world crop at the beginning of the decade. A major factor in the decline will be an expected drop of 12 percent in China's apple crop and of 19 percent in Poland's crop. Production in North America and in Western Europe is expected to rebound, making life more difficult for Southern Hemisphere supplies in 2010. The decisions made in China on how to allocate the smaller crop to fresh domestic, fresh export or processing could shake up markets for fresh apples and apple juice in China and around the world.

New Procurement Policies Bring New Hazards
Walmart is introducing a new global procurement policy for produce and would like to use the Washington State apple industry as a test case. It appears that Walmart will drop its preferred supplier relationships and will solicit bids from a wider range of firms through some form of auction process. While suppliers are nervous about the impact on their prices, Walmart needs also to be wary of the unintended consequences of its new proposal. The apple category is more complex than most with numerous varieties, sizes, quality variants, pack types and institutional arrangements like clubs and brands. There is a danger that in their zeal for Walmart's business, the successful bidders may make promises they cannot keep while remaining solvent. Some large companies may prefer to pass up the Walmart business altogether. Walmart could find itself later in the season scrambling to keep its shelves stocked.

Indulgent Consumer, Will Ye No Come Back Again?
For the last two decades, indulgent consumers have been continually willing to try new products and buy upscale versions of existing products. Many goods and services that were once considered luxuries became necessities. In produce, consumers sought ever higher quality, new and exotic tastes, and extrinsic attributes such as organic or fair trade. However, in the current severe recession, many consumers have rolled back their ambitions. Many have become more thrifty, either by necessity or by choice. Marketers are seeking answers to two questions. One, how far will consumers roll back their wants, and two, when will consumers return to their free-spending ways? Thriftiness is likely to persist as long as consumers continue to feel the pain of falling net worth and lost jobs. This downturn could color the attitudes of consumers for many years.

Special Statistics

World Apple Production, by Region, 2005-08 and Forecast 2009 (table).
International Market Trends, Interseasonal Price Comparison (table).
Canada: Imports of Organic Apples and Other Noncitrus Fruits and Berries, 2007 and 2008 (table).
Boston and San Francisco: Wholesale Prices of Fresh Apples, Organic and Conventional,
Selected Periods, 2008 (table).
European Union: Exports to Russian Federation, January-June 2008 and 2009 (table).

The authoritative guide to the world apple business today.

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