Title: Value Added Apple Products: A Marketing Study
1Value Added Apple Products A Marketing Study
- Agribusiness Economic Outlook Conference
- December 14, 1999
Modified by Georgia Agriculture Education
Curriculum Office June, 2002
2Overview
- Background
- Inter-departmental Research Project
- Marketing and Economic Analysis Research Plan
- Processor Survey Results
3US Per Capita Apple Consumption 3-Year Averages
-- 1978-1998
4US Per Capita Processed Apple Product
Consumption 3-Year Averages -- 1978-1998
5Changes in US Consumption 1978-1998
- Fresh Apples 9.4
- Processed Apples 60.8
- Juice 109.7
- Canned -3.9
- Dried 11.7
- Frozen 52.0
6US Per Capita Consumption Canned Apples and Fruit
7US Per Capita Consumption Apple and Fruit Juice
8US Per Capita Consumption Frozen Apples and Fruit
9US Per Capita Consumption Dried Apples and Fruit
10Apple Prices, 3-Year Averages 1977-1997
11Processing Apple Prices, 3-Year Averages
1977-1997
12Prices Changes 1977-1997
- Fresh 55.4
- Processing 30.1
- Canned 39.7
- Juice 17.0
- Frozen 49.2
- Dried 12.1
13Inflation Adjusted Price Changes 1977-1997
- Fresh -34.7
- Processed -45.4
- Canned -41.3
- Juice -48.6
- Frozen -37.3
- Dried -52.9
14US Apple Production (5-Year Rolling Averages)
15Apple Production US, China, World
16Processing Apple Production
17Apple Utilization US and NY, 1997
18Marketing Challenges
- Raw product supply
- Mature markets for finished products
- Environmental concerns
- International competition
- Consolidation
- Profitability
- Labor
19MARKET SHARES FOR U.S. GROCERY CHAINS
20TOP 10 GROCERY DEALS IN 1998
21TOP GROCERY DEALS IN 1999
22EVIDENCE OF CONSOLIDATIONWHOLESALERS
Sources 1 Private Label, March/April
1999 2 Food Distributors International
23(No Transcript)
24Development of an Environmentally Sound, More
Profitable System for Production and Marketing of
Value Added Processing Apple Products in the
Northeastern United States
- Project Goals
- Develop a more environmentally sound,
cost-effective apple production and pest
management system - Stimulate growth of apple processing industry
with new technologies that support commercial
production of diversified, high value apple
products - Assess economic impacts, marketing potential, and
consumer reactions to new products
25Project Participants
- Entomology
- Harvey Reissig
- Art Agnello
- Plant Pathology
- Wayne Wilcox
- Horticulture
- Terence Robinson
- Steve Hoying
- Food Science
- Cy Lee
- John Roberts
- Agricultural Economics
- Brian Henehan
- Jerry White
- Kristin Rowles
26Marketing Economic Analysis Objectives
- Economic analysis
- New production systems
- Marketing analysis
- Marketing opportunities
- Consumer acceptance of new products
27Economic Questions
- What are the costs of the new production systems?
- Are the new production systems economically
feasible in the processed apple industry?
28Marketing Questions
- What is the condition of current markets for
processed apple products? - Where are the best, new marketing opportunities
for processed apple products? - What are the characteristics of industry vitality?
29Marketing Questions
- How do current consumer trends affect the
industry? - What do consumers want in new processed apple
products?
30Recent Marketing Research
- Industry overview
- Competitive analysis
- Processor survey
- Universe of products
- Consumer trends
- New product evaluation
- Advisory Council
31Marketing Research Plan
- Focus Groups
- Consumers
- New products
- Preferences
- Chefs
- Surveys
- Retail food buyers
- School foodservice
32Marketing Research Plan
- Foreign markets
- Costs of production
- Case studies/Benchmarking
- Apple industry
- Other industries
33Processor Survey
- Interviewed 21 processors, July to September,
1999 - 15 from New York State
- 2 from Pennsylvania
- 1 from Massachusetts
- 2 from Virginia
- 1 from Vermont
34Processor Products
- Apple Products
- Applesauce
- Apple Juice
- Cider
- Hard Cider
- Frozen Apples
- Cider Vinegar
- Pie Filling
- Canned Apples
- Apple Butter
- Dried Apples
- Baby Food
- Other Products
- Juice drinks/ades
- Spring water
- Iced tea
- Frozen fruit
- Fresh fruit
35Processor Apple Purchases
- 34.6 million bushels purchased per year
- 12.4 million bushels purchased from NYS growers
per year
36Processors Customers
- Retail food chains (10)
- Brokers/wholesalers (9)
- Foodservice (5)
- Independent retail stores (3)
- Direct marketing (3)
- Bakeries (3)
- Food processors (3)
- Government (3)
37Processors Purchasing Activity
- Direct from growers (15)
- Use brokers (6)
- Co-op (2)
- Other factors
- Buy in bulk trailers only
- Track pesticide records
- Diverse geographic range
- Grow our own apples
- West Coast apple prices
- Year round
38Preferred Suppliers
- Long-term relationships
- Loyalty
- Honesty
- Dependability
- Quality
- Pesticide records
39New York State Factors
- Electric rates
- Proximity to growers
- Freight
- Size of crop
- Long-term relationships
- High acid?
40Major Strategic Challenges
- International trade
- West Coast competition
- Labor availability
- Loss of growers and processors
- Lack of investment in marketing
- Consolidation of customers
- Oversupply
- Environmental regulation
41Technology
- Nothing revolutionary on the horizon
- Packaging innovation
- Need for better storage to support year round
operation
42Processors Outlook
- 8 Negative, 4 Neutral, 2 Positive
- Concerns for future
- Profitability
- Oversupply
- Foreign competition
- Lack of innovation
- Stiff price competition
- Consolidation
- Productivity