New Apple Seeks to Conquer Crowded Market

By Stephanie Westhelle, GW Graduate School of Business Student and Katherine Nick, GW MPH Student

“Remarkably Crisp, Sweet, Tangy, and Unbelievably Juicy!” The Cosmic Crisp Apple varietal, developed by Washington State University Tree Fruit Research & Extension Center, will hit stores nationwide in 2019. Consumers should be ready to pay the extra buck for these delectable fruits that will make it easier for Americans to eat a healthy diet.

Farmers will see a nice premium for Cosmic Crisps, and some growers, like Mike Robinson of BMR Orchards in Royal City, are already ahead of the consumption curve. “I’ve joined the thundering herd, I want to capture the Cosmic Crisp premium before the other 7 million trees catch up.”

Even though Cosmic Crisp Apples likely will become a hot commodity in the near future, they join an already crowded field that includes numerous staple varietals: Red Delicious, Gala, Granny Smith, Fuji, Golden Delicious, Honeycrisp, McIntosh, Rome, Cripps Pink/Pink Lady, and Empire. These top 10 varietals, among the 190 other varieties that are commercially grown in the United States, are scattered over 25,000 farms among 32 states. These 25,000 farms utilize 384,237 acres to produce the U.S. apple crop. Currently, the U.S. is the world’s second largest country producer of apples. Sales reach close to $4 billion, with another $14 billion related to downstream economic activity.

Table 1. Apple Production (1,000 Metric Tons)


The only country to beat the U.S. in its yearly apple production is China (the combined 28 countries of the EU collectively come in second). China produces over 43 billion pounds of apples annually, while providing the world nearly 40% of the apples we utilize to produce apple by-products.

U.S. farmers are having trouble competing with the lower priced apple concentrate that China now produces. With an eye to the bottom line, juice companies are not willing to pay the higher price per ton U.S. farmers now receive. According to the USDA Economic Research Service, U.S. apple prices doubled between 2000 and 2010, jumping from $75.10 per ton to $147 per ton. While domestic crop prices rise, consumers are still demanding low priced food items. An example of this tension is seen in juice prices. In 2000 Motts Apple Juice was selling for an average of $2.10 in the grocery store. Now the price tag is $2.48. The difference is only an 18% mark-up over the past 17 years, while domestic apple prices have nearly doubled in the past decade. Juice companies simply cannot afford to purchase all of their apples from U.S. farmers; especially with extreme price pressures from consumers.

Consumer preferences dictate demand for commodities and manufactured goods and Americans choose to consume their fruit in liquid form. The average American may eat 28 pounds of apples a year, but over half of this consumption is apple juice. Unfortunately, juice does not contain the same nutritional value as fresh apples or even dried fruit. The Dietary Guidelines for Americans suggest that Americans eat more whole fruit. Hopefully, with the arrival of the Cosmic Crisp apple and the USDA’s marketing campaign for eating the half plate of fruits and veggies, we will see a significant boost in domestic apple production, and a growing trend toward consuming less juice and more fresh apples.

 

 

Katherine Nick is a graduate student at GW’s Milken Institute School of Public Health where she is pursuing a MPH in Public Health Nutrition. She is interested in improving food security in vulnerable populations, and increasing access to nutritious, safe and sustainably produced food for all.

Stephanie Westhelle is a graduate student at GW’s School of Business, her research is focused on the sustainability efforts in domestic and international food distribution systems within tourism development. She has over a decade of experience in hospitality, and is passionate about food waste being eliminated in her lifetime.