The new facility being constructed by Columbia Marketing International and McDougall & Sons in Baker Flats, WA, is close to completion.
“We are now using the facility as a cross-dock location and will be working through the winter to complete the inside,” said Steve Lutz, vice president of marketing. “When completed, this will be an $8 million storage and loading facility that will allow CMI to be ready for harvests that continue to be of record-breaking size.”
CMI, headquartered in Wenatchee, WA, markets a full apple manifest, and roughly 40 percent of its overall volume is moved from December through February. Although statewide apple volume estimates were downgraded in November, Lutz said, “[CMI was] very close to hitting our pre-season crop estimate on apples. I think we missed by around 1 percent.”
The demand for organic apples is increasing, and Lutz said CMI continues to invest in plantings of new organic orchards to meet consumer demand.
“At this time, the percentage of organic apple volume when compared to our overall volume is roughly 14 percent,” he stated. Organic product is marketed under the “Daisy Girl” label.
Lutz said statewide movement is 20 percent below last year for Dec. 1. “[Movement] has been adequate to maintain steady markets on most varieties. [It’s] just a little lower than last year when we didn’t have competition from Midwest and Eastern shippers due to severely reduced crops in those areas. Export movement is down as well but not by a large margin. All normal markets are pretty active.”
He said sizing is generally larger this year.
All CMI packer-shippers have new plantings of Honeycrisp, Gala and Fuji apples under way. “In addition, McDougall & Sons continues to plant Ambrosia apples, and Columbia Fruit is planting more ‘Kiku’ brand apples and Kanzi apples each spring,” Lutz said.
CMI is an exclusive marketer for Ambrosia, Kiku and Kanzi. Kiku is available out of Washington in January, and Kanzi is available in February.
“Our complete line of shippers, display units, tote bags and other POS materials is updated and ready to go,” Lutz continued. CMI has redesigned its two- and five-box shipper units as well as its pouch bags for Ambrosia and Kiku.
A new three-count Grapple pouch bag will be introduced this season. Lutz said it will be available on a limited basis initially and then become more widely available starting in mid-January. “This high-graphic pouch has been a big hit due to its attractive new easy-to-grab bag and its price point at the register,” Lutz noted. “A supporting two-box Grapple display is available to maximize sales.”
CMI also plans to introduce a new two-pound high-graphic pouch bags for its “Hero” brand of small apples, which is perfect for children. “We’ll be packing Reds, Fujis, Grannies and Galas in those bags. A two-box shipper unit, along with POS materials, will be available to support this program.” An online interactive program for children is also available.
Lutz said market dynamics have been interesting. “With the large crop nationally, both f.o.b and retail prices are declining,” he stated. “The result is price deflation at the store level. While this provides value to consumers, retailers must guard against declining sales dollars. The earliest data available indicate that year-to-date apple category dollars have declined by nearly 10 percent from the same period last year.”
Retailers, he went on to say, can minimize dollar declines in two ways. One is for them to take advantage of larger-sized fruit from this season and shift up at least one size in bulk displays. “Since most consumers generally purchase the same number of fruit items in each transaction, an increase fruit size will boost transaction size and drive stronger dollars,” he explained.
The other strategy, he continued, is to use promotions and merchandising on more expensive apple varieties “to pull consumer purchases away from the value segment. Every consumer purchase of a premium product drives higher transactions than purchases of value items. Retailers can leverage this opportunity through thoughtful allocation of shelf space, merchandising and including these items in promotional plans.”
According to Lutz, the company’s “backyard” has become the consumer’s backyard with the aid of social media. “We live in such a social world, where our consumers want to affiliate themselves to brands they stand behind,” he illustrated.
“They want to ‘share’ a recipe they grab from our site or ‘like’ a photograph that we post of fresh fruit being picked from the tree — with the mountains and Columbia River in the background. We love it,” he added.
CMI is also using its Facebook site to talk about its growing practices and to receive consumer feedback.