1. Marketing Apples in a Global Environment: Challenges and Opportunitiesby
Dr. Roberta Cook
University of California Davis
March 2003

2. Overview of Presentation
US apple situation
Area and Production
Trade
Consumption
Global apple production
Emphasis on China
Global apple trade patterns
Global consumption patterns
Marketing issues

3. US Apple Acreage and Change in 90-92 and 00-02 State Shares
31%
40% 7% 7%
Down 11%
Down 8%
=168,785 hectares
Source: USDA/NASS Jan. 03 and ERS

4. Apple Acreage in Washington
2001 Fruit
Survey*
Current
Estimate**
Reds
82,000
66,709
Goldens
27,000
25,324
Granny Smith
17,600
16,669
Fuji
24,400
22,537
Gala
25,500
23,775
Other
15,500
13,227
Total
192,000
168,241
*Washington Agricultural Statistics Service;**Tom Shotzko
Area peaked
in ’99 at
210,000

5. Total Acres by Size of Apple Orchard - Washington
1987
1992
1997
Acres
 25 AC
25-50 AC AC
>100 AC
TOTAL
Less than 25 AC
Over 100 AC
28,249
27,716
33,126
73,519
162,610 %
17.4
45.2
23,664
25,216
30,382
89,846
169,108
14.0
53.1
20,518
22,233
34,690
127,234
204,675
10.0
62.2
Source: Census of Agriculture, as reported by Tom Shotzko

6. Apple Acreage, by Variety in California and Washington, 2002
Fresh*
Current WA
Estimate**
Reds NA
66,709
Goldens
25,324
Granny Smith
6,200
16,669
Fuji
5,146
22,537
Gala
Pink Lady
3,788
1,267
23,775
Other
2,302
13,227
Total
18,703
168,241
*CAC and **Tom Shotzko
Likely 22,000 total acres in Ca. including processing, and fresh area of 20,250 in 2000, CAC

7. Apple Production, U.S. and Selected States, 1990-2002, in million metric tons
Source: USDA

8. U.S. Apple Production and Selected State Shares, 1990-2002
Source: ERS and NASS, Jan/03
State Shares State Avg Metric Tons % Change
WA 2,428,142 56% 46% 17%
NY 408,460 9% 11% -16%
MI 344,927 8% 9% -16%
CA 252,630 6% 8% -31%
PA 204,539 5% 5% -5%
Other States 690,872 16% 21% -29%
US ,329, % 100% -4%

9. California Fresh Apple Production, by Variety, 42 lb. Cartons
2002/03
2001/02
Granny Smith
2,235,993
2,437,835
Fuji
649,120
1,060,491
Gala
Pink Lady
1,015,111
266,877
1,102,086
239,581
Other
96,660
111,462
Total
4,263,761
4,951,455
Source: California Apple Commission, as of Dec. 1, 2002
WA Fujis down to 9 million boxes in 02/03 and Pink Ladies down to 500,000; WAC

10. Western U.S. Fuji Production in 1000 42-lb units
Source: U.S. Apple Association, Aug.2003 update

11. Western U.S. Fuji Production in metric tons
Forecast prior to frost
2002 Revised
Wa. and Ca.
Source: US Apples and 2002 revision from the WAC

12. FRESH US Utilization of Apples 1977-2002 PROCESSED
In Million Metric Tons
Update:
4,237,100 total
Short tons in
2002; 2002
fresh/
proc. shares
estimated
PROCESSED
FRESH
Sources: thru 01 ERS/USDA, 10-02; NASS Jan. 03 for 2002
‘77 ‘80 ‘ ‘ ‘ ’02*

13. Ave. Item Number in the Ave. US Fresh Produce Department
400
345
350
300
250
173
200
150
100 50
Pma study:
574 SKU’s in 2001
Number of items
Source: Supermarket
Business, Oct. 1999
1987
1998

14. U.S. Per Capita Consumption of Fresh Apples and Pearskg 12 10 8 6 4 2
87/88
97/98
APPLES
7.2
PEARS
1.4
77/ / /98..01/02
Source: ERS, USDA

15. US Per Capita Utilization of Apples in pounds
Source: USDA/ERS

16. US PER CAPITA FRUIT CONSUMPTION, POUNDS 1977-2001
273
269 90
118 85
Pounds per capita 71 24 26 74 54
Total for 2001 reaches 279
including some berries and olives.
Source: USDA/ERS, Oct. 2002

17. US PER CAPITA VEGETABLE CONSUMPTION, POUNDS, 1976-2001
441
359
123
125 93
Pounds per capita 77 47 50
178
147
115
Source: USDA/ERS, Vegetables and Specialties Yearbook, July 2002

18. Fresh Apples: U.S. Imports & Exports by Key Country
1992
1997
2001
2002
1000 metric tons
IMP EXP IMP EXP IMP EXP IMP EXP
Source: ERS, USDA

19. US Fresh Apple Imports, by Country, 1990-2002
In Thousand Metric Tons
Source: Census Bureau, US Dept. of Commerce

20. US Fresh Apple Exports, by Country, 1990-2002
In Thousand Metric Tons
Other
Indonesia
Hong Kong
Canada
Taiwan
Source: Bureau of the Census, US Dept. of Commerce
Mexico

21. Monthly US Imports of Fresh Apples by Country of Origin in 2002
Source: US DOC
Thousand Metric Tons
Months

22. Monthly US Imports of Fresh Apples by Country of Origin in 2001
Source: US DOC
Thousand Metric Tons
Months

23. Monthly US Imports of Fresh Apples by Country of Origin in 2000
Source: US DOC
Thousand Metric Tons
Months

24. Monthly US Exports of Fresh Apples by Country of Destination in 2002
Thousand Metric Tons
Source: US DOC

25. World Apple Production: Key Trends
China can now provide over 1/3 of all world apple production vs. 11% in 89/91, but area has stabilized.
The shares of production coming from N.A., Former Soviet Union, Other Asia and Europe shrank in the 90s, but Europe increased in absolute volume.
The share of S. American suppliers slipped only slightly in the 90s as production grew about 1 million metric tons to 3.4 million; share changed to 5.6% in 2001 from 6.1% in 89/91.
Recent adjustments downward in US, European, and possibly Chinese production for 2002/03 will likely boost Southern Hemisphere exports in 2003.

26. World Apple Production by Region (% total)
Avg Avg Avg
Region
Europe (exc FSU)
North America
South America
Africa
Oceania
F.S.U
China
Other Asia
(exc FSU)
World
Source: World Apple Report 2002

27. Global Pear and Apple Production, Million Metric Tons
Country
Apples (2002)
Pears (2000)
China 20
8.5
USA 4
.877
Chile 1
.333
New Zealand
.462
.42
Argentina .5
Australia
.328
.156
Europe 14
3.9
World 60
16.9
Sources: FAO and FAS

28. World Per Capita Fresh Apple Supplies 1990-2001, kilograms per person
Production grew by 50% vs. 15% growth
in world population.
Source: World Apple Review 2002

29. Apples: Total Production & Net Fresh Production, in million metric tons, Key Selected Countries
99/ /
Source: FAS, USDA

30. Chinese Apples – Total Production, Net Fresh Production, Fresh Imports & Exports, in million metric tons 25 20 15 10 5
Source: FAS, USDA
99/00
00/01
01/02
02/03f

31. China's Fresh Apple Imports, By Country of Origin, MY 2001 (July-June), Metric Tons
Source: FAS

32. N. Hemisphere Net Fresh Apple Production, Key Countries Excluding China,in million metric tons18 15 12 9 6 3
99/00 00/01 01/02 02/03f
Source: FAS, USDA

33. Southern Hemisphere Big Six: Long-term Upward Trend Broken
Source: World Apple Review 2002 and FAS for 2001 and 2002, updated in 2003
metric tons

34. Yantai North Andre Juice Co.,Ltd
Apple Production in China, , Metric Tons
Area in 2000 of 2,254,100 hectares vs. 2,986,900 in % are Fujis,
12-15% are Red Delicious.
Yantai North Andre Juice Co.,Ltd

35. Yantai North Andre Juice Co.,Ltd
APPLE PRICES IN CHINA
Guo Guang
Fuji
Yantai North Andre Juice Co.,Ltd

36. Yantai North Andre Juice Co.,Ltd
Chinese Apple Production, Distribution by Province, , metric tons
Projection of 27,605,000 to 31,000,000 Metric tons by 2010; Desmond O’Rourke
Yantai North Andre Juice Co.,Ltd

37. Yantai North Andre Juice Co.,Ltd
Chinese Fruit Production, % of Total by Type
OTHER
GRAPES
Banana
PEARS
CITRUS
APPLES
Yantai North Andre Juice Co.,Ltd

38. Yantai North Andre Juice Co.,Ltd
4.UF
2.Evaporator
1.Belt Press
5.Lab
3.Apple Silo
Close Belt Pressing System for Hygienic Application
5-Effect Evaporator
Storage in Apple Silo
Ultra Filtration system
R&D/Quality Assurance Center
Yantai North Andre Juice Co.,Ltd

39. 1997 – 2001 Chinese AJC Export, by Country
Unit : kg
Projection of 400,000,000 kg by 2010; Desmond O’Rourke
Yantai North Andre Juice Co.,Ltd

40. US Apple Juice Imports, by Country, 1997-2001
In 1,000 KL
Source: Census Bureau, US Dept. of Commerce
Tariff code:

41. World Fresh Apple Trade by Key Selected Country
in million metric tons
EXP
EXP
EXP
IMP
IMP
IMP
99/00
00/01
2002
Source: FAS, USDA

42. Chilean Apple Exports: Changes in Market Share by Destination
Country
Europe 46% 35% 32% 32%
U.S.A. 7% 8% 12% 12%
L. America & Caribbean 19% 37% 36% 39%
Other 28% 20% 19% 18%
Grand Total 100% 100% 100% 100%
Source: Chilean Fruit Exporter's Association

43. Chilean Apple Exports by Destination in million cartons (18 kg)
Other
L. America & Caribbean
USA
Europe
Source: Chilean Fruit Exporter's Association

44. Estimated European Per Capita Fresh Apple Consumption
kilograms per capita
Source: World Apple Review 2002

45. Estimated Per Capita Fresh Apple Consumption: Other Major Producing Countries
kilograms per capita
Source: World Apple Review 2002

46. US and EU: Trend in Grower Selling Prices for Fresh Apples
Indexed to 1985 base = 100
Source: World Apple Review 2002

47. United States: Annual Average Retail Price of Fresh Red Delicious Apples 1980-2001
cents/lb - current & deflated
Source: World Apple Review 2002

48. WHAT a DOLLAR SPENT for FOOD PAID FOR in 2000 in the USA
Labor - 38¢
Packaging - 8.0¢
Transportation - 4.0¢
Advertising - 4.0¢
Depreciation – 3.5¢
Business taxes - 3.5¢
Other costs - 4.0¢
Energy - 3.5¢
Profits - 4.5¢
Interest - 2.5¢
Repairs - 1.5¢
Rent - 4.0¢
19¢
Marketing bill 81¢
Source: ERS/USDA
Farm value 19¢

49. U.S.: Producer Price Indexes 1991-2001 for Fresh Granny Smith and McIntosh Apples
Calendar Years, Base, Dec = 100
Source: World Apple Review 2002

50. Washington State: Relative FOB Prices of New Varieties - 1990-2001
Average price all varieties in each crop year = 100
Source: World Apple Review 2002

51. World Apple Variety Trends, Excluding China
Red Delicious and Golden Delicious will lose market share but remain in first and second place
Gala/Royal Gala will be the principal winners, growing by 50% over the next decade, reaching third place
Fuji will knock Granny Smith out of fourth place
Combined volume of Jonagold and Jonagored will approach that of Granny Smith
Source: World Apple Review 2002

52. World Apple Variety Trends, Excluding China
Idared keeps growing, especially in Eastern Europe
Braeburn follows in 8th place
McIntosh, Elstar, Cortland, Cox’s Orange and Empire will be stable
Pink Lady production will triple between 2000 and 2010, but it won’t surpass 1% of production in the principal producing countries
Other growth varieties: Cameo, Honeycrisp, Pacific Rose, Fiesta and Sundowner
Source: World Apple Review 2002

53. France: Apple export destinations & volumes, 1998 & 2000, 1000 metric tons
light = 1998 dark = 2000
Totals:
,207 tons
2000 – 847,833 tons

54. light = 1998 dark = 2000 Totals: 1998 - 540,138 tons
Italy: Apple export destinations & volumes, 1998 & 2000, 1000 metric tons
light = 1998 dark = 2000
Totals:
,138 tons
,053 tons

55. Netherlands: Apple export destinations & volumes, 1998 & 2000, 1000 metric tons
light = 1998 dark = 2000
Totals:
,870 tons
2000 – 294,356 tons

56. Belgium & Luxembourg: Apple export destinations & volumes, 1998 & 2000, 1000 metric tons
light = 1998 dark = 2000
Totals:
,621 tons
,033 tons

57. TOP 2001 GLOBAL FOOD RETAILERS
sales % grocery rank sales company ($ billion) sales
Supercenters U.S. $ %
2 Carrefour/Promodès France $ %
Holland $ %
U.S. $ %
Germany/Switz. $ %
U.S. $ %
7 Kmart U.S. $ %
8 Safeway U.S. $ %
30 grocery retailers account for 10% of global food retail sales.

58. TOP 2001 GLOBAL FOOD RETAILERS%
sales % grocery rank sales company ($ billion) sales
9 CostCo U.S. $ %
U.K. $ %
Germany $ %
12 ALDI Markt Germany $ %
13 ITM Entreprises France $ %
14 J. Sainsbury U.K. $ %
15 Ito - Yokado Japan $ %
16 Edeka/AVA Germany $ %
Source: The Food Institute Report, June 17, 2002

59. TOP 2001 GLOBAL FOOD RETAILERS
sales % grocery rank sales company ($ billion) sales
17 Aeon/Jusco Japan $ %
Tenelmann Germany $ %
19 Auchan France $ %
20 IGA (Supervalu) U.S. $ %
21 Daiei Japan $ %
22 Casino France $ %
23 E. Leclerc France $ %
24 Delhaize “Le Lion” Belgium $ %
25 Schwarz-Group (Lidl) Ger. $ %
Source: The Food Institute Report, June 17, 2002

60. Building Retail Partnerships
Roles and Responsibilities
Retailer/ Wholesaler
Grower/Shipper
Boards/Commissions
Category Development
Best Practices
Store-level Research
Purchase Triggers
Consumer Drivers
Long view
Effective Tactics
Shopper Savvy
Loyalty Card
Better Systems
Results-driven
Tracking Focus
Dept. Profitability
Strategic Approach
Fact-based Selling
Innovative Marketing/ Merchandising
Efficient Practices
“Category” vs. “Item” Perspective
Source: Adapted from The Perishables Group