It is often said “No man is an island”, and likewise, Pink Lady® is not immune to the current, challenging economic conditions.
Despite this, Alvin Kee – APAL’s Financial Planning & Analysis Manager, has reason for cautious optimism with early forecasts indicating demand for Pink Lady® fruit will remain robust overall, faring better than other apple varieties.
Alvin acknowledges that current conditions have taken their toll on global trade of fresh produce, resulting in an 11.33 per cent contraction in Q1 2022 (-16 per cent year-on-year), with apples declining by 17 per cent in the same period (-22 per cent year-on-year), but highlights that some markets are in fact experiencing promising growth for the brand.
One such example is in the US where Pink Lady has grown +30 per cent in volume while declines are being experienced in all other major apple varieties. Whilst inflation has led to single figure growth in dollar value for most apples, Pink Lady is again above 30 per cent for the year, taking up the gaps of other core varieties (Nielsen MAT May 2022).
This would not be the first time Pink Lady® has bucked the economic trend: during the 2020 COVID-impacted season, Pink Lady® apples fared substantially better than the market average, declining by less than 1 per cent, compared to -6 per cent in the general apple category.
Rate of change in global trade
*Source: IHS
Despite the economic climate, actual Pink Lady® fruit shipments to May 2022 are slightly higher by 1 per cent or 550MT compared to the previous season. By contrast, Cripps Pink shipments to May 2022 are significantly lower than the previous season, down by 33 percent or 8,365MT.
Pink Lady forecast VS actuals
Cripps Pink forecast VS actuals
This relatively upbeat outlook for Pink Lady® (in relation to the overall category) is based on an expected return to normal production levels in New Zealand (up this season by 18.5 per cent), continued South African production growth (up by 18.3 per cent) and pockets of growth in newer markets.
It remains to be seen whether these gains will be offset by the current logistics challenges faced globally.
Overall, volume to Europe is expected to drop by 10 per cent partly due to anticipation of a strong stone fruit season, and also due to ongoing supply chain constraints.
Further, while an early end to the 2021/22 NH season initially boded well for SH fruit, logistical and supply issues have limited licensees ability to optimise this gap. A proactive, managed and balanced European programme, however, is expected to minimise the quality risks and issues experienced last season, with the goal of maximising consumer sales.
UK volume is expected to remain relatively stable, while expansion of the Managed Markets (formerly known as SMSP Markets) programme continues to build demand for Pink Lady® apples in new markets.
Acknowledging the likely slow-down in Europe, Alvin emphasises this is not the time to pump the brakes: “The message to our licensees is not to cut supply, but to look in less familiar places for opportunity. Diversification of market strategy will be key.”
Alvin points to Indonesia and the Philippines as examples of new markets and territories that currently have little or no supply of quality Pink Lady® product, but where consumers are showing interest in the category. Likewise, the African continent has experienced solid growth.
Indonesian apple import trend VS Philippines apple import trend
Pink Lady® licensees interested in exploring new markets including North America, Asia, The Gulf States and Africa, are encouraged to reach out to Craig Chester, Head of Commercial Development – Emerging Markets, to confirm programme opportunities via [email protected]
