It has undoubtedly been a painful year for fresh produce businesses, coming on the back of several tough years.
Despite initial gains in terms of volume, brand awareness and engagement, new markets are yet to see this investment trickle through to their bottom line. This is naturally frustrating but a recent uptick in Pink Lady® volume globally, in contrast to all other fresh produce categories, indicates there are opportunities ahead for those who embrace emerging and alternative markets as part of their seasonal planning.
The below graph illustrates the current environment, showing steady decline in year-on-year volume trade across all fresh produce categories.
Graph 1: Pink Lady vs. Fresh Produce vs. Other Fruits
The aftereffects of the COVID-pandemic continue to constrain fresh produce consumption and market recovery has been further hampered by the inflationary environment globally. Nowhere is the trend more evident than in Pink Lady’s mature European markets which are also dealing with the economic challenges of a high inflation and recessionary environment.
Overall, southern hemisphere (SH) volume is down eight per cent on the prior season (161,991MT YTD compared to 176,668 MT prior season), however, stronger September results saw more volume of Pink Lady® apples shipped compared to prior season. This contrasts with declines in all other fresh produce categories during the same period.
The uptick is largely due to late season demand increases in PLD and SMSP managed markets, amplified by the likelihood of a delayed and shorter northern hemisphere (NH) crop. This has effectively extended the season for those suppliers able to deliver quality Pink Lady® apples into the later September – December window.
European results also highlight the need for Pink Lady® suppliers to diversify their market base and undertake data driven planning to accurately forecast and respond to changes in the wider market.
Organisations which continue to focus solely on mature markets risk losing out. Those Pink Lady® exporters who have invested and built a strong position in a diversified network will have greater ability to optimise marginal value across their channels and product lines, and stand to benefit from ongoing growth in Southeast Asia, the Gulf States, India and North America.
Partnering with the right network of exporters, importers, retailers and knowledge providers will be key to managing and growing volume and value in these new markets.
Emerging trends
Though partly driven by the temporary slowdown in European consumption, it is positive to see some SH Pink Lady® suppliers pivoting supply towards new and emerging markets, shifting from 83 per cent to 76 per cent reliance on Europe and UK, compared to the same time last year.
Graph 2: Percentage Change in Distribution
While this may have come at the cost of lower returns due to the reactive nature of the shift, sustainable market investment and a planned approach to export should deliver more favourable returns. Importantly, greater engagement of the NH network in new markets across future seasons is critical.
Working towards year-round supply of high value Pink Lady® apples in emerging markets is a key goal for APAL and the broader network as we lay the foundations to take advantage of forecast growth in new markets.
Uncertain and inconsistent NH supply has, to date, constrained the enthusiasm of many retailers keen to support brands that offer year-round supply. When we can match the investment in market building activities and relationship building of the SH with the NH season, Pink Lady® will find the momentum required to rapidly increase sales and value.
