Apple marketers must help retailers understand how to drive total category dollars, Steve Lutz told attendees of the U.S. Apple Outlook Conference Aug. 21.

“We cannot lose the fourth quarter; it is absolutely critical,” said Lutz, vice president of the Perishables Group, West Dundee, Ill.

Retailers didn’t get the “big crop” message early on last season, and it cost the apple industry dearly, he said. The perception by growers and retailers that the 2008 crop was smaller than it actually has bogged down the market, he said.

Fourth quarter 2008 retailer ads for apples were off 6.8%, while food page grape ads were up 60% and strawberry ads were up 17%.

“Prices stayed high despite the size of the crop,” he said.

Starting out the 2008 season, retailers set apple prices 30% higher than the fall of 2007.

In addition, Lutz said promotional dollars slipped, item counts declined, retail prices rose and volume declined in the first few months of the season.

“Retailers basically took your opportunity with a big crop and said, ‘Thanks for the raise. I appreciate you dropping your prices so we can make more money.’” Lutz said.

In addition, Lutz said consumers chose other options to replace apple purchases.

For the majority of the season, Lutz said apple marketers didn’t receive the support they needed to be successful in the 2008-09 marketing year.

“You can really see the importance of getting retailers in sync with what you are trying to do in marketing your crop,” he said.

Through February, at least, he said retail promotions on fresh apples were lacking.

The number of retail impressions for apples declined last fall compared to 2007, Lutz said. Store level data show the number of apple stock-keeping units merchandised in fall 2008 trailed 2007 by about one item per store until mid-January, when apples began to feature more SKUs than year-ago levels. Apple SKUs peaks in mid-November at close to 30 items and averages about 19 items in early August.

Lutz said some consumers will likely remain cautious of apple pricing, while retailers may cut back on shelf space.

Looking ahead to the 2009-10 season, Lutz said apple marketers need to have in place customer-specific value strategies that will reconnect f.o.b. price and everyday promotional prices. Lutz said that apples have traditionally been one of the higher-margin fruit sold at retail, but he said it doesn’t always have to be that way.

“As a marketer you have to be able to go to a retailer with a plan to drive total category profitability,” Lutz said. “To get those prices back in check, focus on profitability for the retailer and total dollars and give them an alternative,” he said. “Give them another way to make their numbers – that’s your best hope.”

In addition, he encouraged marketers to develop variety-based store level planning and apply all retail tools – merchandising, assortment, pricing and promotion – in the execution of that strategy.

“Helping retailers create the mix of all the different varieties in selling their apple department is more important than it has ever been,” he said.