WENATCHEE, Wash. — Fresh-cut apples are taking a bigger slice of the apple industry, and the latest move by fast food giant McDonald’s could lead to a giant sized bite in the next year.
McDonald’s officials said in July that fresh-cut apple slices will be standard in every Happy Meal.
The rollout of the new Happy Meals begins in September in select markets and should be nationwide with all 14,000 U.S. restaurants by the end of the first quarter of 2012, company officials said.
The sliced, peeled apple packets in the new Happy Meals will shrink to 1.2 ounces from the previous package of 3.1 ounces. Parents will have the option to request double apples and eliminate the fries, McDonald’s said.
McDonald’s has offered apples as a requested choice in Happy Meals since 2004.
The company said that while recent research shows that 88% of McDonald’s customers have been aware of the apple slices option, apples are chosen in just 11% of Happy Meal purchases.
U.S. Apple Association projections for fresh-cut apple utilization for the 2011-12 season were made before McDonald’s announcement, said Mark Gedris, director of membership and communications for the Vienna, Va.-based association.
U.S. Apple forecasted apple utilization in 2011-12 by the fresh sliced industry at 2.93 million 42-pound units out of a total crop of 226.5 million bushels. That is about 1.3% of the total 2011 crop, down from 1.4% in 2010-11 but up from 1.2% in 2006.
The industry may begin to have a better sense of the implications of the McDonald’s Happy Meal inclusion of fresh-cut slices by the end of October or early November, Gedris said.
The fast food chain has sales of more than $30 billion per year.
There is no company-reported figure on the number of Happy Meals sold in a year.
However, www.answerbag.com states that McDonald’s sells approximately 2.5 million Happy Meals per year. McDonald’s U.S. sales in 2010 were $8.1 billion, and a McDonald’s spokesman indicated Happy Meals account for less than 10% of U.S. sales.
Beyond the new developments in the foodservice market, Tony Freytag, marketing director for Cashmere-based Crunch Pak, said that for the sales year ending in June the company was up 27% over the previous year.
The company has about 40% of the fresh-cut apple slices sold by grocery stores.
As a category, sales are up over 30% in the last four years.
“Given the economy, I’ll take that kind of growth,” Freytag said.
With the increased emphasis on healthy snacking for kids, fresh-cut apples are well positioned for future growth, he said.
Though the company doesn’t currently supply McDonald’s he said the elevated awareness of fresh-cut apples will lift the entire fresh-cut industry.
He said there has been a 23% increase in the last two years in the points of distribution for sliced apples.
Freytag said that the fresh-cut industry has been positive for growers as well. Crunch Pak primarily uses gala, Pink Lady and granny smith.
What’s more, he said studies have shown that cannibalization is minimal with fresh-cut apples and whole apples.
The late harvest of Washington apples was not unexpected, and Freytag said the company adjusted imports as it needed to.
At the retail level, Freytag said the two optimal times for selling fresh-cut apples are the back to school period in the fall and then after Christmas break in the first part of January.
“January is usually one of our top three or four months of the year,” he said.
Freytag said all the major retailers have sliced apples, and secondary retailers are also carry fresh-cut apple slices.
Randy Steensma, president and export marketing director of Nuchief Sales Inc., Wenatchee, said fresh-cut demand has helped market prices for granny smith apples.
Loren Queen, marketing and communications manager for Yakima-based Domex Superfresh Growers, said McDonald’s commitment to apple slices could be a terrific development for growers.
“I think you will see more packing lines dedicated for fruit specifically for the sliced apple deal,” he said.
“In the past, it hasn’t been a priority.”