Growers and consumers benefit from upsurge in value-added fruit offerings
By Renee Stern
Quick-serve restaurants such as Subway and McDonald's are adding fresh-cut fruit to their menus, heralding a broad expansion of the category and what could be a boon for growers.
"It's going to be a great thing for the grower community," says Rick Harris, president of Sunkist Taylor LLC in Watertown, Mass. "We're all trying to expand the pie and go after different segments of the market."
"Cut food is the only economical progression we can look at," says Mike Carnahan, owner of Carnahan Farms Inc. in Edwardsport, Ind., who four years ago diversified his crops to include watermelons. "The more you process it, the more attractive it is for (consumers) and the more they're going to pay for it."
Melons and apples have led the way, but other fruit, from oranges to grapes, are finding a place in retail and foodservice markets, either as standalone products or as mixes.
A study by the Pear Bureau Northwest in Portland, Ore., shows demand for fresh-cut pears, with even more potential in foodservice to lead consumer interest, says Kevin Moffitt, president and chief executive officer. Ripening and consistency issues first must be addressed, however.
"Pears need to be softened to a certain pressure for consumers to enjoy them, but once they get to that point it's hard to ship them very far," Moffitt says.
Poised for growth
Compared with salads and fresh-cut vegetables, value-added fruit products currently make up a small part of the retail market, says Carl Svangtun, executive vice president and chief operating officer of Sun Rich Fresh Foods Inc. in Richmond, British Columbia, Canada. While fruit is less shelf-stable than vegetables, he says retail still will provide growth opportunities in the future.
But foodservice outlets offer visibility that may lead the way. Subway began selling Sun Rich's sliced apple packs last spring in many of its 22,000 U.S. stores. Add in McDonald's fruit salads and Burger King's plans for apples sliced to resemble french fries, and you have market-dominating potential, Svangtun says.
The driving force is consumer demand for convenience and interest in healthful meals, producers say.
"We can't limit our imaginations" when it comes to developing new products, says Tony Freytag, marketing director for CrunchPak in Cashmere, Wash. He points to the evolution of fresh-cut vegetables from bagged salads and plain baby carrots to salad kits and carrots packaged with dips.
"You can eat fruit several times a day, and applications are more versatile than a bagged salad," says Monique McLaws, marketing manager at Dulcinea Farms in Ladera Ranch, Calif.
Targeting different consumer segments
Producers downplay concerns about cannibalizing sales of whole fruit.
In 2006, overall apple sales grew 14 percent and sliced apple sales jumped 43 percent, Freytag says. Double-digit increases in both areas indicate the category is attracting new consumers.
Likewise, Dulcinea Farms has seen 35 percent growth in production each year for the past two years, says Justin Schmidt, operations director.
"There are certain (shoppers) who don't even go into the produce department," Harris says. Value-added products, particularly when cross-marketed in other store departments or sold in venues such as convenience stores or cafeterias, can help change these habits.
Sunkist's Fun Fruit line--which includes Orange Smiles and Pineapple Pal wedges--grew out of a school foodservice initiative that now targets anyone looking for grab-and-go convenience, whether for after-school snack or eaten in cars or at desks, Harris says. Growers also were seeking a way to "build the next generation of fruit eaters," he says.
Peeled, cored pineapple in a container has a ready-to-eat appeal that whole pineapples lack, encouraging impulse purchases, Svangtun says. Subway customers now may add bags of sliced apples to their sandwich purchases instead of cookies or chips.
"That's a piece of fruit they wouldn't eat otherwise," he says.
Growers benefit, too
An expanding market for fresh-cut fruit also helps stabilize supply and price fluctuations by moving that fruit out of the commodity category, Schmidt says.
"If you look at the food chain, what adds more value to the consumer generally flows down to the grower," he says.
Many processors cultivate relationships with growers to procure consistent supplies with their required specifications, offering in exchange a steady, secure market.
For Dulcinea Farms' growers, that also may mean access to exclusive products launched by parent company Syngenta, Schmidt says.
At the same time, processors have greater say in what varieties and hybrids growers produce, as well as in harvest maturity and other quality standards. "We can't just put anything in the bag and expect that's what the consumer wants," Freytag says.
Some apple varieties provide more uniform shapes for slicing or hold firmness longer once cut. CrunchPak, for example, focuses on gala, Pink Lady and Granny Smith for both high firmness and flavor, Freytag says.
Seedless citrus and grapes or melons with smaller rind and smaller seed sacks also win processor approval. Brix is another quality measure that's typically specified.
The end result is a broader range of market opportunities for a grower's total crop, increasing overall per-acre returns.
"Processors care less about cosmetics than retailers," Svangtun says.
Pineapples grown for retail markets, for example, require a perfect crown to catch shoppers' eyes, Harris says. Processors, however, would prefer pineapples with no crown to cut off and discard.
Growing fruit for value-added products increasingly means meeting requirements for food-safety programs as well, Carnahan says. The extra work is a tradeoff he's willing to make.
"The more you put into it, the more you will eventually get out of it," he says.
Because of the lead time needed for newly planted trees to reach production, growers must be tuned into market demands, Freytag says. Equally important, "you have to find out what you do best and move accordingly."
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