Market Overview

A Look At Apple Freight

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A Look At Apple Freight

The release of Washington state's first homegrown apple variety is getting the kind of star treatment typically accorded the debut of a major Hollywood movie, with a $10.5 million marketing campaign, a film trailer — "coming late 2019, 20 years in the breeding" — and a name, Cosmic Crisp, that evokes a superhero of the pome fruit world.

"There has never been an apple launch of a single variety of this magnitude," said Kathryn Grundy, director of marketing at Proprietary Variety Management, the team marketing the Cosmic Crisp.

Scheduled for its supermarket debut on Dec. 1, the Cosmic Crisp is the first apple ever developed in Washington state, which grows the majority of the United States' apples. Growers are hoping the apple will inject new energy into a market that has struggled in the wake of the trade war and record volumes that have depressed prices.

"We're trying to have apples people pull through the supply chain instead of push them through," said Aaron Clark, vice president of Price Cold Storage in Yakima and a fourth-generation grower.

Born And Bred In Washington

Developed by researchers at Washington State University, Cosmic Crisp was bred to be as sweet and tart as one of its parents, the beloved Honey Crisp, Clark said, but more stable and less vulnerable to environmental conditions.

Crisp's second progenitor is the Enterprise, another popular variety.

"First and foremost, we hope people really like to eat it," said Clark, who has invested about $3.5 million in growing 80 acres of Cosmic Crisp apple trees.

To boost interest, distributors are relying on a time-honored strategy: limit supply. Only 450,000 40-pound boxes will be available for sale in 2019. That will jump to more than 2 million boxes in 2020 and more than 21 million by 2026, Grundy said. 

Freight Impact

The release of the Cosmic Crisp coincides with Thanksgiving week and Christmas tree season — Washington state is one of the biggest producers —  and this time of year capacity can get tight, said Brian Focht, manager of five Washington state fruit trade associations.  

"But I haven't heard any problems about freight," he said.

Grundy said she didn't know how many of the industry's 54 warehouses were stocking the new variety, but its release means "there are great opportunities for reefers."

The launch of the Cosmic Crisp may be having an impact on reefer capacity in the Northwest region, which is tightening as rejection rates hit the mid-30s. (Image: SONAR)

Washington is by far the country's top apple producer. Around 58% of apples produced in the United States are grown in Washington, followed by New York with 11% and Michigan with 8%.  This year's Washington fresh apple crop is estimated at 137.3 million 40-pound boxes, up from around 116 million in 2018.

The added volumes pose a challenge for the export market, Mark Powers, president of the Northwest Horticultural Council, a Yakima-based trade association, told FreightWaves earlier this year.

China slapped a 50% tariff on U.S. apples in 2018, reducing state shipments to that country by 20%. 

Washington growers did get a reprieve this year when Mexico, the state's No. 1 export market – importing 13 million boxes annually – removed the threat of a 20% retaliatory tariff. Canada, the state's No. 2 market, also dialed back threatened tariffs.

Destined for the domestic market, the Cosmic Crisp has good potential for export, according to Clark. "But export depends a whole lot on politics," he said. "We're hoping that eases up."

The Buzz

Less than a week before the celebrity fruit hits the shelves, even the marketing team has been left in the dark about where the apple is being shipped and sold, Grundy said.

"We're an industry of competitors," she said.

Grundy said as soon as the first Cosmic Crisp sighting comes in, "we'll post on our Facebook page."

Image by S. Hermann & F. Richter from Pixabay

 

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