The 2022/23 apple campaign was characterized by two distinct phases: the first was rather difficult, with large volumes yet not very satisfactory prices, while the second one from March 2023 onwards, was characterized by livelier sales and lower stocks. It is still too early to make a forecast for the new season, but what is certain is that the new produce will arrive on an empty market, which could lead to great opportunities. We have talked about it with Kurt Ratschiller and Fabio Zanesco, respectively the sales manager and product manager of VIP's protected varieties.
Fabio Zanesco (product manager of protected varieties) and Kurt Ratschiller (sales manager) from VIP
"We knew that the start of the 2022/23 campaign was not going to be an easy one, as various factors not directly-related to the fresh produce world - the war, the economic crisis, inflation and the recession - did not favor consumption. What was weird for us was having limited stocks of Golden apples, yet not being able to defend prices from the start. The situation improved as the season continued, especially over the past few months. We registered record sales in May, as summer fruit lacked due to the adverse weather," reports Kurt Ratschiller.
"Last year's hot summer caused damages to good part of the European production, leading to a high percentage of waste. The Gala variety was the most affected. The quantities of produce stocked were sold at low quotations. In addition, apples from the southern hemisphere circulated for weeks on the European markets at the start of the season. In March and April, the lack of Gala led to many opportunities for the other varieties in stock. For us, this meant an increase in prices and stocks that ended one month earlier than usual for varieties such as Ambrosia and Envy. During the second part of the season, the sales of Pinova, Golden and Cosmic Crisp also went well. The commercialization of the latter will end in July."
VIP is aware that the amount paid to growers will not be satisfactory due to the waste, the low prices registered for half of the season and the steep increase in costs in 2022. "There are three elements to consider: average price, packout or sales percentage and general quality. There is no single market for all the varieties and, this year, prices will differ greatly depending on the cultivars. The good performance of some varieties during the second part of the season will not be enough to compensate for the difficult situation during the first part of the campaign."
Markets: "closures" and new opportunities
"We worked very well in Italy, our main market that absorbs 60% of the apples produced by the consortium, as well as in Spain and Portugal. We are happy with the feedback: we strengthened our presence with higher sales compared to last year, and defended prices. Good figures were also obtained in Latin America due to the lack of local produce. Good performance when it comes to both organic produce and integrated productions was registered in a high-spending market such as Scandinavia despite the presence of local production and the competition from Poland. We found it difficult to stand out in Germany, a country with sufficient stocks of its own main varieties, compared with the previous years. Egypt made a big difference this year, which for us is usually a market that absorbs overproductions. We exported less towards this destination, as we focused mainly on the European markets. We also exported less to Eastern and South-eastern Europe due to the competition from Poland, Greece and Turkey."
In such a difficult economy, the new sales system introduced in early 2023 enabled us to develop considerable outlets also for varieties that used to sell very little in specific destinations. One example is the Dutch market for Fuji apples. In addition, we need to report that Golden apples are doing well in Spain, where we are also developing new varieties such as Ambrosia and Envy."
As for the fact that South Africa, Chile and Argentina are not looking at the European market as they used to do, Ratschiller says that "the southern hemisphere is not capable of filling any gaps at the moment. They are doing a few tactic sales, but they are not strategic."
"In addition, around 15% of VIP apples is organic. "The organic produce market suffered in general for various reasons. First of all, because of the lower incomes and higher expenses, it is not of primary importance for consumers to purchase organic produce: if the percentage in Denmark is around 14-15%, it drops to 7-9% in Germany. In Italy this figure is even lower at around 3%. The percentage is similar in Spain, where we acquired new clients nonetheless, which is excellent news in such a difficult economic context."
Perspectives for the 2023/24 season
"There were no severe frost episodes in apple-producing areas in Europe, but the bad weather caused some damage in various producer countries. The most problematic area at the moment is Catalonia because of the drought, which should lead to a considerable drop in production. That is why no record yields are expected for the 2023/24 season. As for product quality, it will all depend on the weather of the next few months. What is certain is that the productions of the northern (2022) and southern (2023) hemispheres will end by September, so expectations for the new campaign are very high. We will start with the new season in August: SweeTango™ in late August and Ambrosia™ from late September. Then we will start with the other apples in October."
"We expect September and October to be very lively. The recession is looming over good part of the world, but the first economic data provide a more optimistic vision despite the fact that the Eurozone entered a technical recession during the first quarter. Inflation should have reached its peak, and should therefore drop from now on. We are therefore hoping the new season will start better than last year."
Packaging and new proposal by the EU Commission
"Packaging has three fundamental functions: protecting the product, inform and appeal. Especially for club varieties, which are innovative products, information and appeal are elements that makes them stand out more. That is why I believe thinking about increasing consumption by eliminating packaging is not the right solution. It's a good thing to sell the produce loose and not use packaging unless strictly necessary, but leaving the produce undifferentiated in stores means making a hundred steps back, as consumers would only be able to distinguish red, green and yellow apples without identifying the product. We certainly need to improve, eliminate overpackaging and everything that is excessive to be more efficient," commented Zanesco.
Brand awareness: the latest data
"The total brand awareness for the Val Venosta brand is 60% in Italy and 18% in Spain," concluded Ratschiller.
For further information: www.vip.coop