Cosmic Crisp apple price plunges; COVID-19 hinders in-store marketing

“That sort of fall in two months is quite unusual. If I were a grower right now I would want an emergency meeting to find out what to do,” said Desmond O’Rourke, world apple analyst and retired Washington State University agricultural economist in Pullman.

He said the drop has royalty ramifications for WSU, which bred and developed the apple over 20 years.

“It was a surprise to all of those who have millions of dollars invested in it,” said Brian Focht, manager of the Washington Apple Growers Marketing Association in Wenatchee.

“With last year’s debut, it started at $65.90 a box and then up and averaged $72 for the season. This year we started about the same and just didn’t get the pull we needed to move the fruit,” Focht said. “We anticipated big demand and it wasn’t there.”

He noted several causes.

Cosmic Crisp is held in storage from fall harvest to December for proper ripening. When it reached grocery stores in December it couldn’t get the same press attention that it got the year before because COVID-19 and the presidential election dominated the news, he said.

Retailers were too busy dealing with COVID-19 and keeping staple items in stock to think about Cosmic Crisp advertising and displays, Focht said, adding that in-store sampling was banned.

“Retailers were not displaying it as a premium apple but putting it in regular displays with all the other bi-colored apples. They didn’t move because they were twice as expensive,” he said.

Cosmic Crisp was priced at $2.99 to $3.99 per pound versus $1.29 to $1.99 for other varieties.

“After one season, consumers haven’t had a chance to figure out it is a premium apple,” he said.

There’s also more Cosmic Crisp to sell this season than last.

Production increased from 360,000 boxes from the 2019 crop to 1.626 million boxes from the 2020 crop.

It is projected to be 5.1 million boxes from the fall 2021 crop and 22 million by 2026.

As of March 1, 734,000 boxes had been shipped this season and 892,000 remain to be sold, according to the Washington State Tree Fruit Association.

“We needed to move 80,000 boxes a week and were moving 40,000, so we needed something to kick it in the rear,” Focht said.

Prices were dropped and some “incredibly expensive” deals have been struck with some big retailers, he said.

A major retailer, which he declined to name, will give 1 million Cosmic Crisp apples away, one apple with each online grocery order by consumers, starting about the end of March. It’s intended to replace in-store sampling.

“There is concern in the industry and people are brainstorming how to turn it around,” Focht said. “Part of it is big retailers only scheduled it through April because we ran out last year in March. They assumed it would be the same.”

WSU and Proprietary Variety Management, a Yakima company on contract with WSU to manage commercialization, are spending $10.5 million, from tree and fruit royalties, from 2018 through 2022 on promotions, mostly social and digital media.

Those efforts are aimed at consumers but more needs to be done with retailers, Focht said.

The severity of the price drop in mid-season led O’Rourke to suspect quality issues. He said Fuji and Honeycrisp both had quality issues in their early years.

Focht said this season’s Cosmic Crisp is coming off two to four-year-old trees so quality is not as consistent as it will be when trees are more mature.

“This is a good apple. Nothing is a slam dunk. We will keep working at it. The 1 million single samples will be followed by other creative ideas,” Focht said. “I’m confident we will make the necessary adjustments. A pandemic environment is not the best in which to sell a new product.”

The 2020 crop is estimated at 122.6 million 40-pound boxes as of March 1 with 61 million boxes sold and 61.6 million remaining in warehouses to be sold. That’s good movement, O’Rourke said.

The crop is down 8.4% from the 133.9-million-box 2019 crop. It’s 3% less than the average of the preceding five years and 14.6% less than the record 143.6-million-box crop in 2014.

While prices of most varieties are good, “it won’t be one of the better years with costs escalating as rapidly as they have,” Focht said.

“COVID has been expensive. There will be profitability but it won’t be exponential,” he said.

O’Rourke said the season-to-date (Sept. 1 to Feb. 28) average price of Honeycrisp is up 16% and all conventional apples including Honeycrisp are up 14.8%.

Among club or proprietary varieties, Envy and Juici were up slightly in price while Autumn Glory and SweeTango were down slightly, he said.

Organics, which make up 13.5% of the crop, rose 6.9% in average price from $34.72 to $37.13 per box, helping, with Honeycrisp, to pull up the total average of all apples, O’Rourke said.

Prices should strengthen in coming months as inventory declines, he said. Main varieties, excluding Honeycrisp, are still likely to average $28.50 for the season versus a little under $20 for the 2019 season, he said.

As of March 5, the average asking price among Yakima and Wenatchee district shippers for extra fancy (standard grade), medium size 80 apples per box and 88 per box for Gala was $22 to $28, according to USDA.

Red Delicious 80s and 88s were $17 to $22; Honeycrisp 80s and 88s were $42.95 to $54.95; Granny Smith 80s were $22 to $27 and 88s were $20 to $27; Fuji 80s were $18 to $24 and 88s were $16 to $22; Golden Delicious premium grade 80s were $27 to $32 and 88s were $25 to $30.

O’Rourke said a concern is that the Biden administration is continuing the Trump administration’s trade policies, which along with higher prices hinders exports.

Apples from Poland and Turkey are becoming greater competition to Washington apples in the Middle East, which are down 58%, he said.

Season-to-date exports are 15.8 million boxes, down 20% from 19.8 million a year ago.

Exports to Mexico are down 11% from 4.5 million a year ago to 4 million. China is down 10% from 437,000 to 394,000. India is down 64.4% from 1 million to 382,000. Vietnam is up 10.5% from 1.5 million to 1.7 million.