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September, 1998

Washington apple growers pass assessment for promotion

By Matt McCallum

Washington state apple growers recently voted to increase their assessment 60%, giving them an additional $22.5 million for a year-round consumer advertising program.

The new campaign could benefit other apple regions as well, said Roger Kropf, CEO of Kropf Fruit Company in Belding, Mich.

“It’s being earmarked for generic advertising and even though it appears that it is putting more money into a competitive system, in reality it will increase apple consumption. If that’s the case it can do nothing but help and we will get to tailgate off of it,” he said. “From my understanding it’s not earmarked for retailers, but to create another white mustache. I wish we were doing this as a national promotion, but sometimes Washington thinks they are the only ones in the apple business.”

Under the new plan growers’ assessments to the Washington State Apple Commission will rise from 25 cents to 40 cents a box - the first increase in 12 years. The new rate will remain in effect for three years, after which growers will vote on whether to keep it. More than half of this year’s $40-million budget will be used for promotion. Before the increase the commission only planned to spend $7 million on consumer advertising.

The assessment barely passed, with 54.5% of growers voting yes, representing 52.9% of the acreage. A simple majority was required to pass.

Washington state growers are facing a record crop of 145 million bushels and for the first time will pack more than 100 million boxes for the fresh market. Low apple prices due to a significant carryover of 1997 apple crop at the start of the season, slower export trade to Asia because of its financial crisis, Mexico’s dumping claim that shut that market off until recently and cheap Chinese concentrate that is depressing processing prices have pushed more apples onto the domestic market and depressed prices. The Washington State Apple Commission saw the assessment increase as the main way to try and increase U.S. apple consumption - which has hovered at 18 to 20 pounds for the past decade - because the export market is so weak.

“We had to go to the growers with this request,” said Ed Kershaw, the commission’s chairman. “It’s all about competing with every other item in the grocery store, the convenience store or McDonald’s. All of our competition is doing it and they think it works.”

With the new promotion money the commission hopes to reach 40% of the U.S. population with a year-round message to eat more apples on radio, TV, billboards and other forms of advertising. The TV ads could start as early as mid-October.

The commission spent $225,000 on a research project to help its ad agency come up with a new and compelling consumer message to be featured in advertising starting in the new year.

Washington state produces more than 50% of all U.S. apples, but has hit a plateau domestically, shipping about 60 million boxes a year. With the new advertising blitz, the commission hopes to lift demand by 9 to 18 million boxes.