02 Barritt

Y. Change did not understand, so his cousin explained:“From the consumers’viewpoint, eating
the best Delicious isn’t as good as the eating experience of a Fuji or Gala.”

Getting defensive, Y. Change said, “Yes, but our Delicious look the best in the supermarket.”

His cousin, by now quite frustrated, said, “Being the best at producing a product and having the
most attractive product does not mean the product is in demand.” He continued, “Just ask IBM
about its mainframe computers. IBM did produce the best mainframe computers but customers
were asking for networks of powerful PCs.”

Y. Change reflected for a moment and reluctantly said, “You have a point there, cuz, maybe I
should plant Gala.” He paused and, with a grin, said, “Mrs. Y. Change asked me to bring some
apples home, but specified any variety but Delicious!”

Fruit Qualityand the Consumer
Orchardists in Washington are paid on the basis of fruit size and color with higher returns for the
largest and reddest apples.Does this reward structure ensure that the consumer receives fruit of
the highest quality?Does this emphasis on external appearance influence what the consumer
really wants, high internal quality?The emphasis on red color and size does influence internal
quality.Clearly, it reduces internal quality.By waiting for red color development, fruit is often
overmature when harvested.Out of storage the largest apples usually have the lowest firmness.
By changing to early and high coloring strains to achieve high packouts, immature fruit is often
harvested.In addition, many believe the highly colored strains planted today to improve
packouts have inferior quality.Is red color really so important if striving for it reduces fruit
quality?

Would it not be sensible to reward growers for the fruit characteristics that create consumer
demand?To match product quality with consumer preferences would require paying a premium
to growers for internal quality factors such as crispness, juiciness, soluble solids and flavor.
Remember, consumers may buy with their eyes, but qualitymakes them a repeat customer.
Consumers are also willing to pay higher prices for high quality products.

Focus on Change
Short-term thinkingis easy.You give it very little thought and plant old varieties that you are
comfortable with or varieties that others have introduced.Long-term solutionsare more
difficult.Inventing and producing a new product takes time and is challenging.However, the
rewards, particularly with the promotion of a new product, can be outstanding.

We must move from theedge of disaster, where some think the Washington apple industry is
today, to thecutting edge.This means eliminating as quickly as possible obsolete varieties and
inventing and producing new, unique products.

We often strive to be competitive by growing varieties that other countries or states introduce and
produce.We are followers.We planted Fuji, Gala and Braeburn because the New Zealand apple
industry produced them and, by promoting the new varieties, developed a market.To be
competitiveshould not be our goal, it should be toeliminate competition.You eliminate
competition by producing something else, something new.Introducing and producing something
new, as the New Zealand apple industry has done, eliminated early competition and, as a result,

they received a significant price premium.If being competitive is the goal, mediocre to
declining prices will be the best you will receive.

We canreact to changeby following others, planting their varieties, and accepting average
prices, or we caninitiate changeby inventing new products and raising prices.

Is it wise to promote an obsolete variety?Should the Washington apple industry, through the
Washington Apple Commission, be promoting Delicious?Is it prudent to promote a product
with less and less value?We must ask if thischeerleaderapproach is effective at improving
value for the producer of obsolete varieties.On the other hand, thevisionaryapproach would be
to promote new products with the opportunity to improve product value.The New Zealand
apple industry created markets for its new varieties through promotion.

Many orchardists in Washington recognized the problems of producing too many Delicious
apples after the crisis years of 1987-89.The questions asked at the time were, was the problem
of low prices due to overproduction, undermarketing or consumer dissatisfaction with the
product?It was generally thought (incorrectly, as we know now) that overproduction was the
culprit.

Some Delicious acreage in Washington was removed and replanted to new varieties.New
varieties were also planted on new land.The rapid rise in the ’90s of Fuji and Gala production
was the result (Figure 3).However, production of Delicious has not declined in the decade since
the crisis.In fact, it has increased by over 10% even though, as a percentage of total production
of all varieties, it has declined (Figure 4).The problem did not go away and has resurfaced in the
late ’90s.Perhaps this time we will recognize the problem for what it is, a product that is
obsolete.The current crisis will certainly result in the removal of older Delicious orchards.
However, because of the high productivity of newer Delicious orchards, Delicious production
may not decline in the next decade.

Orchardists who built change into their businesses after the 1987-89 crisis are today in a much
better position to survive the crisis of the late ’90s than growers who accepted the status quo a
decade ago.The future of any apple industry depends on accepting that change is inevitable, that
it will occur at a faster and faster pace, and that building change into our industry is the only
avenue to survival and prosperity.

For an interesting look at change with technology products, I encourage you to read
Technotrendsby Daniel Burrus (1993, HarperBusiness).Although the principles of change are
discussed for technology products, they apply to products in all industries, even the apple
industries and our products, apple varieties.

In summary, successful orchardists build change into their businesses.Replacing old varieties
with new ones and modernizing management practices are necessary ways growers must change.
Successful industries also change.The reason to change is to meet consumer needs.Industries
can hike prices if they reinvent their products.Industries which have increasing value in their
products prosper.Industries must continually invent new products or they will certainly fail as
others pass them with new products.An industry which embraces the invention of new products
is an industry that makes change its friend.