With a smaller national apple crop it has been no surprise that retail volume has declined from record levels set last season. However, an analysis conducted by CMI Cat Stats is revealing secrets select retail chains use to drive apple category increases.
The latest supermarket data on apple category performance for the season from September through November 21 shows that U.S. apple volume sold declined by 5.4%. Retail sales declined 2.2% with the average retail price moving up 3.4% to $1.56.
According to Steve Lutz, Vice President of Marketing for CMI, the hidden story in the scan data are the strategies leading retailers are using to drive sales and volume despite the shorter crop.
He reports that an analysis by CMI is showing that best in class retailers are using very similar approaches to raise performance apple performance and beat back competition.
“We know best in class retailers use different category strategies,” said Lutz. “But what they really do well is understand how the opportunities shift as we transition from the fall/holiday season into the winter months of the first quarter.”
Lutz says the opportunity for retailers during Q1 is that changing supply conditions require supermarkets to rethink their category opportunities. He says that between the fall and the first quarter of the year, the average U.S. supermarket loses over 250 pounds of volume and over 350 dollars per store per week in apple sales—dollars that best in class retailers capture.
The CMI Cat Stat study confirms that in the first quarter of the year, the two highest selling apple varieties—Gala and Honeycrisp--decline in performance as supplies diminish. Best in class retailers are aggressive in expanding sales efforts beyond these two primary subcategories to newer products to lift the declining sales base.
“Best in class retailers use the winter months to introduce new varieties and branded apples to consumers,” said Lutz. “This timing is perfect because most of the low-priced “hot” apple deals that occur at harvest are gone so top retailers seize these winter months to accelerate sales and build stronger displays of hot new branded apples like Ambrosia™, KIKU®, Kanzi® and others.”
Lutz cited Nielsen data showing that among five best-selling branded apples, best in class retailers drive more than twice the ACV dollars as low performing retailers.
Lutz concluded that basic apple category performance “starts with mainline apples like Gala, Fuji Honeycrisp, Reds and Grannies.” But he added, “The incremental sales opportunity is to offset the traditional seasonal sales declines by introducing consumers to new tastes and flavor profiles.”
