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Building an apple value chain, potato-style

Ron Gerold, with Agriculture and Agri-Food Canada’s (AAFC) sector development and analysis directorate, believes Canada’s apple-growing community can learn something from the nation’s potato growers.

Ron Gerold, with Agriculture and Agri-Food Canada’s (AAFC) sector development and analysis directorate, believes Canada’s apple-growing community can learn something from the nation’s potato growers.

He told the apple working group of the Canadian Horticultural Council (CHC), which met this past summer in Greenwich, N.S., that the federal government is willing to help growers enhance their apple value chain.

According to Gerold, the AAFC arranged a meeting between potato producers and retailers in the spring of 2011 to establish a potato working group composed of the Canadian Potato Council, Costco, Sobeys, and Loblaws. The working group’s mandate is to identify and address challenges and steps to improve the value chain for potatoes through better communications and increased competitiveness.

He said the new potato working group identified three opportunities: increasing the effectiveness of value chain communications, increasing the availability of information on markets and consumers, and influencing governmental policies and legislative changes.

Gerold believes what the potato working group has already done has potential for other commodities, including apples, and says the AAFC has a new domestic branding initiative that has a mandate to spend $3-million over the next three years.

A subcommittee has already been set up within the potato working group, he said, to develop options for growers, share insights on consumers, host field days, promote market information sharing, and to develop positions on and proposed modifications to grading regulations and health legislation. The next step, Gerold continued, will be to include other major retailers in the potato working group, develop an action plan for the working group’s priorities and hire a co-ordinator to tackle them.

He proposed a forum be established for collaboration among apple growers, marketers and retailers that could help build stronger relationship among the value chain stakeholders and promote fresh apple consumption.

Joe Sardinha, chairman of the CHC’s apple working group, said he has observed a trend among retailers to buy only four to five sizes of apples, leaving growers with edible apples they cannot market.

“It would be interesting to sit down with the retailers’ representatives and ask [if] this trend’s going to continue,” said Sardinha, an apple grower in British Columbia’s Okanagan Valley.

“What is irritating [is] New Zealand grows a lot of small apples and they end up here.”

Andrew Bishop, a Greenwich, N.S., grower, felt the growers needed the perspective of the packers. He also noted the CHC is working with the George Morris Centre to determine why consumers buy what they do.

Sardinha said he believes that by collaborating with retailers and getting “consumers on-side, you can generate your profits in the domestic market.”

Bishop said that consumers ultimately drive retailers.

“What people buy at my farm market is what I must produce in my orchard,” he said, adding that stagnant consumption can quickly be changed by “producing the varieties consumers want to buy.”

While the CHC apple working group showed interest in value chain enhancement, Sardinha wondered how the group should move forward.

Gerold speculated that AAFC could facilitate a meeting between the apple producers and the retailers as it did for the potato industry, possibly by early 2012.

“Your concern is why aren’t they buying our apples?” he said. “The retailers’ concern is why are they not growing what we are asking for?”

Major retailers are buying imported apples in bulk, un-graded, unpolished and un-inspected for food safety, said Sardinha.

“This has to change,” he said. “Pressure has to be put on these suppliers to level the playing field in the stores.

“The two big segments we want to target are those that are interested in buy local and those that want top-notch quality with a Canadian label on it,” he said.

Sardinha suggested the group conduct a “scoping exercise” at their next meeting “to get the ball rolling,” with hopes they can meet with retailers after March.