VIP Val Venosta has expressed cautious optimism for the outlook for the second half of the season, noting that its destocking plan is proceeding in line with sales expectations.
But as the geopolitical situation worsens, the Italian apple cooperative warned that producers must not be left to shoulder the burden of rising production costs alone.
On 1 March, apple stocks were running at around 60 per cent of the 340,000 tonnes harvested in autumn 2021, which included almost 50,000 tonnes of organic apples.
The cooperative said spring would be the most interesting months in terms of trade. In Italy sales are traditionally high until the arrival of the first summer fruit, while in the rest of Europe, local production is running out and retailers are ready to welcome Val Venosta apples onto their shelves.
Sales manager Fabio Zanesco, and organic product manager Gerhard Eberhöfer said they were certain that they would be able to meet national and international demand until the arrival of the 2022 harvest.
'We are facing a situation of substantial balance for medium/large sizes and for higher quality profiles; here the demand is good, and we are hoping to serve the market with continuity,” said Zanesco.
“Moreover, the logistical difficulties in managing containers arriving from the Southern Hemisphere, related to the increase in freight rates and the uncertainty of transit time, play partly to our advantage, leading the market to favour European apples.
“So, the same situation that makes our extra-EU exports difficult has opened up, on the other side of the coin, some interesting opportunities that we absolutely must seize”.
However, Zanesco pointed out that the situation is more complex for medium and smaller sizes or lower quality products, mainly –but not exclusively – Golden and Red Delicious, for which there is an overproduction in Europe, with commercial channels now almost saturated.
“The European countries that value this type of product are limited, and outside these channels it is very difficult to find a place,” he said.
“Depending on the area and the varieties, the percentage of this type of product on the total can be significant, which will certainly have a negative impact on the final result for the producer.”
On the issue of profitability and rising production costs, Zanesco commented: “It is not my direct responsibility since I am in charge of sales. But it is a problem that we, as salespeople, struggle with on a daily basis.
“The pressure on the production chain is strong, in terms of energy, packaging, logistics and labour costs, and it will not be possible for producers to shoulder such a shock alone.
“I understand that retailers have to deal with a consumer who is frightened by the inflationary pressure of recent times and the economic crisis, but without a joint solution, which will necessarily have to pass through the value chain part of these costs, production cannot support itself.”
Returning to the more commercial aspects, the cooperative said Golden and Red Delicious are the varieties that are suffering the most from sluggish demand, even in the organics category.
“In general, VIP's target market is 60 per cent domestic, more than 30 per cent European and about 10 per cent extra-EU,” Eberhöfer noted.
“In the case of organic apples, Italy represents only 25 per cent of the total, while the majority of apples are sold on foreign markets, where Golden is less in demand.
“And in a season like the present one, characterised by a record harvest of this variety, this is a signal not to be underestimated.
“For red apples, on the other hand, the prospects are better, not least because of the low production in Germany, which has decreased by around 13 per cent this year, leaving open interesting commercial spaces.”
Zanesco added: “If we look at the market as a whole, I am convinced that the time has come to remove from sale and to process goods that do not guarantee excellent taste experiences and therefore do not meet certain organoleptic parameters, in terms of consistency or brix degree.“
He said the segmentation of the market should take place not only by variety but also by effective quality. “The selection of the second choice, on the other hand, should only be made on the basis of aesthetic defects, thus satisfying all price levels, and bringing the concept of 'ugly but good' back to the fore also in the conventional industry; the apple is a democratic product with wide penetration among Italian families. We can and must have a good apple for everyone, in all price segments.
“Obviously only at the table with the main producers and partners in national distribution it is possible to think about this approach, but I hope it will soon be a shared input. To those who say that quality is determined by the management and storage status of the apple throughout the supply chain, I reply: let's make sure we get off to a good start!”
Eberhöfer added that in future, the cooperative would have to adjust its portfolio of varieties according to market demand, taking into account that the European Farm to Fork and Biostrategy strategies push more and more competing areas to organic production.
“This confronts us with a further challenge, that is to support the growth in consumption of organic apples. It is on this challenge that it is essential for us to maintain and consolidate our leadership at national and European level,” he said.