The New England Apple production has been at a steady decline over the past three decades. This can be attributed to several important factors. First, we shall take a look at the global market. China is far surpassed the United States in apple production, and is currently on a steady incline of production since the turn of the century. Now, looking solely at US apple production, we can see that the market has been on the rise. However, this is mostly attributed to production in the state of Washington since the New England states only account for about 1. 6% of the nation’s apples.
Based on this information, there is an obvious and dire need to revive the New England apple industry in order to increase grower profitability and recapture the market using new and innovative ideas. One such possibility could be in the form of sliced apples, which has spiked in popularity since the technology to perform such a feat introduced itself in the 1990’s (Lee, Weber). Our goal is to reach a feasible solution that will invigorate apple production and put New England apples on track to recapture a sizable market share in today’s changing economy. Background and Central Problem
New England has quite a long and seasoned tradition when it comes to apple growing. In 1982, some 1,691 farms produced apples on 29,943 acres—an average size of 17. 7 acres of apples per farm. By 2007, while the farm count had only declined to 1,514 farms, the acreage devoted to apples fell to 15,286—10. 1 acres per farm (Lee, Weber). Based on this information, one can see that the number and acres of farms in this area are decreasing. This is an issue that is well known to the New England Apple Association and its executive director, Russell Powell. There are a couple of key problems that particularly need to be addressed.
One of these is associated with competition. New England’s competitors are dominating the apple market, both domestically and internationally. This will undoubtedly cause New England apples to increasingly lose market share if nothing is done. Another problem is when we look at options to create sliced apples. Currently, there are very few facilities available that are within sufficient range of their orchards. The New England Apple Association must find a way to establish a trade connection with these facilities or come up with different ways to slice their apple in order to tap into the sliced apple market.
- SWOT and Industry Analysis
- Strengths
- Long tradition in New England
- Strong attraction for Local Foods
- Weaknesses
- Labor Force
- Processing and Packaging
- Opportunities
- Sliced apple market
- Growing fast food demand for fruit snacks
- Threats
- International and Domestic competition
- Adequate Supply
The strengths of New England Apples are embedded in the roots of culture. It is a long running tradition that is exemplified through the persona of Johnny Appleseed. People take pride in what they believe in, and both producers and consumers will be affected by this calling to stick with tradition. It is also shown in the pride of buying and selling locally owned produce. There will always be a strong attraction towards local produce since it benefits everyone involved at such an intimate level. The weaknesses of the industry are apparent at the production level.
Labor is a key issue when it comes to apple orchards. One such scenario arises when it comes to the harvesting phase of production. Orchards are much more efficient with hired labor, but one cannot deny the need and attraction for “Self-Pick” orchards. What is gained from one option is also lost in the other. Either option, or even a perfect mixture of the two, becomes a daunting challenge that must be dealt with. Another weakness is apparent directly following the harvesting phase.
The growers may either pay a processor to properly grade, clean, sort, store, and sell their produce, or choose too take on this challenge by themselves. Either choice has positive and negative consequences, but an overall weakness nonetheless. There are great opportunities that lie in wait for New England Apples. The processed apple slices aforementioned is a great example of this. The market is poised and ready for such a transition. The demand for sliced apples has increased dramatically due mostly to a push for healthier snack alternatives that are being pursued by large fast food companies.
These companies, in order to be more appealing to the average family-oriented consumer, will most likely continue to demand fresh fruit snacks. These of course would be in the convenient form of processed, bite-sized fruit portions that are individually packaged. However, the bargaining power of both buyers and suppliers will determine the outcome of where the apples go. Also, if the price of apples gets too high, there could be the possibility of substitute products such as pears, bananas, oranges, etc. (Porter)
Threats imposed upon this industry are constantly growing…literally. Although threat of new entrants is not very high, rivalry among existing competition with both international and domestic producers has resulted in quite a large deficit in New England apple production (Porter). These competitors can do the same job faster and cheaper making options quite slim for the growers faced with this challenge. Even if the growers surmount this obstacle, they then must face the ever-threatening adverse growing conditions.
Supply is never guaranteed once weather, disease, insects, and labor are all factored in. Farmers are constantly gambling with nature every growing season, and this must be taken into consideration. Goals and Business Values The U. S Apple Association estimated that for the 2011-2012 crop year, sliced apples would use 123 million pounds of apples—1. 3% of the total U. S. apple crop—up from 54 million pounds in 2005 (Lee, Weber). The New England Apple Association wishes to tap into this by converting their apples into slices using the most efficient method.
In doing so, they must also respect the practices and choices of all parties involved, including the farmer, the packers, the wholesalers, and the slicing manufacturers. So, their ultimate goal is to increase their market share by possibly producing sliced apples while also conforming to the best possible partnerships all the way down to the consumer. Business Constraints The constraints that the New England Apple Association faces include monetary resources and the actual supply of apples. In order to build any new facilities or to have convenient shipping and handling, money must be taken into account.
Only those things that can be afforded can actually be undertaken. Now if and when these slicing facilities become available, there is the issue of apple supply. In order to maintain steady operation, deals must be made with producers, packers, and wholesalers alike so that a constant supply can be achieved. On the topic of wholesalers, this could also be another constraint with regards to the locations and capacity of the 8 available wholesalers in the New England area (newenglandapples. org). Solutions and Alternatives
Here will be discussed several solutions that could help to rectify the problem at hand faced by Russell Powell and the New England Apple Association. One solution is to use existing sliced apple businesses to provide an outlet for New England apples. This will herald low costs, a somewhat convenient solution, a low number of facilities, stipulation on growers, and a possible surplus. A second solution or alternative would be to build new apple slicing facilities to provide an outlet for New England apples. This comes with the following: high costs, extreme convenience, stipulations on growers, and another opportunity for surplus.
A third option would be to establish a co-op that includes both new local apple slicing facilities and growers. This also would be costly and labor intensive, though extremely convenient and effective in establishing collaboration between growers and processors. A fourth solution would be to establish a co-op that includes new local retail/wholesalers, new apple slicing facilities, and growers. This is yet another costly solution with intense increase in labor, but it is also very convenient and comes with collaboration all the way to the customer.
The fifth would be to leave the New England Apple market alone. This comes with no cost at all, and allows private parties to take necessary actions, if any at all. All of these possibilities, except for the last, incorporate the use of sliced apples to spark interest back into New England apple industry. Each alternative differs in overall cost and convenience to all associated parties. The last option to leave the market alone assumes that nothing within reason can be done and to leave any decisions up to private parties that would take up responsibility for them.
Recommendation and Implementation After careful analysis of all possible alternatives listed above, the recommended course of action should be to establish a Co-op in the New England area that includes new apple slicing facilities while providing necessary services to the growers as well. This option has the most balance of cost efficiency and productivity. This will allow growers the exact type of outlet they require for their product while also allowing the cutting facility to work with the farmers in perfect harmony.
Working together, they can cover more financially and find ways to collaborate and save even more on costs using predefined methods of stacking, packing, transportation, specialized equipment, and utmost quality that will sit perfectly with all involved. This solution is the best option taking both cost and convenience into account. In order to implement this strategy, the New England Apple Association must first build the slicing facilities in the most convenient areas in New England.
This would be the most expensive part of this option, but one can think of this in terms of fixed costs. Over time, fixed costs are negated as more money is made. Next, they would have to establish a Co-op that includes producers, packers, and slicing facilities. From that point, all that is left is to ship the finished product to the appropriate wholesaler in the New England area. With this solution, the New England Apple Association should be able to revive the New England apple industry and also safely secure a position in the desirable sliced apple market.
These companies, in order to be more appealing to the average family-oriented consumer, will most likely continue to demand fresh fruit snacks. These of course would be in the convenient form of processed, bite-sized fruit portions that are individually packaged. However, the bargaining power of both buyers and suppliers will determine the outcome of where the apples go. Also, if the price of apples gets too high, there could be the possibility of substitute products such as pears, bananas, oranges, etc. (Porter)
Threats imposed upon this industry are constantly growing…literally. Although threat of new entrants is not very high, rivalry among existing competition with both international and domestic producers has resulted in quite a large deficit in New England apple production (Porter). These competitors can do the same job faster and cheaper making options quite slim for the growers faced with this challenge. Even if the growers surmount this obstacle, they then must face the ever-threatening adverse growing conditions.
Supply is never guaranteed once weather, disease, insects, and labor are all factored in. Farmers are constantly gambling with nature every growing season, and this must be taken into consideration. Goals and Business Values The U. S Apple Association estimated that for the 2011-2012 crop year, sliced apples would use 123 million pounds of apples—1. 3% of the total U. S. apple crop—up from 54 million pounds in 2005 (Lee, Weber). The New England Apple Association wishes to tap into this by converting their apples into slices using the most efficient method.
In doing so, they must also respect the practices and choices of all parties involved, including the farmer, the packers, the wholesalers, and the slicing manufacturers. So, their ultimate goal is to increase their market share by possibly producing sliced apples while also conforming to the best possible partnerships all the way down to the consumer. Business Constraints The constraints that the New England Apple Association faces include monetary resources and the actual supply of apples. In order to build any new facilities or to have convenient shipping and handling, money must be taken into account.
Only those things that can be afforded can actually be undertaken. Now if and when these slicing facilities become available, there is the issue of apple supply. In order to maintain steady operation, deals must be made with producers, packers, and wholesalers alike so that a constant supply can be achieved. On the topic of wholesalers, this could also be another constraint with regards to the locations and capacity of the 8 available wholesalers in the New England area (newenglandapples. org). Solutions and Alternatives
Here will be discussed several solutions that could help to rectify the problem at hand faced by Russell Powell and the New England Apple Association. One solution is to use existing sliced apple businesses to provide an outlet for New England apples. This will herald low costs, a somewhat convenient solution, a low number of facilities, stipulation on growers, and a possible surplus. A second solution or alternative would be to build new apple slicing facilities to provide an outlet for New England apples. This comes with the following: high costs, extreme convenience, stipulations on growers, and another opportunity for surplus.
A third option would be to establish a co-op that includes both new local apple slicing facilities and growers. This also would be costly and labor intensive, though extremely convenient and effective in establishing collaboration between growers and processors. A fourth solution would be to establish a co-op that includes new local retail/wholesalers, new apple slicing facilities, and growers. This is yet another costly solution with intense increase in labor, but it is also very convenient and comes with collaboration all the way to the customer.
The fifth would be to leave the New England Apple market alone. This comes with no cost at all, and allows private parties to take necessary actions, if any at all. All of these possibilities, except for the last, incorporate the use of sliced apples to spark interest back into New England apple industry. Each alternative differs in overall cost and convenience to all associated parties. The last option to leave the market alone assumes that nothing within reason can be done and to leave any decisions up to private parties that would take up responsibility for them.
Recommendation and Implementation After careful analysis of all possible alternatives listed above, the recommended course of action should be to establish a Co-op in the New England area that includes new apple slicing facilities while providing necessary services to the growers as well. This option has the most balance of cost efficiency and productivity. This will allow growers the exact type of outlet they require for their product while also allowing the cutting facility to work with the farmers in perfect harmony.
Working together, they can cover more financially and find ways to collaborate and save even more on costs using predefined methods of stacking, packing, transportation, specialized equipment, and utmost quality that will sit perfectly with all involved. This solution is the best option taking both cost and convenience into account. In order to implement this strategy, the New England Apple Association must first build the slicing facilities in the most convenient areas in New England.
This would be the most expensive part of this option, but one can think of this in terms of fixed costs. Over time, fixed costs are negated as more money is made. Next, they would have to establish a Co-op that includes producers, packers, and slicing facilities. From that point, all that is left is to ship the finished product to the appropriate wholesaler in the New England area. With this solution, the New England Apple Association should be able to revive the New England apple industry and also safely secure a position in the desirable sliced apple market.
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