How apple growers are regaining control of the supply chain from retailers
Apples are one of the world’s most popular fruits. In 2013 world production reached almost 82 million tonnes and the export value broke US$8 billion (FAO STAT, 2017). The fruit comes in all shapes, sizes, flavours and colours; yet what we see in the supermarkets is a mere snapshot of the diversity that exists. The apple market is predominately controlled by retailers who demand strict uniformity in both colour and size of apples from growers, who are encouraged to produce commercial varieties on a large scale, which are then sold on to consumers at low cost.
Last week, I gained some insight into how growers are starting to regain some control of the apple supply chain. I attended a seminar by Dr Katharine Legun, a social scientist from the University of Otaga, New Zealand, titled “Plants, Power and Social Change for Sustainable Food Futures”. She was speaking about how growers have started using plant patents and co-operative licensing to maintain varietal aesthetic diversity giving them greater power to negotiate relationships with retailers.
Club apples and co-operatives
Within the apple supply chain these changing dynamics are focused around so called "club apples". These are varieties that have a patent that is licensed to a set number of growers that are often members of a co-operative; the growers have to pay for the privilege of growing the fruit but reap the benefits of producing and marketing a unique apple that consumers are often willing to pay more for. Some examples include the JazzTM apple, originating in New Zealand and now grown by selected growers in the UK, Europe, USA, Chile, South Africa and Australia. The ‘Honeycrisp’ was the first club apple produced, a product of the apple breeding programme of the University of Minnesota that is now grown worldwide. The Pink Lady®, popular in UK supermarkets, is another club variety.
Problems with the old retail model and advantages of the new
Club apples can be seen as a response to the stringent cosmetic standards imposed on the grower and the dominance of the retail sector on the supply chain. When conducting interviews as part of her research Katherine heard how growers did not want to grow “commodity crops” anymore. Here, I am talking about the free varieties which have no licence and can be grown by anyone; these are the apples which dominate our supermarket, examples include ‘Gala’, ‘Braeburn’, ‘Fuji’, and ‘Golden Delicious’. To gain a good profit from these commercial varieties growers need to produce huge quantities, largely to meet the stringent aesthetic standards set by the retailers. Before packing, apples will be weighed and scanned to measure redness – a desirable character - and then given a grade. Those of lower grades are sold at lower costs in the supermarkets creating an incentive to produce apples with an increasingly uniform appearance. This drive to commodity status leads to intense competition between growers to achieve the perfect fruit, and furthermore is environmentally damaging – high inputs of chemicals and water are need to get the desired aesthetic. Inevitably, the system becomes unprofitable for the grower.
Being part of a co-operative and growing club apple varieties can help turn the current system on its head. Firstly, co-operatives don’t adhere to the strict aesthetic standards set by the retailers. Retailers have to take the fruit from the grower as is, and no mechanisms for grading are in place. Instead of focusing on a single apple variety and producing vast quantities of a uniform crop as for commodity crops, the grower can instead concentrate on a greater spread of varieties. The new system is also more environmentally sustainable as there will be less need for pesticides and other inputs because the push for the ‘perfect’ crop is reduced. Secondly, members of the co-operative can talk directly with the retailer negotiating higher prices and setting forward contracts for a number of years. Traditionally, the retailer could switch growers when they liked with no forewarning. Furthermore, the retailer cannot try and shortcut the system by bringing in the club varieties from abroad for lower costs, they have to go directly to the co-operative in their country if they want to stock a club variety. Thirdly, the new system can help the endurance of medium sized farms which traditionally could not compete with large farms for producing commodity crops on the scales required by retailers. Within the co-operative system these medium sized farms can set the prices and act as the go-to place for these more specialist club varieties.
Outside the grower/retailer relationship being part of a co-operative also promotes information sharing between growers – for example on pest and disease control, or recommending new varieties - further promoting sustainability of the system.
This new system is no-longer unique to apples. Similar changes are occurring in other commodities including: hops – fuelled by the craft beer resurgence, citrus and tomatoes.
These shifting dynamics of food production I feel, gives the grower the economic returns they deserve. Furthermore, it works to promote and grow diversity within our cropping systems as production of new varieties in co-operatives is far more prolific than in commercial systems (Egger, 2008). This diversity is important in the resilience of our food systems against climate change. Club apples and the associated co-operatives provide an excellent model of how we can build more sustainable food systems for the future.
Further reading
Legun K, 2015. Club apples: A biology of markets built on the social life of variety. Economy and Society, 44: 293-315
Legun K, 2016. Ever redder apples: How aesthetics shape the biology of markets. In: Le Heron R, Campbell H, Lewis N, Carolan N (eds.) Biological Economies: Enactive and post-human approaches to agriculture and food. London: Routledge, 274 pp.
Legun K, 2015. Tiny trees for trendy produce: dwarfing technologies as assemblage actors in orchard economies. Geoforum, 65: 314-322.
Egger S, 2008. New apple varieties – in the slip stream of club varieties. Obst-und Weinbau, 144: 12-14.
Belmans K, 2003. Free varieties, protected varieties, “club” varieties: differences and implications for orchardists. Fruit Belge, 71: 87-100.
A good intervention that will also guarantee growers a good price for their produce
Posted by: Patrick Karuu | June 28, 2017 at 12:57 PM