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CapitalPress.com
December 11, 2015
Apple marketers look for more shelf space
By DAN WHEAT
Capital Press
YAKIMA, Wash. — More
product diversity within al-
most every supermarket cat-
egory is making the compe-
tition for shelf space more
keen, a leading market analyst
told leaders of the Washington
apple industry on Dec. 7.
That means new apple
varieties will continue to eat
into the shelf space of older
varieties unless retailers are
able to increase their income
from the space devoted to ap-
ples and then increase it, Steve
Lutz, vice president of Colum-
bia Marketing International,
Wenatchee, said at the Wash-
ington State Tree Fruit Associ-
ation annual meeting.
That
happens,
Lutz
said, when retailers display
well-packaged, newer vari-
eties more prominently than
older varieties offered at lower
prices.
Lutz said he surveyed the
top 15 and the bottom 15 re-
tailers in apple sales last year
when Washington’s largest ap-
ple crop in history was being
marketed. He found those that
promoted more popular, high-
er-priced varieties sold more
apples. Those cutting prices
lost money and volume, he
said.
Lutz founded The Perish-
ables Group, now Nielsen
Perishables Group, a category
Dan Wheat/Capital Press
Jeff Cleveringa, head of research and development of Oneonta Starr Ranch Growers in Wenatchee, holds a Lady in Red apple as he
talks with Ken Adams, president of Willow Drive Nursery in Ephrata, at the Washington State Tree Fruit Association annual meeting in
Yakima on Dec. 7. Cosmic Crisp, Chelan Spur and Royal Red Honeycrisp are also on display.
management firm in Chicago,
following his tenure as presi-
dent of the Washington Apple
Commission. He sold The Per-
ishables Group to Nielsen and
joined CMI a few years ago.
Promoting cheap apples is
a “self-defeating strategy and
waste of space,” Lutz said.
An assortment of 37 unique
apples was sold last October
through April and some of
those are also available as or-
ganic, he said.
During a panel discussion
of top marketers that followed
Lutz, Mike Taylor, vice presi-
dent of sales and marketing at
Stemilt Growers, Wenatchee,
said he thinks retail space for
apples will grow, but slowly.
Apples will continue to
benefit from the trend to-
ward healthy eating but it’ll
take time, said Randy Ab-
hold, vice president of sales
and marketing at Rainier
Fruit Co. in Selah.
Mac Riggan, director of
marketing at Chelan Fresh
Marketing, said young people
are looking at what’s in their
food and will choose Honey-
crisp apples at $2.99 per pound
over Red Delicious at 99 cents.
“Organics are taking off.
Last year (amid a huge crop
and poor prices) organics had a
halo effect. People are paying
extra for new brands like Jazz
or Envy, and for organics,”
Riggan said.
Robert Kershaw, president
of Domex Superfresh Grow-
ers in Yakima, said getting
the right price for larger ap-
ple crops is like breaking the
four-minute mile. Once it’s
broken others have more con-
fidence to do it, he said.
Abhold said consumers are
hungry for new, exciting vari-
eties that are consistent and eat
well.
The marketers said com-
panies market individual vari-
eties they manage better sep-
arately than collectively, but
that they’ll work collectively
on the new Cosmic Crisp that
will be planted in 2017 and
thereafter.
Riggan said when he sees
expensive cars in other coun-
tries, he’s not as worried about
how many apples they can’t
buy as how many they can.
The opportunity in exports, he
said, is like “another popula-
tion the size of our country.”
Mexico is buying as many
Gala as they did Red Deli-
cious and paying more for
them, Abhold said. “That’s a
huge evolution.”
Taylor also said H-2A-visa
guestworkers are the answer
for labor shortages until great-
er mechanization is perfected.
Feds cite longshoremen for unfair labor practices
Mateusz Perkowski/Capital Press File
Cargo containers are shown being loaded on ships at the Port of
Portland in this file photo. A federal agency has twice faulted the
longshoremen’s union for unfair labor practices at the port.
union should “accept the va-
lidity” of the ruling and agree
to restore productivity at the
container terminal.
While the terminal oper-
ator has prevailed in these
NLRB disputes, using these
legal victories to actually
bring ocean carriers back to
Portland is a more complicat-
ed matter, experts say.
That’s because the NLRB
has ruled that ILWU cannot
engage in work slowdowns,
but there’s currently almost
no work with which to inter-
fere at the container terminal.
“This is a very unusual
scenario when it raises the
point of enforcing the law,”
said Michael LeRoy, a law
professor specializing in labor
relations at the University of
Illinois.
For ICTSI, the NLRB rul-
ings are more likely to serve as
bargaining chips in its overall
negotiations with the long-
shoremen’s union, LeRoy said.
The union, the port and the
container terminal are also en-
gaged in other litigation in fed-
eral court.
It’s possible that ICTSI
will use legal victories as part
of a public “tit for tat” with
the longshoremen’s union but
later “wipe the slate clean” so
the terminal can again become
operational, LeRoy said.
Terminal operators have
not traditionally enforced
such NLRB rulings to win
monetary awards due to fear
of creating “lifelong ill will”
with the longshoremen’s
union, said Jim Tessier, a la-
bor relations consultant and
former employee of the Pa-
cific Maritime Association,
which represents terminals.
“They use it as a negotiat-
ing tool,” he said.
ICTSI would be wiser
to drop the case against the
union as a show of good faith
rather than press for penal-
ties, Tessier said. “That would
mean the kiss of death for that
company, in my humble opin-
ion.”
Ocean carriers won’t re-
turn to the port unless they’re
convinced the union and ter-
minal operator have recon-
ciled, he said.
House passes port performance program
By DAN WHEAT
Capital Press
The U.S. House has passed
a bill reauthorizing transpor-
tation and infrastructure pro-
grams that includes one of
several bills aimed at address-
ing work slowdowns at U.S.
ports.
A work slowdown crippled
West Coast container ports a
year ago, costing agriculture
and other industries billions
of dollars.
Reps. Dan Newhouse,
R-Wash., and Kurt Schrader,
D-Ore., led the effort to in-
clude the Port Performance
Program in HR 22, the Fixing
America’s Surface Transpor-
LEGAL
tation Act.
The FAST Act passed the
House, 359 to 65, on Dec. 3. It
was agreed to in a conference
report between the House and
Senate, so is expected to eas-
ily pass in the Senate, a New-
house aide said.
The program requires the
Bureau of Transportation Sta-
tistics to collect and report
port statistics and establish a
working group to make rec-
ommendations to the agency
on specific port performance
metrics.
The program will provide
objective baseline economic
data for port operations that
will be critical for examining
the economic effects of port
slowdowns, Newhouse said.
“Unfortunately, very lit-
tle data exists on the perfor-
mance of our ports when it is
a requirement in nearly every
other sector of our transporta-
tion system and is important
not only in identifying and
dealing with congestion but
shaping transportation poli-
cy,” Schrader said.
Under the bill, the bureau
would submit a report on port
capacity and volumes no later
than Jan. 15 of each year. It
would cover the top 25 ports
in the nation by tonnage, con-
tainers and dry bulk.
The working group would
submit recommendations to
the bureau within one year of
enactment.
On Nov. 5, Newhouse and
Schrader introduced HR 3932,
the Ensuring Continued Op-
erations and No Other Major
Incidents, Closures or Slow-
downs, which is known as the
ECONOMICS Act. It would
establish specific economic
triggers that when met would
require a board of inquiry to
recommend to the president if
judicial injunctions should be
sought to end strikes or slow-
downs.
On Aug. 5, Newhouse,
Rep. Dave Reichert, R-Wash.,
and two other Republicans
introduced HR 3398, the
Protecting Orderly and Re-
sponsible Transit of Ship-
ment, called the PORTS Act,
allowing governors of seaport
states and territories to initiate
board of inquiries under the
Taft-Hartley Act in the event
of work slowdowns or strikes.
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A federal agency has twice
faulted the longshoremen’s
union for unfair labor practic-
es at the Port of Portland, but
such rulings won’t directly re-
store container service at the
facility, experts say.
Ocean carriers responsible
for the majority of container
traffic at the port, Hanjin and
Hapag-Lloyd, stopped ser-
vicing the facility earlier this
year due to low productivity.
The disruption has affected
farmers who relied on Port-
land’s container terminal to
export crops to Asia and now
face higher shipping costs.
The National Labor Re-
lations Board has found that
since September 2012, the
International Longshore and
Warehouse Union operated
cranes and trucks in a “slow
and nonproductive manner,”
among other actions, to force
ocean carriers and the termi-
nal operator to “cease doing
business with the port.”
In a previous ruling, the
NLRB also found that the
union also engaged in earlier
work slowdowns and stop-
pages during a dispute with
the terminal operator, ICTSI
Oregon.
These findings allow the
agency to seek contempt
sanctions against the union in
federal court.
Capital Press was unable
to reach an ILWU spokersper-
son for comment. Elvis Gan-
da, CEO of ICTSI Oregon, re-
leased a statement saying the
50-4/#4
Capital Press
ROP-32-52-2/#17
By MATEUSZ PERKOWSKI