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CapitalPress.com
February 26, 2016
People & Places
Marketer gives apples an edge
Steve Lutz helps
pioneer how
grocery retailers
sell fresh produce
Western Innovator
Steve Lutz
Age: 60
Family: Wife, Jan, former executive
director of Wenatchee Wine Country,
community volunteer. Three sons.
Education: Bachelor’s degree in advertising, Washington State
University, 1979; master’s in business administration, City Univer-
sity, Seattle, 1989.
Capital Press
WENATCHEE, Wash. —
When Steve Lutz built his
home in the upscale Fancher
Heights subdivision over-
looking Wenatchee in 2004,
he added a putting green on
the edge of the bluff even
though he isn’t a golfer.
“I like to chip. But the real
reason is someone — when
we sell this house — some
golf fanatic is going to see
that and have to have it. In the
meantime, I like looking at
it,” Lutz says.
Always thinking about
marketing, huh?
“That’s what it is. Packag-
ing, man,” Lutz replies.
It’s not the only example
of Lutz, former Washington
Apple Commission president,
marketing consultant and avid
triathlete, looking for a com-
petitive edge.
Social skills
Fresh out of Washington
State University in 1979 with
a bachelor’s degree in adver-
tising, Lutz won a slot at the
American Advertising Feder-
ation Student College Com-
petition in Washington, D.C.
He wanted his presentation to
stand out, so Lutz got a box of
apples.
“I was riding up the ele-
vator with my box of apples
and this girl from a northern
Illinois team said, ‘Those are
Washington apples’ and that
she once lived in Olympia,”
Lutz recalled.
His props helped him place
ifth out of 14 in the compe-
tition but, more importantly,
they were a conversation start-
er with Jan Zander, who three
years later became Jan Lutz.
“I gave him a hard time
about brown-nosing the judg-
es,” Jan Lutz says about the
competition. “But his presen-
tation was great. He was elo-
quent, comfortable and witty,
unlike me, when I get tongue-
tied and nervous.”
Steve Lutz says his par-
ents instilled a good work
ethic in him and that he de-
termined — while helping
his father develop orchards in
East Wenatchee in the 1960s
— that there must be an easier
way to make a living.
His Wenatchee High
School debate coach, Sher-
ry Schreck, remembers Lutz
being “blessed with a reso-
nate, wonderfully persuasive
voice” and that he knew how
to use it.
He had good social skills
and was liked by students and
faculty, she says.
Lutz considered pre-law in
college, but opted for broad-
cast journalism and then ad-
vertising and marketing at
Washington State University.
Upon graduation, Lutz be-
came public relations manag-
er for the Washington Apple
Calendar
To submit an event go to the
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home page of our website at www.
capitalpress.com and click on “Sub-
mit an Event.” Calendar items can
also be mailed to Capital Press,
1400 Broadway St. NE, Salem, OR
97301.
Saturday, Feb. 27
Mid-Valley Winter Ag Fest, Polk
County Fairgrounds, Rickreall,
Ore., 503-428-8224. Events will
promote local ag commerce and
education and provide an environ-
ment that is fun and informative for
the entire family. mvwagfest.com/
Sunday, Feb. 28
Mid-Valley Winter Ag Fest, Polk
County Fairgrounds, Rickreall,
Ore., 503-428-8224. Events will
promote local ag commerce and
education and provide an environ-
ment that is fun and informative for
the entire family. mvwagfest.com/
Tuesday, March 1
Fruit Ripening & Ethylene
Management Workshop, Post-
harvest
Technology
Center,
University of California-Davis.
http://postharvest.ucdavis.edu/
Wednesday, March 2
Fruit Ripening & Ethylene Man-
agement Workshop, Postharvest
Occupation: Vice president of marketing, Columbia Marketing
International, Wenatchee.
Work History: Washington Apple Commission, 1979-1985; Cole
& Weber advertising, 1986-1991; Apple Commission, 1991-2000;
The Perishables Group, 2000-2013; Columbia Marketing Interna-
tional, 2013 to present.
Dan Wheat/Capital Press
Steve Lutz, vice president of marketing at Columbia Marketing
International in Wenatchee, Wash., holds Kanzi apples on a
Columbia Fruit Packers packing line Feb. 4. Lutz is an innovator in
marketing fresh foods.
Commission in Wenatchee.
He became retail marketing
director for the commission,
then worked for Cole & We-
ber, a Seattle advertising
agency.
Lutz returned to the com-
mission as director of domes-
tic marketing in 1991 and was
president from 1995 to 2000.
created success on the retail
shelf than the retailer did,”
Lutz says. “We care about
apples. The retailer has hun-
dreds of items, so the only
ones driving apples are those
who sell them.”
At the commission
At Cole & Weber, he saw
that the wine industry had an
“incredibly rich” system of
sales data and igured a sim-
ilar system could help the ap-
ple industry.
“We were still competing
heavily with Midwestern and
Eastern apples and needed to
quantify inancial beneits for
retailers to change old habits,”
he says.
Retailers regarded apples
as fall and winter produce.
Lutz researched and devel-
oped data to show them they
were leaving dollars on the ta-
ble, that if they carried apples
longer and offered two sizes
of Red Delicious they could
gain sales.
This was 1993 and 1994.
Category management — the
collection and analysis of
sales data by product category
to aid marketing strategy —
was used by Chiquita in ba-
nanas, Dole in pineapples and
Tanimura and Antle in lettuce
and vegetables. It wasn’t done
with apples.
By using data to under-
stand what drives sales, a
marketer can become more
valuable to a retailer and help
determine the right mix, shelf
space and timing of products.
“It was hard for a lot of
people in the apple industry
to accept that we could know
more about the elements that
He had “quite a sales job”
to convince Apple Commis-
sion board members that
spending $200,000 on re-
search and analytics could be
just as valuable as a $2 mil-
lion ad buy.
Lutz won over a majori-
ty of the board and pursued
development of category
management with the help of
Bruce Axtman, a partner in
Willard Bishop Consulting of
Chicago.
However, some in the
Washington apple industry to
this day view category man-
agement as a waste of time,
and for them it is, Lutz says, if
their business model is selling
volume at the lowest price.
“That’s a valid model,” he
says.
At the commission, Lutz
was able to convince retail-
ers that Red Delicious was
king of the apple market and
get them to give it prominent
display in two sizes, all to the
chagrin of Midwest and East-
ern competitors.
By the late 1990s, over-
supply of Red Delicious was
causing apple prices to fall.
Lutz igured the industry
might look for a scapegoat.
Several large companies,
as they still do today, were
holding back inventory to ill
the gap between old and new
crop, hopefully at good pric-
es, but quality suffered.
“This was 1997 or 1998.
We had a big crop and bad
Technology Center, University of
California-Davis. http://postharvest.
ucdavis.edu/
State University Extension and the
Yamhill County Master Gardeners
Association.
Friday, March 4
Friday, March 18
Genesis of an idea
Paciic Northwest Christmas
Tree Association 2016 Short
Course, 8:30 a.m.-4:10 p.m., Holi-
day Inn Portland South, Wilsonville,
Ore. http://www.pnwcta.org/
Ag Chemical Collection Event,
Redwood Transfer Station, Grants
Pass, Ore., 541-690-9983. Pre-reg-
istration is required by Feb. 18.
www.rogueriverwc.org/
Saturday, March 5
Ag Chemical Collection Event,
Rogue Disposal Transfer Station,
White City, Ore., 541-690-9983.
Pre-registration is required by Feb.
18. www.rogueriverwc.org/
Thursday, March 10
2016 Idaho Nutrient Manage-
ment Conference, Best Western
Sawtooth Inn, Jerome, 208-736-
3605.
Saturday, March 12
Spring into Gardening, Mc-
Minnville Community Center, Mc-
Minnville, Ore., 503-434-7517.
This year’s theme will be Home
Landscaping: Small Changes,
Big Impact. Presented by Oregon
2016 Oregon FFA State Con-
vention, Oregon State University,
Corvallis. http://www.oregonffa.com
Northwest Horse Fair & Expo
2016, Linn County Fair and Expo
Center, Albany, Ore. The largest
equine expo in the Northwest will
feature fancy dancing horses, strut-
ting stallions, clinics by world-class
horse trainers and riders, breed and
stallion review demos, equine en-
tertainment and a trade show. http://
equinepromotions.net/
Saturday, March 19
Women in Agriculture Confer-
ence, 8:30 a.m.-3:30 p.m. Paciic
time, 31 locations across the re-
gion. The 2016 Women in Agricul-
ture Conference will offer women
in Washington, Idaho, Oregon,
Montana and Alaska a unique
opportunity to gather in 31 loca-
tions for a one-day event featuring
knowledgeable speakers, inspir-
ing stories, networking with other
producers and practical advice for
learning new skills. http://wome-
ninag.wsu.edu/
2016 Oregon FFA State Con-
vention, Oregon State University,
condition. A lot of fruit was
going to market that shouldn’t
have gone. Apples were soft
when they were shipped. They
were trying to help growers
get paid in the short term. But
it kills consumers from com-
ing back and hurts everyone
in the long run,” Lutz says.
Several on the commission
asked Lutz to speak out about
the need to maintain quality.
He did.
“Some in the industry
didn’t want to hear that and
they let me know it, and some
didn’t like the advertising we
were doing,” he says.
The Perishables
Group
In 2000, Axtman wanted to
expand category management
and bought part of Willard
Bishop from his partners to
form The Perishables Group
in Chicago, offering market-
ing consulting, communi-
cations, consumer research
and performance analysis.
Lutz left the commission and
joined Axtman as a part-
ner, working out of his East
Wenatchee home.
Legal woes that would
bring down the Apple Com-
mission’s large domestic mar-
keting program in 2003 were
on the horizon as the U.S.
Supreme Court was hearing
cases on the legality of com-
modity commissions.
Lutz was accused anon-
ymously of violating state
ethics by going to work for a
company that beneited from
Apple Commission contracts.
A state ethics board dismissed
the complaints because there
had been no contract between
The Perishables Group and
the Apple Commission when
Lutz was still at the commis-
sion. Lutz agreed not to par-
ticipate in new contracts be-
tween The Perishables Group
and the commission for one
year.
Seven Washington apple
companies hired The Perish-
ables Group to continue cat-
egory management. Six con-
tinue today, after the sale of
Perishables Group to the Niel-
sen Co. The six are: Stemilt
Growers, Columbia Market-
ing International and Oneo-
nta Starr Ranch Growers, all
of Wenatchee, and Sage Fruit
Co., First Fruits Marketing of
Washington and Rainier Fruit
Co., of Yakima and Selah.
The Perishables Group ex-
panded into other produce and
Corvallis. http://www.oregonffa.com
Northwest Horse Fair & Expo
2016, Linn County Fair and Expo
Center, Albany, Ore. The largest
equine expo in the Northwest will
feature fancy dancing horses, strut-
ting stallions, clinics by world-class
horse trainers and riders, breed and
stallion review demos, equine en-
tertainment and a trade show. http://
equinepromotions.net/
Sunday, March 20
2016 Oregon FFA State Con-
vention, Oregon State University,
Corvallis. http://www.oregonffa.com
Northwest Horse Fair & Expo
2016, Linn County Fair and Expo
Center, Albany, Ore. The largest
equine expo in the Northwest will
feature fancy dancing horses, strut-
ting stallions, clinics by world-class
horse trainers and riders, breed and
stallion review demos, equine en-
tertainment and a trade show. http://
equinepromotions.net/
Monday, March 21
2016 Oregon FFA State Con-
vention, Oregon State University,
Corvallis. http://www.oregonffa.com
California Fresh Fruit Associa-
tion Annual Meeting, Resort at Peli-
can Hill, Newport Coast. http://www.
cafreshfruit.org
Established 1928
Board of directors
Mike Forrester ..........................President
Steve Forrester
Kathryn Brown
Sid Freeman .................. Outside director
Mike Omeg .................... Outside director
Corporate oficer
John Perry
Chief operating oficer
Born and raised: Wenatchee, Wash.
By DAN WHEAT
Capital Press
eventually into fresh meat,
fresh seafood, fresh bakery
and all fresh food.
Retailers helped drive it.
They asked meat, seafood and
bakery companies why they
weren’t doing it, Lutz says.
The company was tracking
2.3 million items in 19,000
grocery stores with a staff of
60 people. Since 2006, the
Perishables Group had been
getting its raw fresh food data
from Nielsen as a byproduct
of Nielsen’s data collection
for Budweiser and other non-
fresh food companies.
“We had an elaborate sys-
tem. Nielsen had the data but
not the software and program
for organizing it,” Lutz says.
In 2012, Nielsen offered
to buy the Perishables Group
because retailers, noting more
than half their proits come
from fresh foods, wanted one
source of category manage-
ment information.
“If Nielsen turned off our
faucet, we weren’t viable, so
they offered us a fair price and it
all made sense,” Lutz says. The
company is now Nielsen Perish-
able Group and still in Chicago.
Greater need
Lutz became vice presi-
dent of marketing for Colum-
bia Marketing International,
a major apple marketer in
Wenatchee in 2013.
As the industry produces a
proliferation of new apple va-
rieties, category management
becomes even more vital, he
says.
“If three products generate
90 percent of your sales there
is only so much you can do
with analytics. But 40 variet-
ies become more dificult to
track. There’s more ways for
retailers to get it wrong and
leave dollars on the table,”
Lutz says.
“We’ve seen that with Am-
brosia (a McDougall & Sons
variety). It’s the 10th-best-
selling apple in the U.S, but
retailers didn’t know. They
had other niches of older va-
rieties,” he says.
At the industry’s annual
meeting in December, Lutz
warned that newer varieties
will continue to eat into shelf
space of older varieties unless
retailers are able to increase
their income from apple space
and then increase that space.
That happens, Lutz says, as
well-packaged popular newer
varieties at higher prices out-
sell older varieties.
Tuesday, March 22
California Fresh Fruit Associa-
tion Annual Meeting, Resort at Peli-
can Hill, Newport Coast. http://www.
cafreshfruit.org
Wednesday, April 6
Idaho FFA State Leadership
Conference, College of Southern
Idaho, Twin Falls. idahoffa.org/
Thursday, April 7
Idaho FFA State Leadership
Conference, College of Southern
Idaho, Twin Falls. idahoffa.org/
Capital Press Managers
Mike O’Brien .............................Publisher
Joe Beach ..................................... Editor
Elizabeth Yutzie Sell .... Advertising Director
Carl Sampson ................Managing Editor
Barbara Nipp ......... Production Manager
Samantha McLaren .... Circulation Manager
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Friday, April 8
Index
Saturday, April 9
Correction policy
Idaho FFA State Leadership
Conference, College of Southern
Idaho, Twin Falls. idahoffa.org/
Idaho FFA State Leadership
Conference, College of Southern
Idaho, Twin Falls. idahoffa.org/
Wednesday, April 13
International Fair of Agricultural
Technologies Conference and Ex-
hibition, FEXPO Agricola Central,
Talca, Chile
Thursday, April 14
International Fair of Agricultural
Technologies Conference and Ex-
hibition, FEXPO Agricola Central,
Talca, Chile
Markets ............................... 13
Opinion .................................. 6
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