10 CapitalPress.com
July 29, 2016
Marketer gives apples an edge
Steve Lutz helps
pioneer how
grocery retailers sell
fresh produce
Steve Lutz
Age: 60
Born and raised: Wenatchee, Wash.
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 Universi-
ty, Seattle, 1989.
By DAN WHEAT
Capital Press
WENATCHEE,
Wash.
— When Steve Lutz built his
home in the upscale Fancher
Heights subdivision overlook-
ing 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 mean-
time, 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 Ap-
ple Commission president, in-
novative marketing consultant
and avid triathlete, looking for
a competitive edge in every-
thing he does.
Dan Wheat/Capital Press
Steve Lutz, vice president of
marketing at Columbia Market-
ing International, Wenatchee,
Wash., holds Kanzi apples on a
Columbia Fruit Packers packing
line. Lutz is an innovator in
marketing fresh foods.
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.”
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Work History: Washington Apple Commission, 1979-1985; Cole &
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Steve Lutz says his parents
instilled a good work ethic in
him and that he determined —
while helping his father devel-
op orchards in East Wenatchee
in the 1960s — that there must
be an easier way to make a liv-
ing.
His Wenatchee High
School debate coach, Sherry
Schreck, remembers Lutz be-
ing “blessed with a resonate,
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
Commission in Wenatchee.
He became retail market-
ing director for the commis-
sion, then worked for Cole &
Weber, 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.
Genesis of an idea
At Cole & Weber, he saw
that the wine industry had an
“incredibly rich” system of
sales data and igured a simi-
lar system could help the apple
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 developed data
to show them they were leav-
ing dollars on the table, that if
they carried apples longer and
offered two sizes of Red Deli-
cious 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 bananas,
Dole in pineapples and Tani-
mura and Antle in lettuce and
vegetables. It wasn’t done with
apples.
By using data to understand
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 peo-
ple in the apple industry to ac-
cept that we could know more
about the elements that created
success on the retail shelf than
the retailer did,” Lutz says.
“We care about apples. The
retailer has hundreds of items,
so the only ones driving apples
are those who sell them.”
At the commission
He had “quite a sales job” to
convince Apple Commission
board members that spending
$200,000 on research and ana-
lytics could be just as valuable
as a $2 million ad buy.
Lutz won over a majority of
the board and pursued devel-
opment of category manage-
ment 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 sell-
ing volume at the lowest price.
“That’s a valid model,” he
says.
At the commission, Lutz
was able to convince retailers
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
competitors.
By the late 1990s, oversup-
ply of Red Delicious was caus-
ing apple prices to fall. Lutz
igured the industry might look
for a scapegoat.
Several large companies, as
they still do today, were hold-
ing back inventory to ill the
gap between old and new crop,
hopefully at good prices, but
quality suffered.
“We had a big crop and bad
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 coming
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.
Perishables Group
In 2000, Axtman wanted
to expand category manage-
ment and bought part of Wil-
lard Bishop from his partners
to form The Perishables Group
in Chicago, offering marketing
consulting, communications,
consumer research and perfor-
mance analysis. Lutz left the
commission and joined Axt-
man as a partner.
In 2012, the Nielsen Co.
offered to buy the Perishables
Group because retailers, not-
ing more than half their proits
come from fresh foods, want-
ed one source of category
management information.
Lutz became vice presi-
dent of marketing for Colum-
bia Marketing International,
a major apple marketer in
Wenatchee in 2013.
This story irst appeared
Feb. 26, 2016.