CORNELL UNIVERSITY PROCESSING APPLE PROJECT

1. CORNELL UNIVERSITY PROCESSING APPLE PROJECTADVISORY COUNCIL December 19, 2000 Monroe County Cooperative Extension Office 10:00am-3:00pm Cover SlideCover Slide

2. Marketing Research To Date Industry overview Processor survey Universe of products Foreign markets New products workshop National consumer survey Consumer focus groups

3. Marketing ResearchOn-Going Foodservice Focus Groups School Foodservice Survey

4. New Products Workshop Products Showcase Consumer Motivators Health/Wellness Food Safety Convenience Gratification Summary available Biggest reason for product failure -- me-too Importance of appealing to these motivators for relevance to consumers Biggest reason for product failure -- me-too Importance of appealing to these motivators for relevance to consumers

5. New Product Ideas Applesauce in Squeeze-Tube Package for Kids Pre-Sliced Apples for Baking Snack Pack with Pre-Sliced Apples, Cheese, and Crackers Waldorf Salad Kit with Pre-Sliced Apples Ready-to-Microwave Baked Apples Apple Cider Ice Cream Apple Spritzer with Sparkling Cider and Mineral Water Stir-fry Sauce with Apple Chunks and Savory Spices Fresh Pressed Chilled Apple Juice Apple Juice and Spring Water Beverage for Young Children Microwaveable Apple and Cheese Turnover

6. Workshop Evaluation Overall rating: 3.85 Scale: 1 (not at all useful) to 5 (very useful. The average rating for the workshop presentations (1st half of day) was 4.06 The average rating for the ideation session (2nd half of day) was 3.41

7. Consumer Survey Objectives Quantitatively evaluate demographic trends in the use of apples and apple products Evaluate 15 new product ideas from the new product workshop Objectives Quantitatively evaluate demographic trends in the use of apples and apple products Evaluate 15 new product ideas from the new product workshop Based on consumer interest in concept Along various demographic variablesObjectives Quantitatively evaluate demographic trends in the use of apples and apple products Evaluate 15 new product ideas from the new product workshop Based on consumer interest in concept Along various demographic variables

8. Survey Methods Telephone survey Sample of 1,011 women age 18 and older in private households in the continental U.S. Conducted September 21-25, 2000 Sample weighted along 3 variables (age, geographic region, and race) to ensure accurate representation of population

9. Survey Findings In the past 3 months: 91% have purchased apples or processed apple products 71% have purchased apple products 49% have purchased apple juice 48% have purchased applesauce 10% have purchased apple butter 6% have purchased dried apples

10. Survey Findings Largest market for processed apple products is households with children 40% of US households 79% purchased a processed apple product in past 3 months Households with children under 12 are the leading buyers of applesauce (61%) and apple juice (66%)

11. Survey Findings Black (12%) and Hispanic (7%) women appear more likely than Caucasian women to use some processed apple products

12. Apple Juice Purchases In the past 3 months, 63% of Black women have purchased apple juice 56% of Hispanic women have purchased apple juice 46% of Caucasian women have purchased apple juice

13. Survey Findings Women in metropolitan areas are more likely than women from non-metropolitan areas to buy apple juice and apple sauce High incidence of women that purchase apples for baking in Northeast (35%)

14. Survey Findings Interest in New Product Ideas No �Home-Runs� Highest ranking product, Snack pack with pre-sliced apples and caramel dip had 22% extremely or very interested Demographic targets that warrant further study Black and Hispanic households Families with children under 12

15. Survey Findings Families with children under 12 Likely to be best source of volume for new products 7 products warrant further consideration Snack packs with apple slices with caramel, with peanut butter, with crackers and cheese Squeeze tube applesauce Pre-sliced apples for eating/cooking Apple juice spritzer Spring water/apple juice beverage for toddlers

16. Survey Findings Black and Hispanic women showed higher interest than Caucasian women in new product concepts Highest interest in spring water/apple juice blend for toddlers (27% Hispanic, 41% Black, 15% Caucasian) Qualitative research to explore product use and interest in product concepts

17. Focus Groups Use and attitudes -- fresh apples Use and attitudes -- processed apple products Reactions to prototype products: Fresh slices Dried chips Apple butter Wine/Hard Cider

18. Focus Groups 3 Groups of Female Shoppers: Mothers with Children under 6 Women 50-69 years old Women 25-49 years old Paramus, NJ and Manhattan, NY October 18 & 19, 2000

19. Focus Group Findings Apples are a traditional fruit that these women grew up with and they are making sure that their children grow up with them Appeal of apples is in their crisp, crunchy texture, juiciness, and sweet, refreshing taste and in the belief that they are �good for you� and good for children

20. Focus Group Findings Knowing a product is made from apples leads these women to say that the product will be healthy or tasty However, many perceive processed apple products to be high in sugar, calories and undesirable ingredients Several mentioned that processing destroys unique apple texture �Not everything made from apples is nutritious, just because the apple is nutritious.� �It can be too sweet for my child.� �More of a snack than a real meal.� �The product might be too sugary sweet.� �It looks like it has some good, healthy stuff in it and then you start looking at it and what else they added. It�s just a turn-off.� Loss of character: �They lose an authentic apple flavor.� �They don�t retain their crunch.��Not everything made from apples is nutritious, just because the apple is nutritious.� �It can be too sweet for my child.� �More of a snack than a real meal.� �The product might be too sugary sweet.� �It looks like it has some good, healthy stuff in it and then you start looking at it and what else they added. It�s just a turn-off.� Loss of character: �They lose an authentic apple flavor.� �They don�t retain their crunch.�

21. Focus Group Findings Benefits of apples Taste Refreshing Good for you Diet aid Availability Variety Portable Shelf Life Versatile Taste: �Really great flavor� Refreshing: �Clean out your whole mouth� Good for you: �Good nutrition value� Diet aid: �Fill me up�, �Curbs my appetite� Availability Variety Portable: �Just grab them and go� Shelf Life: �They keep� Versatile Taste: �Really great flavor� Refreshing: �Clean out your whole mouth� Good for you: �Good nutrition value� Diet aid: �Fill me up�, �Curbs my appetite� Availability Variety Portable: �Just grab them and go� Shelf Life: �They keep� Versatile

22. Focus Groups Findings They know apples are nutritious, but are not sure why Fiber Vitamins? No mention of antioxidants They know apples are nutritious, but are not sure why �Nutritious. Good for my child.� �It�s good for them and they�ll eat them.� �It keeps the doctor away.� �They�re good for you, but I�ve never asked why.� Fiber Vitamins?: �I�m not sure which vitamins they are.� No mention of antioxidantsThey know apples are nutritious, but are not sure why �Nutritious. Good for my child.� �It�s good for them and they�ll eat them.� �It keeps the doctor away.� �They�re good for you, but I�ve never asked why.� Fiber Vitamins?: �I�m not sure which vitamins they are.� No mention of antioxidants

23. Focus Groups Findings Dislike about apples Browning Mushy Skin Core Messy, sticky Need to cut Stickers Browning: turn-off to kids �They don�t like to look at brown apples and eat them.� BUT, natural -- if they didn�t brown, �I�d wonder what chemicals are in it.� Mushy: �You can�t always tell the texture.� Skin: �Gets stuck in my teeth�, �Tickles the back of my throat�, �Hard to digest� Core Messy, sticky Need to cut Stickers Browning: turn-off to kids �They don�t like to look at brown apples and eat them.� BUT, natural -- if they didn�t brown, �I�d wonder what chemicals are in it.� Mushy: �You can�t always tell the texture.� Skin: �Gets stuck in my teeth�, �Tickles the back of my throat�, �Hard to digest� Core Messy, sticky Need to cut Stickers

24. Focus Group Findings While most of the women were aware that apples come from Washington and New York State, they did not consider this in their purchases

25. Focus Group Findings Perception that the array of available apple products is limited, often uninteresting, and limited in menu compatibility �There is not really a great variety of interesting products to pick from.� �It�s limited in what it goes with in other food groups.��There is not really a great variety of interesting products to pick from.� �It�s limited in what it goes with in other food groups.�

26. Focus Group Findings Some women believe -- or are led to believe by their pediatricians -- that full strength apple juice may not be good for their children Mixed reaction to an apple juice product cut with spring water �They get gas pains from it.� �it�s really painful if she drinks the apple juice whole. So I cut it with water.� �It wasn�t good for their teeth.� �Not good to get all that sweet, high sugar so young.� pre-mixed juice/spring water: �In a pre-package? With little straws coming out? Would that be a good idea? Yes.� �Individual? Yes. So they can open it up by themselves easier and not be breakable.� �Easy to travel with.� �It sounds healthier in some way. It�s a mind trick.� �Depends on the price.� Could do it myself for less �Don�t know how adulterated it is.� have to buy one apple juice for yourself and one for the kid�They get gas pains from it.� �it�s really painful if she drinks the apple juice whole. So I cut it with water.� �It wasn�t good for their teeth.� �Not good to get all that sweet, high sugar so young.� pre-mixed juice/spring water: �In a pre-package? With little straws coming out? Would that be a good idea? Yes.� �Individual? Yes. So they can open it up by themselves easier and not be breakable.� �Easy to travel with.� �It sounds healthier in some way. It�s a mind trick.� �Depends on the price.� Could do it myself for less �Don�t know how adulterated it is.� have to buy one apple juice for yourself and one for the kid

27. Focus Groups Findings Product reactions Impressed by appearance and convenience of fresh slices Apple chips received ambivalent reactions and need a clearly defined appeal to be competitive in the snack market Apple slices: �Very fresh looking�, �They look perfect�, �They look clean� Skepticism: �These are real apples? I�m amazed. Because the discoloration of an apple is a big turn-off to me.� �Why didn�t they turn brown? I�d want to know what was on it�� �They must have put�.sulfides or whatever they call them.� Taste: �Crisp, cool, refreshing�, �But I just expected more from it�, �the taste was just not there�, �I prefer a sweet apple�, �It tastes like there was something else in there� Interest in purchasing them evenly split in each group Price: $1.19 to $5.50, average $2.57 per pound Chips: �I like the way it looks�, �I might decorate with them.� Many reacted to the sweet/tart flavor of these particular chips. Apple slices: �Very fresh looking�, �They look perfect�, �They look clean� Skepticism: �These are real apples? I�m amazed. Because the discoloration of an apple is a big turn-off to me.� �Why didn�t they turn brown? I�d want to know what was on it�� �They must have put�.sulfides or whatever they call them.� Taste: �Crisp, cool, refreshing�, �But I just expected more from it�, �the taste was just not there�, �I prefer a sweet apple�, �It tastes like there was something else in there� Interest in purchasing them evenly split in each group Price: $1.19 to $5.50, average $2.57 per pound Chips: �I like the way it looks�, �I might decorate with them.� Many reacted to the sweet/tart flavor of these particular chips.

28. Focus Groups Findings Product reactions Many have not tried apple butter, but really liked the flavor. Reactions to the hard cider were quite favorable, but the apple wines were not well received. Measuring specific reaction to these product formulations Liked the apple butter because it was zing -- more flavor The wines did not excite them -- in part perhaps the formulations (did not like the aftertaste in particular) Liked the hard cider for informal occasions and as a gift -- found the flavor to be very pleasantMeasuring specific reaction to these product formulations Liked the apple butter because it was zing -- more flavor The wines did not excite them -- in part perhaps the formulations (did not like the aftertaste in particular) Liked the hard cider for informal occasions and as a gift -- found the flavor to be very pleasant

29. Focus Group Summary Traditional appeal of apples (flavor, texture, good for you) Diminished somewhat in processed products Unclear on nutritional benefits of apples and how these benefits transfer to apple products State of origin not important to most consumers

30. Focus Group Summary Consumer need for apple slices but several issues warrant additional research Consumer concerns about apple juice for young children Appeal of hard cider to women consumers (similar to low alcohol fruit wines on market)

31. Foodservice Focus Groups Institutional Food Service Rochester, NY & Clifton, NJ November, 2000 Family Restaurants Interviews On-Going

32. Foodservice Focus Groups Goals: Assess use and attitudes toward apples and apple products in foodservice Understand the factors which affect purchase decisions for apples and apple products in foodservice Evaluate product prototypes

33. Foodservice Focus GroupsPreliminary Findings New York state apples and apple products face stiff competition in the institutional foodservice industry. Perception of readily available substitutes Washington apples Wide variety of other fruit and fruit products Price sensitivity

34. Foodservice Focus GroupsPreliminary Findings Significant barriers to entry for new or improved apple products in the institutional foodservice industry Foodservice management companies (Aramark, Sodexho Marriott, Gourmet Services, etc.), food wholesalers (Alliant, Sysco, US Foodservice, etc.), and group purchasing organizations play critical roles in determining which food products are available to and utilized by individual foodservice operations.Foodservice management companies (Aramark, Sodexho Marriott, Gourmet Services, etc.), food wholesalers (Alliant, Sysco, US Foodservice, etc.), and group purchasing organizations play critical roles in determining which food products are available to and utilized by individual foodservice operations.

35. Foodservice Focus GroupsPreliminary Findings Consistency is key in apple purchasing decisions Often drives preference for Washington apples Labor constraints and oxidation of sliced apples prevent more use of apples in institutional foodservice When comparing whole New York apples and Washington apples, foodservice managers say consistency is the key; consistent size and consistent appearance. Based on these criteria, Washington apples are preferred. Most consider New York apples to have superior flavor, but in selecting apples, taste is apparently a secondary consideration in the industry. Although one foodservice manager mentioned regional loyalty, others concentrated on desirable product characteristics and availability through primary suppliers as the determining factors in selecting New York or Washington apples. Labor constraints -- cost and availability Limited shelf life of fresh sliced apples (browning) deters foodservice managers from including apples in salad bars, fruit bars, etc.When comparing whole New York apples and Washington apples, foodservice managers say consistency is the key; consistent size and consistent appearance. Based on these criteria, Washington apples are preferred. Most consider New York apples to have superior flavor, but in selecting apples, taste is apparently a secondary consideration in the industry. Although one foodservice manager mentioned regional loyalty, others concentrated on desirable product characteristics and availability through primary suppliers as the determining factors in selecting New York or Washington apples. Labor constraints -- cost and availability Limited shelf life of fresh sliced apples (browning) deters foodservice managers from including apples in salad bars, fruit bars, etc.

36. Foodservice Focus GroupsPreliminary Findings Without prompting, institutional foodservice managers expressed a desire for a pre-sliced apple product with the texture and taste of a fresh apple Focus group participants suggest that the demand for apples can increase with the introduction of a processed, sliced apple product that is competitively priced -- based on observations that many people are more willing or able to eat a sliced apple than a whole apple Prior to the introduction of the product by the moderators, the foodservice managers expressed a desire for pre-sliced apple product. Comments suggest lemon juice and grape juice are unsatisfactory preservatives because they overpower the apples� natural flavor. As one manager commented, �Give me something that�s ready to use but has the natural flavor of the product I�m trying to market.�Prior to the introduction of the product by the moderators, the foodservice managers expressed a desire for pre-sliced apple product. Comments suggest lemon juice and grape juice are unsatisfactory preservatives because they overpower the apples� natural flavor. As one manager commented, �Give me something that�s ready to use but has the natural flavor of the product I�m trying to market.�

37. Foodservice Focus GroupsPreliminary Findings Pre-sliced prototype very well received Questions & concerns: Storage requirements Shelf-life Use in baking Price Coating Peeled a)What are the storage requirements? b)What happens if stored at higher or lower temperatures? c)Is a two-week product life long enough considering the product needs to flow from processor, to distributor, to end user? d)Does the apple bake like a fresh apple, or is the water content going to need to be considered for recipes? e)Can it be affordably priced (i.e. comparable to fresh apple or other substitute fruits)? f)Does the coating have potential side-effects for people with allergies, etc? g)Can the process also be used to produce cost effective skinless options? Success in bringing a sliced, preserved apple product to market will hinge on: a) the slices having the taste and texture of a fresh sliced apple; b) the price being competitive with perceived substitutes; c)the ability of a marketing campaign to help the product overcome the negative bias associated with other sliced, preserved fruit products.a)What are the storage requirements? b)What happens if stored at higher or lower temperatures? c)Is a two-week product life long enough considering the product needs to flow from processor, to distributor, to end user? d)Does the apple bake like a fresh apple, or is the water content going to need to be considered for recipes? e)Can it be affordably priced (i.e. comparable to fresh apple or other substitute fruits)? f)Does the coating have potential side-effects for people with allergies, etc? g)Can the process also be used to produce cost effective skinless options? Success in bringing a sliced, preserved apple product to market will hinge on: a) the slices having the taste and texture of a fresh sliced apple; b) the price being competitive with perceived substitutes; c)the ability of a marketing campaign to help the product overcome the negative bias associated with other sliced, preserved fruit products.

38. Foodservice Focus GroupsPreliminary Findings Positive reaction to dried apple chips However, chips did not create as much excitement as the slices Not new Dried fruit in foodservice generally limited to baking

39. Foodservice Focus GroupsPreliminary Findings Participants emphasized that to expand the demand for a food product in their industry, supply them with recipes and suggestions for how the product can be used

40. Publications Processed Apple Product Marketing Analysis: Hard Cider and Apple Wine, Staff Paper 2000-06 �Adapting to Changing Markets with New Products�, Smart Marketing Column, March 2000 �Are Your Products Relevant?�, Smart Marketing Column, August 2000 �Market Research for New Products�, Smart Marking Column, September 2000 �Marketing Apple Products�, NYS Horticulture Quarterly, December 2000 Processed Apple Product Marketing Analysis: Apple Juice & Cider, Staff Paper (Available December 2000) Northeastern Apple Processors: Situation and Outlook, Staff Paper (Available December 2000)