A “Core” Effort
Succeeding in a Global Marketplace
Apple Crisp Cooperative was formed two years ago by seven independent apple growers, one of whom is Harry Hoch, pictured (at right) in his orchard near La Crescent. As individual businesses, Minnesota apple orchards are generally small, producing modest volumes of product. Together the orchards are capable of providing sufficient critical mass to engage in a marketplace increasingly dominated by global, large-scale forces.
The cooperative was established to develop markets for apples that are less than number one quality. Early research results identified a market for sliced Haralson apples – a prized Minnesota apple used in quality baking – in the food service industry associated with institutional customers such as:
* schools and
* large bakeries.
Thus far, the cooperative has developed a flash-frozen sliced apple product and has the capacity to process approximately 20,000 pounds annually on a test basis. Half of the sliced apple production for this past year has been sold to a large retail operation. Apple puree is another cooperative product. 10,000 pounds of apple puree are currently being used by a processor for Minnesota apple ice cream. The Apple Crisp Cooperative is considering the production of a Minnesota applesauce. Similar to the frozen apple product, growers will first research and identify a market for the product. If the research results are positive, the cooperative will explore the feasibility of building a processing plant for the applesauce.
The value-added strategy undertaken by the cooperative provides an excellent opportunity for Minnesota apple producers to compete in a tough marketplace dominated by commodity pricing. The challenge is to create the opportunity to pursue value-added ventures given the heavy demands placed on orchard owners in managing their production operations. Attracting capital to sustain thevalue-added business will not happen unless market research suggests a positive outcome.
A University of Minnesota Carlson School of Management graduate marketing class has completed a promotions/product placement study under the guidance of a professor of marketing and logistics management. The students, organized into field teams, responded to a series of market and promotions issues drafted by the Cooperative. Apple Crisp Cooperative is also involved in the Southeast Minnesota Working Foods Group in building a long-term collaboration with University interests