Market Opportunities for Michigan Fruit Products

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July 20, 2018 - Author: William Knudson and Tom Lyons

Introduction


Michigan’s fruit sector faces a number of issues. Among the issues facing fruit producers and processors includes mature markets with limited growth potential. Another issue is increased foreign competition. In both of these instances one solution is to develop new products and markets that appeal to consumers. This analysis focuses on some of the major fruits and fruit products produced in Michigan. These include grapes produced for grape juice, apples, tart cherries, and blueberries. Michigan is a major producer of these fruits, and in the case of cherries the dominant producer in the U.S. These fruits are amongst those most often produced, marketed and processed by members of cooperatives. Through cooperatives, farmers are able to take advantage of economies of scale and reduce their cost of production and negotiate higher prices.


Cooperatives are among the largest marketers of fruit, Sun Maid Growers, Sunweet Growers, and Ocean Spray are among the top six marketers of fruit products in the U.S. (Fruit, p.24). Although it should be noted that private label is the dominant seller of fruit and fruit products.
In some respects, the potential for increased fruit consumption is great. The per capita consumption of fruit is still about 50 percent of the recommended amount according to the USDA. This is despite the fact that more than 90 percent of consumers surveyed purchased fruit within the last three months (Fruit, p.30). Fruit is widely consumed, but at a comparatively low level. Fruit also has the ability to be consumed in many forms: fresh, canned frozen, juice, and smoothies. The growing interest in alcoholic beverages is another potential outlet for fruit.


While there are several positive trends that fruit processors and producers can take advantage of, there is no single solution to the issues facing the sector. Instead of one commodity wide solution that focuses on being the low cost producer; this analysis outlines several products that could present an opportunity for enhanced profits.


This analysis will analyze current production trends for these commodities. Then some of the sectors will be analyzed. This includes the fresh market and beverages sectors. The focus will be on the consumer. Over time, the fresh market has grown in importance and traditional product forms, such as frozen and especially canned, have declined in importance. This has threatened some old line businesses but creates opportunities for others.


Trends in U.S. Production

National trends vary from commodity to commodity. The production of blueberries and blueberry imports have shown a consistent increase from 2007 through 2016. This is shown in table 1. Michigan is a major blueberry producer, ranking third in the nation in 2016.

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Tags: economic and market analysis, micoop

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