WENATCHEE, WA - As CMI Orchards continues to build on the momentum of its 2016 full company rebrand, the team is looking to 2017 as a year of growth and evolution.

So, what is in store for the remainder of this event filled year? Steve Lutz, Vice President of Marketing, joins me to dish on CMI Orchards' 2017 outlook and how the rebrand is a tribute to the company’s history as well as a platform for its future.

“CMI’s owners and growers have made huge investments in new orchards to produce the key products our customers and consumers demand,” Steve tells me. “This means that over the last few years they were out in front, making the difficult but necessary decisions to remove many orchards with older apples like Reds, Golds, Braeburn, Jonagold, and Cameo, to name a handful.”

CMI ownership was aggressive in replanting orchards with the best genetics for the most popular and flavorful strains of Gala, Honeycrisp, and Fuji. At the same time, it has been converting orchards to Certified Organic which helped establish the leading sales position of its Daisy Girl Organics brand.

“Our owners and growers have been at the forefront of identifying and bringing into production the best new branded apples in the world. We think CMI not only has strong brands, but also an amazing line up of flavorful new apples varieties to drive sales for our customers,” Steve adds. “CMI’s owners have also made critical investments into state-of-the-art packaging and warehouse equipment to ensure as an organization we’re positioned to meet the specific needs of our retail partners. We’re very excited about the future and see great things ahead.”

So, what went into the company rebrand over the past year? I put the question to Steve.

“Our rebrand to CMI Orchards has allowed us to bring a new corporate logo and color scheme into the fold, and the reaction CMI has received from customers and consumers alike has been off the charts,” Steve notes. “CMI has a strong 27-year history. Glady Bellamy and Nick Buak started the company as ‘Columbia Marketing International,’ which was often abbreviated by our customers to just CMI.”

CMI Orchards conducted online research to determine the elements of its organization, logo, and name that customers knew best. The team also sought feedback on the aspects of the company’s branding that held the strongest reservoir of goodwill that could be leveraged in the new design.

The company learned that it could not walk away from the strong legacy of “CMI” as part of the name, nor could it walk away from the eagle imagery so notable in the brand.

When I ask Steve what is currently driving demand and consumption in the apple category and how CMI Orchards is helping to push this category forward, he tells me that the apple category has become incredibly segmented and fragmented over a very short period of time. At this point, Steve believes apples are easily the most complex category in the produce department.

“When you put it together, there are literally thousands of apple brands, varieties, sizes, and packages that retailers have available,” he shares, adding that there are producers all over North America with more apple products arriving from orchards around the globe. “With all this complexity, it is not surprising many supermarkets fail to optimize their category. Just as important, supermarkets have to be attentive to a rapidly evolving apple shopper. It is easy over the course of just one season for a retailer to have their category mix get out of alignment with the consumer opportunity. The result is a lot of potential sales get left on the table.”

There are really three main factors driving the category right now, Steve notes. Part one is that mainline apples are shifting in reflection of evolving consumer tastes.

“It’s critical for retailers to get this part right because mainline apple varieties still drive over 80% of all category dollars and volume,” he says. “The scan data shows the most successful retailers are winning by shifting consumer purchases up from lower priced Reds or Macs into higher priced Honeycrisp, Gala, and Fuji. The retail expansion of Honeycrisp will continue, and going forward retailers will miss sales unless they make these apples, particularly Honeycrisp, a focal point in their year ‘round sales planning.”

The second big category trend is the emergence of branded apples. These apples–for example Ambrosia, KIKU, Kanzi, Jazz, Envy, Pac Rose–all carry higher retail selling prices.

“Every time a consumer makes the transition from mainline apples to our branded apples retail sales dollars jump even when volume remains unchanged,” Steve tells me. “These new apples are fabulous and the growth is phenomenal. In looking at CMI’s top customers, branded apple sales increased by almost 23% last year and now drive over 15% of total category dollars. This is the best category growth opportunity for supermarkets today.”

The third big trend is organics. This trend extends beyond CMI and the apple industry to produce and even the total grocery store. In 2016, CMI’s core retail customers enjoyed sales growth of 12% in their organic apples.

“Thanks to a big increase in our production under the Daisy Girl label, we’ll seen huge increases in 2017,” Steve says. “We will also have a big increase coming in organic branded apples. That’s a hot trend on top of a hot trend.”

CMI understand that the company has a responsibility to develop unique marketing ideas and solutions to help retailers drive higher sales through product, packaging, and marketing innovation. And between new investments in varieties, facilities, and orchards–it’s looking to be a promising year at CMI Orchards.

CMI Orchards