Jun 23, 2020

Global apple market reached $78B; set to continue moderate growth

IndexBox has just published a new report: ‘World – Apple – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The global apple market was finally on the rise to reach $78.8B in 2019, after four years of decline. Over the period under review, the total market indicated a temperate expansion from 2007 to 2019: its value increased at an average annual rate of +2.1% over the last twelve-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2014 with an increase of 16% y-o-y. Global consumption peaked in 2019 and is expected to retain growth in the immediate term.

COVID-19: Challenges and opportunities

The COVID-19 pandemic triggered noticeable transformation of the markets throughout the world, in particular, with regard to the apple market. So far, the uncertainty regarding the depth of both the global and the national economic decline is too great to make reliable forecasts. However, changes are currently taking place in key market fundamentals: macroeconomic background, sales channels, supply chains, consumer behavior and prices.

According to the IMF, even several months lived outbreak would lead to at least a 3% contraction of the global GDP in 2020. Previously, during the 2008-2009 crisis, apple production in the world remained stable, but then it stagnated in 2010 and afterward, it continued robust growth.

Since apple constitutes a kind of staple food, the apple market is not too susceptible to falling incomes and economic downturns. However, apples are consumed widely in the HoReCa sector that suffered heavily from the pandemic. Given those assumptions, the contraction of the market in the short term of 2020 might be perceptible but not disastrous. In the medium term, the market growth may be hampered by the possible lack of investment into apple orchards in 2020 due to the economic uncertainty and tight financial conditions for both farmers and investors.

Major supply chain risk comes from possible weather effects rather than the economic crisis. It may be caused by the mild temperatures during the winter season of 2019-2020, which is particularly relevant for Eastern Europe. The mild temperatures could also result in an early blooming that may later cause the fruits to suffer the risk of a freeze.

Certain supply chain risks also exist with regard to quarantine measures.  While workers are locked down, the period of the treatment of trees begins, which is followed by the flowering period; those periods are critical for the appropriate orchard management. This may reduce the future quality of apples or require additional pesticide use to treat plant diseases. Moreover, in China, which is the largest producing country, there is a concern among beekeepers as they cannot serve their beehives appropriately due to the lockdown. This, in turn, may affect the pollination severely and thereby reduce harvests of fruits pollinated by bees; however, the impact of the problem may be rather local than systematically affect the entire market.

Another risk may appear due to the disruption of established international supply chains including food handling and packaging intermediaries, as well as in the processing sector. Supply chains may be undermined by asynchronous quarantine measures taken in the involved countries as well as the restraints in deliveries. However, this is now mitigated by the gradual re-opening of the economies in China, Europe, and other countries; the supply chains are also to be re-established.

Pastry containing apples and apple jams, as well as apple juice, constitute a popular product in cafes, especially in Europe and Western countries, but now this sales channel temporarily collapsed due to the quarantine. Given the limitations of the HoReCa sector, online retail is becoming a key channel for the sale of food products, including apples, apple juice, and processed apple products. Moreover, contactless delivery becomes a ‘must-have’ option for retail services.

Accordingly, retail packaging adapted to different consumption situations becomes more popular, especially for processed apple products: family packages, single person packages of various shapes and dimensions, etc.

As online retail becomes the key sales channel, advertising budgets are to shift increasingly from point-of-sale advertising towards Internet messengers and social networks. Furthermore, increased consumer attention to health stimulates changes in branding and promotion towards focusing on the health benefits of apples and apple products.

Consumption by country

China (40M tonnes) remains the largest apple consuming country worldwide, comprising approx. 48% of total volume. Moreover, apple consumption in China exceeded the figures recorded by the second-largest consumer, the U.S. (4M tonnes), tenfold. Turkey (2.7M tonnes) ranked third in terms of total consumption with a 3.3% share.

In China, apple consumption increased at an average annual rate of +3.4% over the period from 2007-2019. In the other countries, the average annual rates were as follows: the U.S. (+0.7% per year) and Turkey (+0.9% per year).

In value terms, China ($44.9B) led the market, alone. The second position in the ranking was occupied by the U.S. ($4.6B). It was followed by France.

The countries with the highest levels of apple per capita consumption in 2019 were Poland (45 kg per person), Turkey (33 kg per person) and Iran (33 kg per person).

Production 2007-2019

In 2019, production of apples increased by 6.7% to 84M tonnes for the first time since 2016, thus ending a two-year declining trend. The total output volume increased at an average annual rate of +2.1% from 2007 to 2019; the trend pattern remained consistent, with only minor fluctuations throughout the analyzed period.

The pace of growth was the most pronounced in 2011 with an increase of 8.1% year-to-year. Over the period under review, global production attained the maximum volume at 85M tonnes in 2014; however, from 2015 to 2019, production failed to regain the momentum. The general positive trend in terms output was largely conditioned by a temperate increase of the harvested area and a mild expansion in yield figures.

Production by country

China (41M tonnes) remains the largest apple producing country worldwide, accounting for 49% of total volume. Moreover, apple production in China exceeded the figures recorded by the second-largest producer, the U.S. (4.7M tonnes), ninefold. The third position in this ranking was occupied by Turkey (3M tonnes), with a 3.6% share.

From 2007 to 2019, the average annual rate of growth in terms of volume in China amounted to +3.3%. The remaining producing countries recorded the following average annual rates of production growth: the U.S. (+1.0% per year) and Turkey (+1.7% per year).

Harvested area 2007-2019

In 2019, the global apple harvested area expanded to 5.1M ha, increasing by 3.5% on the previous year’s figure. In general, the harvested area saw a relatively flat trend pattern. Over the period under review, the harvested area dedicated to apple production attained the maximum at 5.2M ha in 2015; however, from 2016 to 2019, the harvested area stood at a somewhat lower figure.

Yield 2007-2019

The global average apple yield rose modestly to 17 tonne per ha in 2019, with an increase of 3.1% compared with the year before. The yield figure increased at an average annual rate of +1.4% over the period from 2007 to 2019; the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2011 when the yield increased by 6.2% against the previous year. Over the period under review, the average apple yield attained the peak level at 17 tonne per ha in 2017; however, from 2018 to 2019, the yield stood at a somewhat lower figure.

Exports 2007-2019

Global apple exports reached 8.2M tonnes in 2019, remaining constant against 2018. Overall, exports saw a relatively flat trend pattern. The pace of growth was the most pronounced in 2015 with an increase of 11% against the previous year. As a result, exports reached the peak of 9.3M tonnes. From 2016 to 2019, the growth of global exports remained at a somewhat lower figure.

In value terms, apple exports dropped to $7B (IndexBox estimates) in 2019. The total export value increased at an average annual rate of +1.2% from 2007 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period.

Exports by country

The shipments of the five major exporters of apples, namely Poland, China, Italy, the U.S. and Chile, represented more than half of total export. It was followed by South Africa (464K tonnes), New Zealand (432K tonnes) and France (381K tonnes), together creating a 16% share of total exports. Turkey (256K tonnes), Moldova (255K tonnes), Serbia (217K tonnes) and Belgium (195K tonnes) took a minor share of total exports.

From 2007 to 2019, the biggest increases were in Turkey, while shipments for the other global leaders experienced more modest paces of growth.

In value terms, China ($1.2B), the U.S. ($962M) and Italy ($841M) were the countries with the highest levels of exports in 2019, with a combined 44% share of global exports. Chile, New Zealand, France, South Africa, Poland, Serbia, Moldova, Belgium and Turkey lagged somewhat behind, together comprising a further 39%.

Export prices by country

The average apple export price stood at $853 per tonne in 2019, which is down by -6.6% against the previous year. In general, the export price, however, recorded a relatively flat trend pattern. The pace of growth appeared the most rapid in 2011 when the average export price increased by 14% year-to-year. Global export price peaked at $913 per tonne in 2018, and then fell in the following year.

Prices varied noticeably by the country of origin; the country with the highest price was New Zealand ($1,311 per tonne), while Turkey ($350 per tonne) was amongst the lowest.

From 2007 to 2019, the most notable rate of growth in terms of prices was attained by China, while the other global leaders experienced more modest paces of growth.

Imports 2007-2019

In 2019, global apple imports shrank slightly to 8M tonnes. Overall, imports, however, showed a relatively flat trend pattern. The most prominent rate of growth was recorded in 2015 when imports increased by 14% against the previous year. As a result, imports reached the peak of 9.7M tonnes. From 2016 to 2019, the growth of global imports remained at a somewhat lower figure.

In value terms, apple imports shrank modestly to $7.2B (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +1.6% from 2007 to 2019; the trend pattern remained consistent, with only minor fluctuations being recorded in certain years.

Imports by country

Russia (701K tonnes) and Germany (603K tonnes) represented roughly 16% of total imports of apples in 2019. The UK (342K tonnes), Egypt (297K tonnes), Bangladesh (252K tonnes), India (250K tonnes), the Netherlands (242K tonnes), Belarus (222K tonnes), Viet Nam (219K tonnes), Spain (218K tonnes), Canada (202K tonnes) and China, Hong Kong SAR (189K tonnes) followed a long way behind the leaders.

From 2007 to 2019, the most notable rate of growth in terms of purchases, amongst the main importing countries, was attained by Egypt, while imports for the other global leaders experienced more modest paces of growth.

In value terms, the largest apple importing markets worldwide were Germany ($482M), the UK ($424M) and Russia ($394M), together accounting for 18% of global imports. Viet Nam, the Netherlands, India, China, Hong Kong SAR, Canada, Bangladesh, Spain, Egypt and Belarus lagged somewhat behind, together accounting for a further 27%.

Import prices by country

In 2019, the average apple import price amounted to $897 per tonne, declining by -1.6% against the previous year. Over the last twelve-year period, it increased at an average annual rate of +1.2%. The most prominent rate of growth was recorded in 2011 when the average import price increased by 13% y-o-y. Over the period under review, average import prices reached the peak figure at $911 per tonne in 2018, and then reduced modestly in the following year.

Prices varied noticeably by the country of destination; the country with the highest price was Viet Nam ($1,608 per tonne), while Belarus ($285 per tonne) was amongst the lowest.

From 2007 to 2019, the most notable rate of growth in terms of prices was attained by Viet Nam, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform