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Fruit cooperative posts profitable year
Apple glut, flat sales prompt Tree Top to develop new products
Friday, October 12, 2001
By BILL VIRGIN
SEATTLE POST-INTELLIGENCER REPORTER
Tree Top Inc. said it recorded its ninth year of profitability, although the Yakima County-based grower cooperative said profits and apple prices were down substantially from a year ago.
Tree Top, based in Selah, reported record sales of $297.5 million in the fiscal year ending July 31, up from $289 million the previous year.
It also processed a record volume of fruit, 533,000 tons, in the 2000 harvest.
But a worldwide glut of apples and juice concentrate drove down prices paid to growers.
Juice apple market values dropped from $112.18 a ton a year ago to $42.93 a ton, while peeler apples (used for food ingredients, about a third of Tree Top's business) fell from $128.90 to $72.28 a ton.
Tree Top paid net proceeds to its growers of $33.3 million, including an $18.80-a-ton profit on apples and $7.52 a ton on pears.
In return for growers pledging their production to Tree Top, the cooperative pays members the commercial market value for the fruit as well as profits that Tree Top can generate from processing those apples into juice, food ingredients and other products.
In the previous fiscal year Tree Top reported net proceeds to its growers of $50.9 million.
To cope with the apple glut and a flat market for products like juice, Tree Top is looking to boost sales through new products.
Corporate communications manager Pat Moss said Tree Top tested colored, flavored applesauce packaged in a plastic tube that doesn't require refrigeration.
The product, aimed at children 6 to 12 years old and test-marketed in California, should be introduced in the Northwest early next year.
Moss said Tree Top has also introduced fresh apple slices in airtight plastic bags that are sold in grocery produce sections.
Tree Top has nearly 1,300 employees, including more than 1,000 at plants in Yakima, Benton and Chelan counties.
The continuing slump in the apple business is affecting Tree Top's membership. Reflecting consolidation in the industry, Tree Top now has 2,000 members in Washington, Oregon and Idaho, down from 2,500 in recent years.
Moss said the overall acreage represented by members has remained steady.
P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com
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