Market spreads bets to offset apple juice jitters

Related tags Apple

Volatile apple concentrate prices are forcing diversification and consolidation, despite the current buoyancy in the market, according to juice base processor David Berryman.

Md Rachel Collins said broadening its activities had enabled the company to bounce back after a tough few years during which the bottom fell out of the apple juice concentrate market. This had been a major revenue source for the firm, which saw its sales more than halved by the knock-on hit from the sector.

"In 2008, the floor was knocked out of apple juice concentrate and prices went from two euros per kilo to 60 euro cents per kilo, fuelled by over-production and over-stocking. Our turnover and profitability dropped dramatically from £22M to £10M. Businesses suffered huge losses.

"We had to readjust our model to reduce dependency on apple juice concentrate. 70% of our business was apple juice trading."

Collins said David Berryman now worked with a range of blends, with as much as 30% of commercial activities based on grape extract.

The apple juice concentrate situation subsequently changed, but Collins said David Berryman would keep its options open. "Apple juice has gone back up again, with China, formerly a huge player in the market, consuming fewer apples and producing less concentrate. This has meant the price has gone back up to euro 1.50–1.60. The number of apple juice concentrate processors is reducing and the amount available is reducing, which means competition is becoming harder."

Collins aims to explore opportunities at both ends of the supply chain in juice and other categories and broaden the company's product range to make it less dependent on market volatility. More focus would be devoted to new product development, she said. Other categories offering potential for fruit bases included ice cream and desserts.

"I think there's scope for new, fruit-based products that are more innovative than those currently on the market."