Global Apple Production Challenges and Their Impact on the US Apple Juice Industry

Apple is one of the most consumed fruits in the United States (US). According to the United States Department of Agriculture's (USDA) Economic Research Service (ERS), approximately 52% of apple consumption in the US is in the form of juice, signifying a clear preference for apple juice as a preferred way to enjoy this fruit. The consistent demand for apple juice underscores its popularity among consumers.

Source: USDA ERS

The US is known as the world's largest importer of apple juice, heavily relying on supply from countries such as Türkiye, China, Ukraine, and Poland. In 2022, the US witnessed a substantial 20% year-on-year (YoY) increase to 2.05 million cubic meters of apple juice imports, underlining the growing demand for this beverage in the US. However, the anticipation of reduced global apple production in 2023 introduces fresh challenges to the US apple juice industry.

Source: Trademap

Global Apple Production Challenges in 2023

Poland, as Europe's largest apple producer, anticipates an 11% YoY decrease to 4 million metric tons (mmt) in the apple harvest for 2023. This decline is primarily attributed to adverse weather conditions, including hot summers which damage apple skins, leading to reduced storage periods and diminished stocks of fresh apples.

Similarly, in China, the production of apple juice concentrate for this season is estimated to be 300,000 metric tons (mt), which is half of the average annual production volume. Apple output forecasted will reduce by 11% YoY to 41 mmt in 2023 primarily attributed to high temperatures during the bloom period, which reduced fruit sets in Shaanxi and Shandong provinces.

Meanwhile, Türkiye is facing challenges related to the quality of its industrial apple in 2023. The apple production forecast will reach 4.8 mmt, an increase of 7% YoY. The current harvest season kicked off in early September and is estimated to end in late October, but there's a possibility it may extend into mid-November. However, apple orchards have encountered issues following a summer heatwave. Such heatwaves can result in quality problems for apple trees, including sunburn, water stress, fruit drop, and diminished fruit quality. Consequently, this is expected to reduce the volume of good apple quality available for processing.

In Ukraine, apple production in 2023 is anticipated to decrease by 6% YoY to 1,09 mmt due to labor force problems and rising input costs. This decline adds to the global apple supply challenges.

Source: World Apple and Pear Association (WAPA)

Impact on the US Apple Juice Industry

With the global apple production forecasts showing a downward trend, Tridge expects that the US apple juice industry is likely to experience a supply squeeze until year-end. The industry has already experienced early signs of the issue. From Jan-23 to Jul-23, the US imported a total of 1.05 million cubic meters of apple juice, a decrease of 19% YoY. This drop in import volume indicates potential difficulties for the industry in securing adequate apple juice quantities.

Source: Trademap

The dwindling apple juice quantities have contributed to upward pressure on prices. In the first week of Oct-23, the price of apple juice in major US retail outlets reached USD 2.9 per 64 ounces (oz) according to the USDA. This represents an 11% YoY increase from the prior year's price of USD 2.61 per 64 oz. The price hike presents challenges for both consumers and apple industry stakeholders. Consumers may continue to encounter higher costs for apple juice. This situation also potentially prompts the consumer to shift to alternative cheaper fruit juices.