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New products, added plant capacity play major role in Tree Top's sales strategy
Editor's Note: The authors are agricultural economists. Lyon is a former staff member and Durham is the Markets and Trade Economics program leader at Oregon State University's Food Innovation Center Experiment Station. Steve Betula is a professor in the Department of Agricultural and Resource Economics at Oregon State University. This article is the result of a research project funded by USDA's Rural Business-- Cooperative Service to explore issues related to exporting and importing high-valued products by cooperatives.
Tree Top, a Washington-- based fruit processing cooperative, is pursuing a multi-faceted marketing strategy that increasingly is focusing on new technology, both as a marketing tool and means to develop unique, value-added fruit products for the food ingredients industry. These and other efforts to increase returns to the 2,000 grower-- members who own the cooperative have proven especially important during the past five years, as juice and peeler market apple prices have declined sharply.
Much of Tree Top's marketing success is the result of a state-of-the-art research and development (R&D) facility, staffed with creative technicians who work to develop specialty products that expand possible uses for fruit. Tree Top's R&D employees often move laterally to other parts of the organization, such as sales, spreading a "product-development mentality" throughout the cooperative. Richard Bailey, Tree Top's chief financial officer, says the pilot plant at its headquarters in Selah, Wash., is state-of-the-art. Tree Top's R&D unit has developed unique methods for drying and quality control and many special fruit ingredients used by their further-processing customers.
The cooperative, established in 1960, sells products across the entire range of food product buyers: retail, Hotel-Restaurant-Institutional (H.I.), and other food processors, including cereal-maker Kelloggs and the Orowheat bread company. Tree Top packs juices and applesauce in ready-- to-consume form for retail and institutional distribution, concentrates for H.I. and other juice bottlers, and a wide range of ingredients for further processing
One of the co-op's more ambitious recent product introductions is Tree Top packaged fresh apple slices for the retail market. The co-op introduced the apple slices in a retail test market in June 2001. However, at the request of its member fresh-apple warehouses, the distribution process was changed in...