Fresh Appeal says sky the limit as it targets airlines for fruity snacks

Fresh Appeal, a privately owned company which is commercialising technology to preserve cut fruit, is expanding into airline catering in the expectation it will provide a substantial new source of revenue.

Auckland-based Fresh Appeal said its fresh sliced apple brand Fruitees has undergone a year-long trial by one of its Australian licensees working with several airlines and inflight caterers. That's given it the confidence to now seek contracts in its own right with other global airlines and companies supplying inflight catering.

Fresh Appeal, whose technology is used to process more than 20 percent of fresh-cut sliced apples in the US market, said branching out into inflight catering gives it a strong alternative revenue stream to licensing the technology to food processors supplying quick service restaurants and school lunch programmes in the US.

"With this one product within three years we're expecting it to exceed $20 million turnover. Once we get it set up we then expect to double every year after that," said chief executive Kell Holm.

He said the company has already got the processing capacity through its existing US licensees to service the huge opportunity in the air. There is an estimated global market of 3.3 billion air passengers which the International Air Transport Association expects to grow 5 to 10 percent.a year.

Eventually the company also wants to provide bulk sliced produce to airlines serving fresh fruit bowls as part of meals provided on longer flights

Fresh Appeal was originally formed in 2002 as a joint venture between then HortResearch (now Plant & Food) and Logistic Solutions and is now wholly owned by a group of private investors through research and development company Step Sciences.

The company's research and development costs currently exceed income, Holm said. He's expecting that to change within the next two years as the airline business expands along with the overall market for fresh-cut fruit. The International Fresh-cut Produce Association estimates sales of fresh-cut produce have more than doubled to as much as US$12 billion from US$5 billion in 1994. That's about 10 percent of total produce sales in the US.

Fresh Appeal said it has no direct competitors because its unique technology leapfrogs existing processes which were adapted from traditional canning methods. Food safety concerns means the biggest issue the fresh-cut produce industry faces is bacterial infection. Fresh Appeal overcomes that problem by using UV light to disinfect the apple slices, and a short hot water treatment followed by an antioxidant dip to prevent browning and retain the fruit's freshness for longer.

Plant & Food holds the patent for the disinfection process and licenses it to Fresh Appeal for a modest royalty. Business manager of science, Declan Graham, said the crown research institute used its knowhow on fruit texture to develop the heating and cooling process to get rid of human and plant pathogens and prevent fungal growth. The fruit stays fresh for at least 14 days and in some cases up to 21 days which is a lot longer than other processes, he said.

Along with branching out into airlines, Fresh Appeal has also just started selling a new way of coring and slicing the fruit that it estimates increases processor yields by up to 15 percent by causing less damage than traditional methods.

Another area of growth is expanding the range from apples to other fruits and vegetables such as blueberries, strawberries and grapes. Some have been developed to the prototype stage with contracts now being signed with food processors. Holm said they should be in front of consumers early next year. Plant & Food is also working on using the process for whole fruit which could benefit NZ growers.

So far Fresh Appeal has only sold into the US but Holm is currently negotiating with South American food processors and also hopes to sign up an Asian processor who would likely use fruit grown in New Zealand and Australia. Kiwifruit could be one of the fruits used, he said. And he wants to take the NZ Inc approach a step further within the next year by using New Zealand as a test market for new fruits as they emerge from the validation pipeline.

Disclosure: BusinessDesk receives funds from Callaghan Innovation to write on the commercialisation of innovation.

(BusinessDesk)