HOW NEWER GLOBAL FRUIT BRANDS PENETRATE NORTH AMERICAN MARKETS

Originally printed in the December 2019 issue of Produce Business.

In a global marketplace, it seems logical that new overseas-originated fruit brands would compete for North American palates, but their emergence cannot be taken for granted. A combination of hard work, careful strategy, skilled marketing and high-quality product is essential for the successful establishment of any fruit brand, let alone from abroad.

To better understand the rise of overseas-born household names emerging in produce today, let’s get our Sony Discmans out and time-travel back to the 90s.

The year is 1992, and an apple variety called Cripps Pink is first exported from Australia to the U.K. under the brand ‘Pink Lady.’ Soon it is planted in France, and by 1996, there are more than one million trees in Australia, and the apple is introduced for U.S. plantings by the end of the decade.

The dual-name of this apple proves confusing for growers, marketers and supermarkets alike, and the way its licensing is handled leads to decades-long international court disputes over intellectual property rights.

Despite the stumbling blocks it faces, Pink Lady goes on to become the most recognized apple brand internationally, but it serves as a cautionary tale for future fruit brand introductions.

“The apple basically had two names for the longest time, and I think everybody has kind of thrown in the towel and said, ‘let’s just call it Pink Lady’,” says Mac Riggan, director of marketing at Chelan Fresh in Yakima, WA.

“It quite possibly paved the way,” says James Milne, senior vice president of categories and marketing at Oppy, based in Vancouver, Canada. “However, a mistake by Pink Lady was their licensing fee.”

In contrast, Milne says the production environment is now controlled for apple brands his company markets, such as Envy, Jazz and Pacific Rose, which assists with standards and coordinated marketing.

These three brands are owned by Auckland, New Zealand-headquartered T&G.

“The apple category is well established in North America, and we knew we needed the best local partners to grow our Jazz and Envy varieties and complement the imported program from NZ during the summer months,” says Cecilia Flores Paez, T&G’s global brand portfolio manager.

Flores Paez says it has been 10 years since the first Envy apple tree was planted in Washington State’s Yakima Valley in mid-2009.

“We now have the fastest growing variety in the premium apple segment, growing distribution nationwide,” she says of the U.S. market. “It is a highly competitive environment, and we need to continue reinforcing our retail promotions and consumer engagement to remain relevant and fuel growth.”

The T&G representative believes in joint planning with retailers for shopper activations, branded and continuous product availability on shelves, and a pervasive presence in premium-green grocers in order to build awareness, trial and repeat purchases.

Flores Paez points to U.S. consumer research conducted in April this year that showed 72% of survey respondents who trialed Envy said they would probably or definitely buy it, and 47% said they would pay a premium price.

However, the survey also showed confusion and a lack of engagement with apples by shoppers, translating to flat growth for the category overall.

“It is here then where a brand-led approach like Envy would reinvigorate and stimulate the apple shopper,” she says.

Flavors of the World

Rochelle Bohm, brand manager at Wenatchee, WA-based CMI Orchards, says shelf-space in the apple category is at an all-time premium, so when global brands are displayed, they must bring a point of difference beyond being just a new name or variety.

“One of the ways that CMI is enticing customers to try new apples — and category managers to bring them in — is to offer programs that drive trial and awareness of the attributes that make each apple special,” she says.

As part of this, CMI has its ‘Flavors of the World’ program celebrating the unique world origins of seven different apples it grows and sells: Ambrosia Gold from Canada, KIKU from Italy, Kanzi from Belgium, and four apples from New Zealand: Jazz, Envy, Pacific Rose and Smitten.

“Kanzi, for example, is one of the most popular apples in Europe, and its popularity continues to climb as customers fall in love with the sweet and tangy flavor intensity of the apple,” says Bohm. “This detail drives curiosity in U.S. consumers who are eager to try it for themselves, and we’ve found success with describing its overseas success as a lure for people to try it in the United States.”

While there is definitely strong demand for the “locally grown” movement, which can extend from regional apples to domestic apples, Bohm says there is something sexy and appealing about exotic apples with a global following.

Riggan of Chelan Fresh says building a brand comes down to the old saying that “marketing gets the first sale, but the apple has to get the second sale.

“Nothing is worse than a good promotion on a bad product, so product is king,” he says.

In addition to its own domestically developed brands, Chelan grows and markets New Zealand-bred Koru and Rockit apples, which, similarly to the T&G stable, have controlled production programs through partnerships.

“When you’ve got the scale to hit at least half the marketplace or 60%, then you’re probably ready to have a nationwide presence and ramp up awareness,” says Riggan.

Before that large-scale volume exists, he says the trick is to market a new brand regionally.

“You get the retailers that take ownership of promoting it,” he says. “Then they might have a one-year exclusive, but for that reason they’ll show it a lot of attention in the stores.

“Right now, word of mouth is really a vital part of building a brand. It’s probably the most powerful thing you can do,” says Riggan, claiming you should never underestimate the interest generated by travelers from different parts of the country trying a delicious apple for the first time.”

Flavor and Branding Beyond Apples

The connection between flavor and varietal-based branding goes a long way to explaining why apples dominate the stable of global fruit brands in the United States.

Unlike blueberries or cherries, for example, where most marketers try not to confuse consumers through multiple brands as varieties change, apple varieties are more easily discernible, and each one can usually stay on the shelf longer.

Oppy’s Milne says his company has introduced several fruit brands from south of the border and beyond, including Mevi avocados from Mexico, Linda gold pineapples from Costa Rica, Lepex grapes from Chile and Riversun Australian citrus.

When asked about the potential for global cherry brands, Chelan’s Riggan says his company has its own Orondo Ruby cherry but with limited volumes, while Stemilt and CMI Orchards market the Skylar Ray brand.

But as far as the likelihood of a major cherry brand developing from outside the United States or Canada, the biggest counter-seasonal cherry supplier, Chile, tends to focus more on the Chinese market and tends to grow U.S.-bred varieties, while New Zealand’s volume is too small.

Chelan also produces pears, but Riggan says the long lead times for production might explain why this fruit hasn’t seen much in the way of branding, with another aphorism: “You plant pears for your heirs.”

Bohm of CMI says pears are definitely a commodity that needs some new offerings to stimulate excitement within the category.

“There are a number of branded pears in development, including several from Europe and the Piqa series from New Zealand,” she says.

Yes, New Zealand again — a country with less than five million people, but at the forefront of the world’s fruit brands. But as previously reported in this magazine, in 2018 it was another crop that overtook apples to become New Zealand’s top fruit export — kiwifruit.

“U.S. consumers had Hawaiian and Jamaican papayas to choose from, but supply was not nearly what it became once Brazil entered the market.”

— Melissa Hartmann de Baros, HLB Specialties

The Rise of Kiwi Fruit Branding

It’s time to go back to the 90s again, and we see New Zealand kiwifruit growers are struggling with oversupply and low prices. In response, they set up a global marketing organization called Zespri in 1997.

Operating as a single desk marketer, the grower-owned company can control supply and quality. This monopsonist set-up will draw the ire of free market advocates over time, but the move proves successful, and the bar is constantly raised for on-orchard and post-harvest standards.

“Rather than competing against each other and driving prices lower, growers came together to establish a market-driven strategy,” explains Zespri’s market manager for North America, Glen Arrowsmith, who is based in Newport Beach, CA. “Back in the 1950s, the United States received some very early shipments of New Zealand kiwifruit, and since then we’ve seen our sales across North America grow from less than $25 million in 2014 to $96 million last season.”

Zespri has also seen strong incremental year-on-year growth continue in Canada, says Arrowsmith. He says Zespri’s goal is to double these figures in the next four years and for North America to become the company’s fourth-largest market.

“More broadly, innovation has been critical to our industry’s success,” says Arrowsmith. “That’s evident in the investment we’ve made alongside Plant & Food Research in our new variety breeding program, which successfully developed our SunGold fruit — now a key driver of the growth we’re seeing in North America.”

“On average, retailers who use Zespri’s SunGold kiwifruit in-store programs receive increases in their incremental sales,” he says. “A recent third-party study has shown a 96% dollar increase when doubling the size of the kiwifruit display to 6 ft. x 2 ft.”

Just like New Zealand’s companies that have benefited from global production of their apple varieties, Zespri also has expanded into Northern Hemisphere production of its branded kiwifruit, especially with SunGold in Europe.

North America will be the next frontier for this progression.

“Zespri is in the early stages of growing trials in the United States to test a range of growing regions and, critically, to see if fruit of consistent premium quality matching Zespri’s standards can be grown,” says Arrowsmith. “If these trials are successful, and the Zespri SunGold variety is commercialized in the United States, the 10-year view would see the U.S. market supplied with Zespri SunGold year-round from a combination of New Zealand, Italy and U.S. origins, which would help accelerate our growth.”

Zespri may dominate in the global kiwifruit branding stakes, but a rapidly growing Italian rival is giving the New Zealanders a run for their money.

Cesena-based Jingold has production not just in Italy but also in Portugal, Chile, Argentina and South Africa, and has a strong focus on giving consumers a variety of flavors.

“In recent years, we’ve introduced new varieties like Jingold Bliss, a green-flesh variety with a very premium positioning, and Oriental Red, a red-fleshed cultivar with a fantastic and completely new flavor, which has been granted the 2019 Fruit Logistica Innovation Award (FLIA) as the best innovation of the year in fresh produce,” says Alessandro Fornari, director of Jingold.

Fornari says Jingold has been able to forge ahead in new markets, thanks to its cooperation with many companies to develop its varieties and brand.

“Jingold today represents more than 800 growers and 20 grower organizations worldwide supplying their fruit through us,” he says. “We think the biggest potential is related to the new varieties, such as the gold ones, since the consumption is still very low but it shows clear signs of growth.”

In terms of the U.S. market, Jingold kiwifruit is imported on both the East and West Coasts, but Fornari says distribution is different from state to state.

“We have been supplying the United States and Canada market for many years, but in the last few years our brand had a big development, and we appreciated an interesting increase of the penetration,” he says. “Players in the market are starting to recognize the brand very well and, most of all, they are looking for Jingold kiwifruit – it means once the consumers try our product they come back buying, which is the best result for us.”

From Brazil to the World

A year after the establishment of Zespri, new regulations in the United States trigger market entry for a new tropical fruit brand with Brazilian origins that had already found success in Europe.

“In 1998, Brazil received the authorization to export papayas to the USA, which is when our family emigrated to Florida and set up an office to start importing Brazilian Caliman-brand papayas,” says Melissa Hartmann de Barros, communications director at HLB Specialties in Fort Lauderdale, FL.

Melissa’s father, Homero Levy de Barros, had founded HLB Tropical Food in Germany in 1989 as a fresh fish import business, but in 1992, he made the shift to air-freight fresh papayas.

Through a partnership with Espirito Santo, Brazil-based grower Caliman Agricola, the strategy was to assume the risk of displaying papayas with at least 50% color versus green fruit.

“If the fruit didn’t sell, HLB offered to pay for it. To the retailers’ surprise, the yellow papayas sold, and a trend was established and soon many big retailers started carrying papayas with color,” says Hartmann de Barros. “HLB helped set the standard for the European papaya industry, and we are known as pioneers in the field.”

The company followed a similar formula with its North American operations and quickly grew to become one of the largest papaya importers and distributors into the United States. and Canada.

“Before then, U.S. consumers had Hawaiian and Jamaican papayas to choose from, but supply was not nearly what it became once Brazil entered the market,” she says. “Offering Brazilian fruit created demand and sales picked up very quickly. Soon HLB was receiving more than 150 pallets a week by air of Brazilian Papayas alone.”

In the beginning, store demos were a very important part of the strategy to raise awareness about the fairly new product, along with point-of-purchase (POP) materials, including 1,000 stands to hold three papaya boxes with instructions on eating the fruit and recipes.

“At that time, we were almost synonymous with Caliman Papayas, which is why we changed our company name to Caliman International for a few years,” says Hartmann de Barros. “We changed that back to HLB when we started carrying products other than Caliman papayas.”

HLB Specialties had another growth spurt in 2010 when it started importing large papayas of the Tainung variety, known as Formosa in Europe.

“Since 2010, our company’s sales have tripled, and we have new tropical items now and expect the company to keep growing.”

More than two decades later, another Brazilian outfit is trying to crack the U.S. market with a new brand. At this year’s Produce Marketing Association (PMA) Fresh Summit, Crown International USA LLC of Key Biscayne, FL, made a splash with its introduction of the ‘Dino’ white honeydew melon.

The melons are developed and grown by Agricola Famosa of Rio Grande do Norte, Brazil, and carry the Dino name due to the resemblance of what a dinosaur egg might look like. “Our marketing strategy for entering this market was to focus on the Dino melon, one of several types of melons produced by Agricola, as we understand that the North American market, which is different than the European market, is a branding market,” says Rodrigo Lima, president of Crown International. “Feedback was better than expected. The combination of the excellent product with fun branding had an instant acceptance.”