Agencies are breaking down borders through marketing to help sell domestically grown crops.
The U.S. is the third most populated country in the world, based on 2017 United Nations statistics. It seems like there are plenty of customers to buy fresh produce, right?
However, greater agricultural efficiencies often mean America’s fruit and vegetable farmers are looking both out of state and out of the country to fully sell their crops and maximize profits. What’s more, reaching across international borders also is important to stem a shifting trade balance that now sees America as a net importer rather than exporter of fresh produce. For example, America’s fruit and vegetable exports were just over one-third of its imports ($6.3 billion versus $17.6 billion) in 2015.1 This reaching out across borders and seas is a key function of state departments of agriculture.
“It is very important to develop new markets and wider global markets in order to assure our crops are competitively sold,” says Michelle Wang, international marketing specialist for the North Carolina Department of Agriculture and Consumer Services, in Raleigh, NC. “Ninety-five percent of the world’s consumers live outside the U.S. By expanding into global markets, and therefore increasing demand, our state’s exporters will have a better chance to sell their products at better price. For example, North Carolina’s sweet potato growers have choices to sell to the domestic market or overseas markets, whether it is the UK or Italy, or Canada or Mexico.”
A Global Reach
North Carolina is a good example of how far a state’s agricultural reach can go. In 2018, the Tar Heel State’s sweet potatoes were exported to 20 countries, including North America (Mexico, Canada and Iceland), Europe (the UK, Spain, Italy and Norway, for example), South America (Chile), the Middle East (United Arab Emirates) and Asia (Singapore). In 2017, the number of countries receiving North Carolina produce totaled 26 and included the Dominican Republic, Greece, Switzerland and Croatia. Closer to home, North Carolina supplies 60% of all the sweet potatoes consumed throughout the U.S., according to 2017 production statistics from the USDA’s Agricultural Research Service.
Many states rely on out-of-state markets for a significant portion of their crop sales, even though in-state, locally grown branded agricultural programs have been developed and become popular in the past two decades. For example, Ohio has the benefit of a location that allows for an impressive geographic reach. More specifically, Ohio is within 600 miles of 60 percent of both U.S. and Canadian populations.
“One of our best examples is Ohio Proud partner NatureFresh Farms, which strategically built its greenhouse in Delta, OH, to be within a five-hour radius of roughly 20 million people,” says Ashley McDonald, Ohio Department of Agriculture’s program manager for Ohio Proud. “They’re benefiting from marketing fresh, Ohio-grown tomatoes year-round in state but also can provide the freshest quality product to surrounding states and even Canada because of reduced food miles.”
Texas has the advantage of its crops being ‘in season’ when much of the land in northern states is snow-covered.
“We use Specialty Crop Block Grant money from the USDA to market to retailers and restaurateurs up north with our Go Texan brand program,” says Sid Miller, commissioner of the Texas Department of Agriculture. “This includes broccoli, cauliflower, onions, watermelon, cantaloupe, cabbage, kale and carrots, to name a few.”
The South Carolina Department of Agriculture launched its Agribusiness Center for Research and Entrepreneurship program last year. This new initiative is designed to help growers find markets and thus achieve the group’s “50 by 20” goal, or a $50 billion agribusiness industry by 2020. One of the state’s products with a national reach is peaches.
“An advantage for us is such a long peach growing season, from mid-May to September, as well as flavor and a wide number of peach varieties,” says Katherine Pfeiffer, director of merchandising. “We ship peaches north to New Jersey and west as far as Colorado. In general, South Carolina is located within 75% of the entire U.S. population.”
Further afield, New Jersey farmers ship produce to Canada.
“Eastern Canada is a significant export location for a variety of fresh fruits and vegetables grown in New Jersey, including leafy greens, peppers, eggplant and blueberries, among other things,” says Douglas Fisher, secretary of the New Jersey Department of Agriculture. “Our Jersey Fresh brand is synonymous for quality and freshness not only in-state but throughout the Eastern Seaboard and Canada.
In 2018, Virginia exported $1 million in tomatoes to Canada. The year prior, the state’s producers exported $688,000 worth of leafy greens, such as kale and cabbage, to Canada.
To the south, half of the fresh potatoes exported to Mexico from the U.S. come from Colorado, according to Tom Lipetzky, director of marketing programs and strategic initiatives for the Colorado Department of Agriculture. “Advantages to us are closer shipping logistics than the Eastern U.S. and good demand for russets, reds and purple potatoes. The challenge is that currently we are limited to selling our potatoes into the first 16 miles of the U.S.-Mexican border, which puts us out of the highly populated Mexico City market. Therefore, our efforts are currently geared toward establishing a market presence at the border for both importers and exporters.”
The Caribbean is another key market. This region is the No. 1 export market for Pennsylvania’s Red Delicious apples, especially those smaller in size than preferred in the U.S. market. The New York Department of Agriculture has developed a strong market in Puerto Rico for its apples, especially through retailers such as Walmart. Michigan also ships apples to the Caribbean, Central and South America as the state is closer to these overseas markets than top U.S. apple producer, Washington.
“We did a trade mission to Brazil five or six years ago regarding apples and found a lot of interest there by importers and retailers alike,” says Jamie Zmitko-Somers, international marketing manager for the Michigan Department of Agriculture. “We have not been able to get the import protocol between USDA and Brazilian authorities finalized yet, but we hope to see this happen.”
The UK is and has been a valuable market for the Empire State’s tree fruit like apples, according to Richard Ball, commissioner of the New York Department of Ag. “The varieties of apples we grow resonates with UK customers.”
The Fresh From Florida retail operations expanded to 25 nations in 2018, according to Mindy Lee, bureau chief of media, education and communications. This includes the UK, where activities included in-store sampling events, display contests and circular advertising.
“Waitrose customers look forward to the refreshing, vibrant and sweeter flavor of Florida Pink Grapefruit,” says a representative from Primafruit Limited, which exclusively sources imported fruit for the 300-plus unit Bracknell, Berkshire, UK-headquartered supermarket chain. “We have featured this in the Waitrose Food Magazine, highlighting its much-anticipated arrival with a delicious recipe.”
Asia is a significant export market for states such as Florida and Idaho.
“Blueberries are a crop we’ve worked hard to expand interest and sales. We began featuring them in 2003 with sales of $18.2 million. By 2015, sales reached $82 million, representing an annual 27% increase and overall 355% increase. More recently, we tested and expanded interest for Florida blueberries in Singapore and introduced them to the Japanese market for the first time three to four years ago,” says Lee.
One of every six rows of potatoes grown in Idaho finds a home overseas, according to Laura Johnson, marketing and development bureau chief for the Idaho State Department of Agriculture. “Exports are frozen, dehydrated, and to a lesser extent, fresh. However, the fresh segment, including fingerlings and other specialty potatoes, is growing. One of the biggest impacts is Idaho’s foreign trade offices, like the one in Taiwan that was established in 1989. The director there has had a huge impact. Consider that 80% of Idaho’s white-fleshed peach crop is now exported to Taiwan. Also, the reach of Idaho’s produce products has expanded to other Southeast Asian countries. An example is the introduction of Idaho-grown cherries to China.”
The Ties That Bind
Trade show attendance, strategic partnerships and trade missions are three crucial ways U.S. state departments of agriculture foster connections between in-state growers and out-of-state and overseas importers, distributors and retailers. All three are key, according to Colorado State Ag’s Lipetzky, as “it takes more than one touch for forge long-lasting and strategic partnerships.”
Trade shows offer an important opportunity to connect with existing partners and convey to prospective retail partners the value of marketing under the Jersey Fresh brand, according to New Jersey secretary Fisher. “The Jersey Fresh marketing team can be found at trade shows across the United States, and we are also regulars at the Canadian Produce Marketing Association trade show.”
Michigan growers who wish to attend major trade shows, including those overseas such as Fruit Logistica in Berlin and Asia Fruit Logistica, can participate in a 50% cost reimbursement program on travel and booth space for two people as part of the state’s branded Michigan Grown program, says Zmitko-Somers. “We also assist in costs, such as bilingual labeling and advertising in retail publications in the target country.”
The Michigan ag department, on behalf of the state’s growers and packers, has been working with the U.S. Highbush Blueberry Council for the past five years on a phytosanitary agreement to export the Great Lakes State’s fruit to Asian markets such as China and South Korea.
Texas agency representatives and the state’s pecan growers exhibited at last year’s Gulfood Show in Dubai as part of an effort to globally expand distribution of this product, according to commissioner Miller.
Within the U.S., the Virginia agency and its growers participate in trade shows like the Produce Marketing Association’s Fresh Summit, the Southeast Produce Council’s Southern Exposure show and the Mid-Atlantic Nursery Trade Show.
Partnerships with other government entities are ways state departments of agriculture further efforts to find markets for fresh produce. For example, the Idaho agency is one of 13 state members of the Western U.S. Agricultural Trade Association, based in Vancouver, WA, which offers many tools to facilitate export activities. Similarly, Food Export-Northeast, based in Philadelphia, combines 10 Northeast state agricultural promotion agencies to market the region’s products internationally.
Beyond this, Pennsylvania, New York, Michigan, Virginia and California are members of the Washington, DC-based U.S. Apple Export Council, a trade association of five apple exporting states that administers export promotion grants from the USDA.
“The Apple Export Council assists in promotional activities, such as sampling, signage, point-of-sale and newer methods such as cooking videos for social media,” says Tom Mainzer, agricultural trade specialist for the Pennsylvania Department of Agriculture and the state’s representative to the Apple Export Council.
Trade missions, both in-bound, where foreign buyers tour U.S. farms, and outbound, where U.S. growers and exporters visit importers, distributors and retail operations in other countries, are central to how state departments of agriculture foster lucrative links. This is even more so when the state’s governor goes on such a mission. For example, in 2015, Idaho’s then-governor C.L. ‘Butch’ Otter led a trade delegation to meet with Mexican buyers in Mexico City. The delegation included 18 Idaho companies, including those representing potatoes and onions.
“Having the governor as part of a trade mission attracts and provides access to key decision makers. For example, for the meeting in Mexico, we had executives from retailers Soriana and Walmart. Walmart came with their CEO and five key vice presidents including the one for fresh produce. That proved an incredible way to make connections … fast,” says Johnson, of the Idaho Department of Agriculture.
1 Statistics from The U.S. Trade Situation for Fruit and Vegetable Products, published by the Washington, DC-headquartered Congressional Research Service, on December 1, 2016.
Case Studies Spotlight Ways To Build International Markets
Case 1: Virginia-Grown Apples Travel to India
International successes enjoyed by the Virginia Department of Agriculture and Consumer Services have been with specific importers and distributors, who then take the products they are importing and work through their relationships with retailers to get the products on the shelves.
Indeed, the measure of success for the agency is based on confirmed sales, new distribution partnerships for Virginia producers, increased exposure for Virginia products in a new or existing market, and increased market intelligence. In 2014, its Office of International Marketing, in conjunction with its agricultural trade representative based in India, embarked on just such a concerted effort to export apples to this South Asian country.
“We hosted a group of Indian produce buyers on a visit to Virginia to meet with our apple producers and tour their packing houses,” explains Elaine Lidholm, the state agency’s director of communications. “As a result, Virginia apple exports in 2014 reached $1.67 million and were $1.25 million in 2015, and several of our exporters have established long term relationships with Indian buyers who are eager for a source of high-quality U.S. apples. For instance, we worked with one of the Indian apple buyers to promote Virginia apples in Indian grocery stores over a several week period. The value of these exports varies each year depending on the quality of the crop and the availability of fruit; however, India is an important alternative market for Virginia apple producers, particularly in years when the crop is plentiful.”
Other export markets for Virginia’s apples are in Central and South America, including Panama, Costa Rica, and Colombia. Virginia ranks as the 6th largest apple producing state in the U.S., according to data from the USApple Association, Falls Church, VA.
Case 2: Partnered Promotions Increase Sales Of North Carolina Sweet Potatoes In Europe
Sweet potatoes were a relatively under-eaten commodity in Europe compared to the U.S. a decade ago. That’s when the North Carolina Department of Agriculture and Consumer Services partnered with the North Carolina Sweet Potato Commission and Bonn, Germany-based marketing agency, mk², to market this vegetable in Europe. A decade later, more than 10 years of marketing efforts such as customized marketing programs, point-of-sale materials and multilevel and multinational promotional campaigns, sweet potatoes transformed from a niche to a trending product with export volume increased by 682.5%. (1)
“The popularity of the North Carolina sweet potato has grown rapidly here in Europe,” says Michael Wilde, sustainability and communications manager for Eosta, an international produce distributor, based in Waddinxveen, the Netherlands. “When we started introducing the product it was essential to share both culinary as well as the health benefits. Through the support of the NCSPC and together with mk², our retail partners were able to create more consumer awareness for this amazing product by organizing the International Sweet Potato Week, tastings, events sharing information and recipes.
“The promotions and tastings have been effective in numerous European countries including Finland (supermarket Kesko), Sweden (ICA) and Germany (Rewe). That said, as the interest for sweet potatoes increased, so did the competition particularly from China, Israel, Spain and Egypt. We are therefore now in a crucial phase where we are reiterating the origin and the premium quality of the North Carolina ‘Covington’ product as a superior sweet potato compared to the rest.”
Case 3: Florida Grapefruit Is A Big Hit In South Korea
Florida is the largest producer of grapefruit in the United States. A reduction in production and domestic demand has made the Sunshine State the largest American exporter for this citrus, accounting for 72 percent of the nation’s grapefruit exports in 2014. (2) In 2005, the Florida Department of Agriculture, as part of its Fresh From Florida agricultural-branding program, identified South Korea as a possible market for the state’s grapefruit. Factors influencing this were Korean consumers’ view of grapefruit as a premium alternative to oranges and virtually no in-country production.
“After compiling and performing market research, we identified South Korea’s leading distributor to establish a partnership for Florida grapefruit,” says Mindy Lee, the agency’s bureau chief of media, education and communication. “As with most international marketing efforts, the first two years of running promotions showed no gains in consumer demand. However, in the third year, our efforts started to gain traction. By the end of Year 6, our promotions started to influence retailer purchases and consumer acceptance. Our promotions take the form of sampling events, mobile apps, Instagram posts, print media, TV infomercials and consumer trade shows.”
From 2006 to 2014, exports of Florida grapefruit to South Korea increased 550%, from $740,000 in 2006 to over $4.8 million in 2014, according to the 2015 International Report done by the Florida Department. In the 2014-2015 season, the U.S., primarily from Florida, represented 54% of market share of grapefruit imported into South Korea. (3)
“In recent years, the effects of citrus HLB disease has caused exportable supply to dwindle. However, we continue to promote Fresh From Florida Fresh grapefruit to maintain demand for that day when a cure is found for HLB and exportable volumes rise,” says Lee.
2 Ten Years in Europe, The North Carolina Sweet Potato Program, Program Overview, 2008-2018, by the North Carolina Department of Agriculture and Consumer Services and the North Carolina Sweet Potato Commission
3 The 2015 International Report, published by the Florida Department of Agriculture & Consumer Services.
Based on the report, An Overview of the Grapefruit Market in South Korea, published in 2017 by the University of Florida’s Institute of Food and Agricultural Services, in Gainesville, FL.
