Cathy Burns, CEO of the Produce Marketing Association (PMA), was recently in South America for PMA Fresh Connections: Chile, which she opened with her State of the Industry address. FreshFruitPortal.com later caught up with her to hear more about new retail trends, the evolution of consumer marketing campaigns, the growth of Chilean and Peruvian fruit exports, and developments in the rapidly growing Chinese market.
FFP: A large part of the PMA’s work is focused on new ways that we can increase fruit and vegetable consumption – what advice would you give to fruit and vegetable growers and exporters in South American countries looking to expand in mature import markets like the U.S. and boost sales?
CB: I would recommend that growers and exporters focus their strategies on truly understanding the needs of the buying community, which are ultimately dictated by shopper preferences. We heard from buyers during PMA Fresh Connections: Chile that opportunities remain for shippers to grow their market share as long as they deliver product that meets the quality, timeliness, and safety specifications of their customers. By meeting consumers’ desires for fresh, flavorful fruits and vegetables that consistently delight their senses, our industry will be able to create preference and stimulate demand that will help to increase fresh produce consumption.
FFP: What are some of the most interesting changes that you have seen in the Chilean and South American fruit and vegetable industry over the last few years?
CB: In Chile, there has been an important increase in production, reaching 2,7 million tons in the last season (18,57% increase in the last 3 seasons). Today Chile is the 4th largest fruit exporter worldwide and #1 in the Southern Hemisphere. Asia is the destination market with the biggest increase for Chilean exports (44,1% growth in the last 3 years) and within Asia the major growth is in cherries with approximately 90% of the production going to China. While the US and Europe continue to be important markets for Chilean fruit, every year the percentage of their crops going to Asia increases.
Other notable change in Latin America has been the rise of Peru as an important fruit exporter. This country has done an admirable job of opening new markets around the globe, increasing the number of products admissible to existing markets and greatly increasing their production of many commodities such as avocados, blueberries, citrus and more.
FFP: Chilean fruit exporters have faced challenges maintaining their market share in some areas over recent years – with greater competition from other supplying regions and a slow adoption of newer varieties for some key fruits like apples and grapes. How do you see Chile’s future in the U.S. market?
CB: I believe Chile has a bright future in supplying fruit to the United States. The Fresh Connections audience heard from one U.S. buyer that the number one strategy to increase U.S. market share is to continue to invest in new fruit variety development. She cited Cotton Candy grapes as an example of a product she can simply not get enough of for her customers.
FFP: What are some of the biggest trends in produce retailing that you have seen over the last decade, and how do these changes affect foreign growers and exporters?
CB: A number of trends come to mind, one of which has been the growth in organic fresh produce. Overall, in the U.S., organic product sales now account for more than $21 billion. Much of this growth is being driven by Millennial and Generation X consumers, with Gen Z and Boomers following closely behind. Nielsen found that in the U.S. last year, organic pre-packaged salads saw an increase in sales of 5.7%, with organic apples growing +6.8% and organic carrots up +2.8%.
Another global trend is the increasing popularity and consumer adoption of plant-based foods. It is estimated that sales in plant-based foods will increase to 5 billion dollar by 2020. The reasons for the growth in this market segment is based on, among other reasons, consumer approaches to sustainable eating habits, as well as nutritional and dietary concerns. The demand for plant-based foods provides chefs, food scientists, and technologist, with opportunities to design exciting menu options, including vegetable steaks, burgers and even cauliflower pizza. As with organics, studies show the growth here is mainly driven by Millennials who are willing to spend more money on food that aligns with their lifestyles and beliefs.
FFP: How do you feel consumer marketing campaigns for produce are evolving or should evolve in order to keep customers engaged?
CB: Today’s shoppers are more connected than ever, particularly through social media, and the food industry as a whole is becoming more adept at engagement. Even from an association perspective, we’ve found more and more attendees and participants are sharing what they are seeing and learning on social media from the various programs we produce each year.
As I mentioned in Chile, food is an integral part of the cultural currency on social, and gives our industry a direct connection to the shoppers who consume our products. More and more produce marketers are leveraging the opportunities on platforms like Instagram to build and strengthen those direct connections. Not only does it give brands access to those shoppers, it also gives them control over their story. And that’s an area where the produce and floral industry could expand upon through the use of social media, particularly videos: telling the stories of their products, how and by whom they were grown, the faces and family behind the food.
On Facebook, food is the number-one consumed video. It’s been found that viewers retain 95% of a message when they watch it on video, compared to 10% when reading it. This presents a wide range of opportunities for our industry to grow.
To reach consumers, businesses should strive to offer interactive experiences – whether through in-person engagement or via technologies like augmented reality. They should also consider pairing cultural trends with marketing opportunities that make sense for consumers.
This idea of connecting our industry with cultural trends is a key part of PMA’s plans in the year ahead. We will be part of the education program at the South by Southwest (SXSW) festival in Austin, Texas, in March, where we’ll help shape cultural conversations and influences by sharing the incredible work our industry does every day with a global audience.
Over the next few months and years you will see that PMA and our industry is not only better represented in those conversations, but ultimately, leading them — and not only within our industry, but wherever important conversations about the world’s food supply are taking place.
FFP: You have spoken about the growth of the e-commerce sector around the world – what do you see as the biggest opportunities this growth is opening up for the global produce industry?
CB: Growth in e-commerce worldwide presents opportunities for our industry to reach more consumers; however, the biggest challenge is ensuring that the fruits and vegetables purchased online arrive in at the consumers’ door with the utmost quality and care. Studies have shown that disappointment with the freshness and quality of produce bought online is the biggest barrier to future online purchases. That said, the supply chain continues to invest in new technologies to monitor and control quality issues to ensure consumers have a good experience with the produce they have bought (either online or in-store).
FFP: What do you see as the biggest trends related to fruit and vegetable marketing in the Chinese market? What lessons could other countries take from China in terms of marketing produce?
CB: Online retail in China continues to grow significantly, for both global imports and domestic food items. Mobile e-commerce currently accounts for 51 percent of all online sales in China.
Chinese consumers tend to spend more on higher-priced products and prefer brands that deliver safe, reliable, quality foods. E-commerce gives brands easier access to consumers without the usual barriers of distribution challenges. This also allows smaller brands to find uniqueness of their themselves on equal footing with large brands.
Storytelling in marketing efforts is one way to reach young Chinese consumers, who make their choices based on an array of information. It is critical for brands to get their message across to consumers, such as creative stories about brand history, the uniqueness of their products, and even the brand’s Chinese name and logo design. In addition, social media engagement with consumers, such as WeChat campaigns and live broadcasting with key opinion leaders, have become more popular in China – with many audiences watching these
events from their mobile devices.
FFP: What do you think are the biggest opportunities for the global produce industry from the growth of Asian markets like China?
CB: China’s economic growth and growing middle class have made it a very attractive market for countries around the world. As this development continues to the second and third-tier cities in China, the market potential increases. But China is not the only game in town. The 11 countries of Southeast Asia represent 622 million consumers, with an expanding middle class. PMA is currently pulling together research on these markets to share with members.