Beefing up export efforts
The Apple Commission will promote Granny Smiths in Mexico this season (left), and run a Red Delicious campaign in Indonesia to coincide with the holidays (right).
In line with the renewed Washington Apple Commission mandate to focus efforts on international marketing, the commission this season is using more than $500,000 of an additional federal Market Access Program funding allocation to beef up efforts to move specific varieties and sizes in key export markets.
Approximately one-third of the Washington apple crop is exported every season to over 60 different international destinations. The Washington Apple Commission contracts with 13 in-country representatives to implement branded promotions for both the consumer and importer, wholesale and retail trade in the 27 most important markets. Although Washington apples have been exported since the 1960s, it wasn't until the availability of federal export assistance funds and increased export shipments in the mid-1980s that international promotions became a larger part of commission activities.
Although some of the early export markets such as Scandinavia and Brazil are no longer part of the program, new markets such as India and Russia have taken their place. To date, an estimated $90 million of both industry and federal dollars has been invested in the promotion of the Washington brand beyond U.S. borders.
Since the reorganization of the commission in 2003 in response to a settlement that eliminated the the domestic Washington brand promotion activities, international promotion has been the sole marketing activity for the organization. The assessment dropped from $0.25 per box to $.035 per box, and the federal Market Access Promotion program (which is part of the Farm Bill) became the major funding source for international promotions. Currently, MAP funds account for 72 percent of the export promotional program expenses and 96 percent of direct marketing activities.
The international marketing program at the Washington Apple Commission spans public and private sector activities. In order to receive MAP funds, commission staff, with the assistance of contractors, must create and submit marketing plans showing market assessments, strategic goals, and details of individual marketing activities, as well as provide an annual review report for each market to the Foreign Agricultural Service, which is responsible for administering the MAP program. Restrictions on usage of the funds means that industry dollars are needed for some types of expenses and activities (such as prizes for retailer display contests).
In order to be responsive to industry needs, the marketing programs must also try to coordinate with specific industry goals, both long term (development of markets for varieties such as Granny Smith, Gala and Fuji) and short term (increase in volume movement for small-size Red Delicious this season).
The commission's efforts to improve the export program have resulted in steady increases in funding over the past five years. For the current season, the commission netted a 20 percent increase in baseline funding due in part to additional MAP allocations for the horticultural division. This increase is well-timed, as the record crop of almost 113 million boxes will require substantial increases in export shipments. In anticipation of this need, over $500,000 was held back from the initial budgeting process in August 2008 in order to assess the situation after harvest and determine targeted spending goals.
The commission's foreign trade committee met in mid-November and directed the commission to concentrate funding on markets such as Mexico, where this funding will be used to implement more than 4,600 additional in-store samplings, including a Granny Smith promotion in late winter that will feature Grannies with chimoy, a tart/spicy sauce that is a kid favorite.
Another market that will receive additional funds is Indonesia, where the "Red" campaign will target Christmas, Chinese New Year in late January, and Valentine's Day with in-store displays and activities designed to increase volume sales. India, where 90 percent of apples are sold through small, road side vendors, will implement a wholesale market coupon promotion designed to increase shipments of small Red Delicious to the south India region. A total of ten market regions received additional funds for specific promotions targeted at industry needs this season.
With new President Todd Fryhover heading the commission, effective January 1 this year, one top priority for the organization will be increasing outreach to both growers and sales desks. Several projects are planned to allow better and more timely communication of commission activities, including a grower e-newsletter. Washington apple growers who are interested in receiving the newsletter, which will highlight commission activities and topics of interest, can sign up by sending an e-mail to Executive Assistant Danelle Trovato at Danelle .firstname.lastname@example.org.