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Chilean promotion strategy deep and wide

by Tad Thompson | January 09, 2011
With shiploads of fresh Chilean fruit headed to U.S. seaports, "Our responsibility here is to make sure there is a home for the fruit when it arrives," said Tom Tjerandsen, who spoke from the Sonoma, CA, headquarters of the Chilean Fresh Fruit Association.

Mr. Tjerandsen, managing director of North America for the Chilean fruit promotion group, said that one of the association's high-profile marketing tools is an aggressive television advertising program that is scheduled to run from the third week of January into April.

Mr. Tjerandsen said that the TV advertising will run in 40 spot markets around the United States. This coverage is expected to be viewed by 83 percent of the nation's households. This advertising series will be "retailer- tagged," meaning that retailers who participate in particular weeks receive television advertising support in their marketing area, with taglines at the end of the ads directing consumers to buy Chilean fruit at that particular chain.

The association operates with a total annual promotional budget of about $3.5 million.

Mr. Tjerandsen's group this winter is also sponsoring a national two-month in-store radio promotion. As shoppers listen to a special radio network broadcast through the stores, "every 20 minutes the music stops and sends consumers to buy Chilean fruit in the produce section," he said.

Retail promotions have long been the primary target of Chilean fruit promotions. But Mr. Tjerandsen said that "one of the fastest growth areas for us in sales is the foodservice industry." Association merchandisers are working directly with foodservice distributors, and "we are also developing business in those channels through work with menu developers, planners and chefs."

Foodservice interest in Chilean fruit has grown in large part because Chile is a sector of a global fruit industry that now can provide menu planners with a 12-month seamless supply of "a number of items," he said. "That is pretty big news to a lot of people in the foodservice industry. This is an area of special focus for us. We are seeing great strides forward there."

Mr. Tjerandsen said that foodservice distributors "for years hated produce," adding that one large national distributor "refused to handle anything" except for the largest accounts "unless it was heads of lettuce. Then the small specialty foodservice distributors became very big."

For newly arrived distributors, the produce category "became virgin country," he added. "The salespeople could sit on the phone all day and write what was ordered" by foodservice outlets. "No one ever challenged them to see if they could actually try to increase their produce business." Then Chilean fruit merchandisers created sales contests to see which distributors could show the largest percentage of increased sales over the previous year.

That "modest investment created major returns," Mr. Tjerandsen said. "We've seen tremendous growth in volume" of foodservice industry sales.

On the retail sales side of the business, the Chilean Fresh Fruit Association for the last two years has purchased national data collected from retail sales scans. Mr. Tjerandsen had "two conjectures" that were each verified by national retail sales data.

"One was that people who bought Chilean fruit tended to pay more for fruit and the shopping basket total was greater" by a factor of 1.5. If retailers can increase "their volume by 50 percent, that is fabulous." Hard numbers also showed that "the people who bought Chilean fruit had a larger purchase ring." A second conjecture was also proven correct: "People who bought Chilean fruit tended to buy higher margin items."

Now the association's merchandisers can tell retailers that "it is productive to have Chilean fruit purchasers" within their clientele because these people buy more food and buy high-profit items.

This information is now being printed by the Chilean fruit marketers. "We are in the process of bringing this to retailers' attention," said Mr. Tjerandsen. "This is a shopper they ought to be going for."

This also addresses "the age-old question of there only being so many advertising dollars." When retailers have many wintertime produce items to advertise, they have said, "Give me a reason ... to advertise Chilean fruit. Now we have an answer."