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RETAIL VIEW: Ethnic marketing good as gold for kiwifruit marketer

VANCOUVER, BC -- When Karen Brux moved back to the United States from Taiwan in 2002, she had the task of selling gold kiwifruit to the North American retail market. She relied heavily on the knowledge garnered while living and working in Asia for the previous decade.

Ms. Brux, who is general manager of Zespri International North America, based in Redwood City, CA, knew that Asians, and particularly Chinese people, love the gold-flesh kiwifruit and buy it in large volumes. She also knew that worldwide demand for the New Zealand fruit exceeded supply and that the amount she had to sell was very limited.

In fact, there was not enough fruit to go around, so the Zespri executive hatched a plan to concentrate almost exclusively on the Asian market at the outset.

She conveyed this story of marketing to this ethnic minority during the Trends & Opportunities of the Ethnic Market -- The Fastest Growing Produce Market in Canada business session May 13 at the Canadian Produce Marketing Association convention, here, and then elaborated in a separate interview with The Produce News.

Her knowledge of the Asian market in North America (including being fluent in Mandarin) told her that the Asian community could be reached in a very cost-effective way.

"There are Asian retailers and media that cater to the Asian community, so I suggested [to company officials] that we go after that segment," she said. The idea was adopted, and Zespri began with the 99 Ranch Market chain in Los Angeles. Using the Asian-centric media, in-store displays and an advertising agency that works in that community, Zespri promoted heavily to that ethnic group.

Ms. Brux said that buying advertising space in the Asian media is very reasonably priced, and editors and news broadcasters are very amendable to giving editorial space as well.

Hence Zespri's efforts received lots of ink and airtime. In addition, she said that Asian retailers are also open to building large displays and allowing the promoting group much leeway. "You don't have all the rules and policies that you have to deal with when you are promoting in a large [conventional] chain."

After starting with the 99 Ranch Market chain in Los Angeles, the promotional efforts branched out to the chain's markets in Northern California, and then eventually Zespri launched similar campaigns with Asian retailers in other U.S. and Canadian cities.

In both Canada and the United States, Asians have tended to migrate toward the larger cities. And where their numbers are large enough, they have created their own media outlets and retailers.

Ms. Brux reiterated that reaching this market can be done in a very targeted and efficient way. The Asian population in Canada is exploding, with some estimating that it will represent more than a quarter of the population within two decades. Already Vancouver and Toronto have very significant Asian populations.

Ms. Brux told the audience at CPMA that the effectiveness of the strategy is evident in the numbers. "People ask me why are we spending all of our time with retailers that might only have 10 or 20 stores when we can go to a large retailer with 1,000 or 2,000 stores," she said. "It's because we are selling a lot more fruit to the smaller retailers."

Ms. Brux did not want to release exact numbers on sales volume, but she said that one Asian chain is currently selling close to 30 percent of the gold kiwifruit allocated to North America. That Asian chain, with about 25 stores, sells 10 times more trays of gold kiwifruit annually than the larger chains in North America that have literally 1,000 more stores, she said. And the marketing of the gold kiwifruit has also led these retailers to start pushing the more abundant green New Zealand kiwifruit as well.

Currently, Zespri still allocates only about 500,000 trays of gold kiwifruit to North America, so Ms. Brux said that the Asian-focused strategy will continue. While she has received some inquiries from other produce marketers about Zespri's Asian efforts, the marketing executive who has become somewhat of an expert on promoting to that community did express surprise that she has not received more inquiries.

"There are only two of us in North America [working directly for Zespri]," she said. "I don't think people know we are here."

Nonetheless, Ms. Brux did give the CPMA audience some tips for marketing to the Asian community:

* Understand who your audience is, as not all Asian demographics are alike. Find an Asian ad agency to help you, and do not try to run the campaign in- house or use an agency unfamiliar with that market segment.

* Do not translate material developed for the Caucasian market, as that does not work. Create fresh materials for the Asian community.

* Research the media that are available to you for the community you are trying to reach.

* Develop promotional programs around the Asian holidays.

* Work with experts in that community and have faith in their knowledge. It is an entirely different marketing segment, and your instincts based on the non-Asian market are not accurate.

Ms. Brux told the audience that Asian consumers are very loyal to their own retailers and do not frequent conventional stores when given a choice.

Of course, a significant reason for this is the pricing structure at the retail operation. She said that Asian retailers tend to work on a 25-30 percent markup, which means their products, such as the gold kiwifruit, will be priced much lower at an Asian chain compared to the conventional retailer down the block. This is also a reason why gold kiwifruit flies off the shelves in the Asian markets.