Commodity boards come in a range of shapes, sizes and purposes, but they share a focus on helping retailers build sales.
By Carol Radice
Want to know how a certain fruit, vegetable, meat, dairy or seafood commodity fared last year? Curious about pricing trends? All this information and more can be found under one roof courtesy of commodity boards.
Often operating behind the scenes, commodity boards are the eyes and ears that represent growers, shippers and packers, offering retailers professional marketing and promotional materials.
Here’s a look at some key commodity board and what they report about last year’s growing season, the factors that will influence pricing this year and their expectations and marketing plans for this year.
Apple of their eye
The fortunes of the apple industry are linked to the overall economy, according to Jim Allen, president of Fishers, N.Y.-based New York Apple Association (NYAA).
“Along with the economy, the apple market tanked in mid-October ,” says Allen. “The estimated national apple harvest exploded to near record numbers, FOB and delivered prices plummeted, while retail prices remained high. As a result, movement slowed and inventories backed up.”
For all these reasons, Allen says the 2009 season started under stress. “The Eastern apple crop was above anyone’s estimation and while the West had a good crop, they had a large carry over from 2008,” he says. “The good news was that movement was above average because of lower price points at retail. Exports were up and Eastern volume was way above average for supplies and movement,” he says.
As a result, retail prices in 2009 reflected much lower levels. “Consumers responded and sales were up. Also value packs of apples and large family packs that help reduce price-per-pound were moving well,” says Allen. The industry was helped by retailers’ willingness to promote and advertise apples, he says, adding that if this trend continues, apple movement should sustain high levels through much of 2010.
Looking ahead, Allen says his group will continue to offer a tool chest of promotional programs to help grow New York apple sales, including in-store demonstrations, display contests, retailer advertising support, cause marketing promotional with the American Cancer Society and special incentives to encourage customers to purchase New York apples. “As our resources expand we are using those funds to expand our markets with new programs,” says Allen.
Potatoes push ahead
Apples were not the only commodity to experience ups and downs. It was a very unusual, but exciting year for the potato industry, says Seth Pemsler, vice president-retail/international for the Idaho Potato Commission (IPC), based in Eagle, Idaho.
“At the beginning of the year the recession actually stimulated more retail volume of potatoes,” says Pemsler. “At the onset of the harvest, we saw a rapid decline in price, based on the perception that the crop would be much larger than the past. While the harvested crop is larger, the trends within the industry are positive and the potato category experienced double-digit growth, 11% by volume between April and September of 2009.”
In an effort to help move the large crop and communicate the value Idaho potatoes offer the consumer, the IPC initiated numerous retail promotions, in addition to its national TV advertising and public relations efforts.
Retail advertising also showed a marked improvement early in the year, according to Pemsler. He says Idaho potato advertisements, through the end of the 2008 crop (September 2008 to August 2009), were up 36% versus the prior year.
“The Idaho Potato Commission (IPC) kicked off the year with two very large and very successful retail promotions with Publix and H-E-B,” Pemsler says.
Looking ahead, IPC officials anticipate Idaho potato sales to be consistent and healthy throughout 2010. In support of this effort, the IPC launched a “Spudtacular” bin promotion for all bagged product for the month of January. February is the IPC’s “Potato Lover’s Month Display Contest,” now in its 19th year.
“All indicators point toward 2010 being a good year for both retailers and the potato industry, with potatoes helping offset some of the other struggling categories in produce,” he says.
Wild for seafood
Despite a small amount of cyclical fluctuation, thanks to Alaska’s sustainable management practices, Alaska’s wild seafood stocks are as strong as ever, says Larry Andrews, retail marketing director for the Alaska Seafood Marketing Institute based in Seattle. “When you are dealing with a wide variety of wild capture fisheries, as we do in Alaska, there will always variations in how much is caught and that’s exactly what we saw last year,” he says. “The declines can be attributed to reductions in whitefish harvest quotas.”
Andrews says that Alaska remains the leading source of wild seafood harvested commercially in the U.S., providing roughly just over half of the total U.S. wild harvest, by volume, each year.
“More people are eating at home and perishables, including seafood, have become one of the most productive departments at retail, a fact backed up by Nielsen research. Increasing consumer health concerns have pointed shoppers in the direction of seafood, as well as toward products with more natural and wholesome nutritional profiles,” says Andrews.
ASMI officials say the board’s role is to promote the promise of “Wild, Natural & Sustainable Alaska Seafood.” At the retail level, this effort takes the form of adding value to Alaska seafood products and educating consumers on the benefits of finfish and shellfish from Alaska, including salmon, halibut, cod, pollock, black cod, crab and scallops.
This year, ASMI will be expanding its “Cook It Frozen!” program efforts. “With sales of frozen seafood on the rise, the program provides easy-to-follow instructions and dozens of recipes for cooking frozen wild Alaska seafood portions quickly and conveniently, without thawing. The program includes POS materials, training and support, including the “How to Conduct a Cook It Frozen! In-Store Demo” video and a newly redesigned consumer website (www. CookItFrozen.com).
Sweet onion success
In 2009, the economy was less of an influence on sales than the weather was for Vidalia onions, according to Wendy Brannen, executive marketing director of the Vidalia Onion Committee (VOC). “The size of the crop wasn’t an issue, it was the large amount of rain that fell when the onions were due to be harvested.
“Last year nearly all of our growers within a 20-county region faced rain during not one, but both of the harvesting times,” says Brannen, noting that onions are highly prone to rot when they are removed from the field wet. “Typically we can fall back on the second harvest if there are issues with the first and make up our losses, but this is the first time I can recall both harvests being affected,” she says. “There’s nothing more humbling than Mother Nature.”
Weather could impact the 2010 crop as well, she says. “While it is definitely too early to predict how the crop will turn out with any accuracy, we saw an unusual amount of rain during planting season,” she says.
From a marketing perspective, the VOC has signed a partnership with Dreamworks and will be using the Shrek character in its national marketing this year. “We’re calling it our ‘Ogres and Onions’ campaign which we anticipate will appeal to both moms and kids. We’re hoping by putting such an adored character on our packaging and POS materials that will attract the younger kids in the produce aisles,” says Brannen.
Eleisha Ensign, executive director with TexaSweet Citrus Marketing based in Mission, Texas, says 2009 ended on a favorable note for fresh citrus fruit grown and produced in Texas and in the lower Rio Grande Valley in particular. “Size wise the season is comparable to the one before it and we were fortunate that no major weather issues affected our crops,” she says.
Ensign says TexaSweet Citrus Marketing is introducing several new programs in 2010. Since promotion is a central focus of the organization, it will have free materials for retailers, teachers and foodservice directors available on its website, www.texasweet.com.
Ensign says her group will also be attending a number of events to promote Texas Citrus.
TexaSweet Citrus Marketing is also reaching out to chefs to educate them about the versatility of the Rio Star grapefruit. “We will be attending several culinary events including the American Culinary Federation Western Conference in February,” says Ensign.
Also new in 2010 for TexaSweet Citrus Marketing is marketing of a more personal level through their new blog (www.kymberlyskitchen.com). “Our merchandising coordinator will be doing a recipe challenge in which she prepares recipes in her home kitchen from our recipe contest held last year. We are reaching out to consumers and showing them how fun and simple it is to cook with citrus,” says Ensign.
This has been one of the cleanest pear crops in many years, says Dennis James, director of marketing for the Pear Bureau Northwest based in Milwaukie, Ore. “There have been some surprises along the way, but they have been good ones. Happily this is one of the largest and good looking crops we’ve had in a while,” he says.
As retailers have gotten more aggressive in their attention to the category, James says the timing for a large crop couldn’t have been better. “Retailers have come to realize they needed to step up their promotional efforts to better take advantage of the opportunities for increasing pear sales,” says James. “As a result, they are working harder to make pears more a profitable commodity by aggressively promoting pears and giving them more prominent placement.”
The Pear Bureau Northwest will continue focusing on and investing in marketing geared toward “viral” outlets to attract younger consumers, according to James.
Building strong sales
According to Miranda Abney, senior marketing manager for Washington, D.C.-based MilkPEP (Milk Processor Education Program), there are many new changes, programs and partnerships on tap for the commodity in 2010. Known for its “Got Milk” campaign, the commodity board was formed in the ‘90s to create an educational/image campaigns to enhance milk’s image and establish it as a competitive player in the world of beverages.
As she explains, Milk’s new 2010 marketing platform, “Building Strong Families,” harnesses the power of nutrient-rich milk as a vital component in promoting the importance of families serving milk with meals, while generating increased sales for retailers beyond the dairy aisle through cross-promotional opportunities with well-known national brands. “The fully integrated campaign offers point-of-sale materials, event toolkits and public relations support as well as national print and television advertising,” says Abney. Recognizing that milk consumers are ethnically diverse, the “Building Strong Families” campaign also includes support for the Hispanic audience.
The in-store retail promotions running from spring to summer include:
March: Milk the Moment. Celebrity chef Tyler Florence will encourage moms to set the dinner table with milk. POS in stores will drive consumers online to win prizes instantly.
July: The Pure Joy of Milk. Everyone loves milk and cookies. For the June/July Summer Snack promotion Milk is teaming up with Oreo. There’ll be savings for customers online and in store, plus a photo contest for the chance to appear in a Milk Mustache ad.
August: Building Strong Families. This is a natural extension of the back-to-school season, with a focus on milk’s vital role at breakfast.