DRIVING LEMON DEMAND. Building Effective Sales and Marketing Plans Kevin Fiori. August 25, 2014 PRODUCE MARKETING ASSOCIATION
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1 DRIVING LEMON DEMAND Building Effective Sales and Marketing Plans Kevin Fiori August 25, 2014
2 Agenda Issue Lack of international lemon demand Lower demand in existing lemon markets North America and Japan Lack of use in many export markets Ad pricing had no impact on demand Actions: Determine what factors influence demand Share findings with stakeholders Take appropriate actions
3 Fresh Lemon US Per Capita Consumption Lemons Limes
4 Determine what factors influence demand Contracted Dr. Albert Kagan Research Professor of Business and Director of the Business Research Center from Arizona State University Expertise is agribusiness Focus of Study Supply Quantities of goods with respect to their prices. Demand Pricing of goods with respect to their quantities. Elasticity Sensitivity of pricing when quantities change.
5 Initial results of sell through data The calculated elasticity for all fresh fruit is Lemon elasticity equals Demand is very inelastic which means that a substantial change in price would not have a significant impact on demand Conduct a more detailed study to show the effects of complementary products Results or study: Lemon demand is subject to a secondary demand effect from other consumable products. Consumers don t eat lemons, but use them as an ingredient or flavor enhancer Identify main drivers of lemon demand
6 Lemon Consumption This model indicates that for every dollar increase in expenditures of food consumed away from home in U.S. per capita consumption of fresh lemons will increase by 0.02 pounds (assuming the rest of the factors constant). This reinforces the concept that lemons are very inelastic Big change in lemon price Old Price New Price Q1 Q2 Little or no change in quantity of lemons sold
7 This is a two step process. Step 1 Elasticity allows for the identification of the relationship between the driver of demand (fish) and the lemon quantity demanded (not the lemon price at this stage) For elasticity the interest is on determining the lemon quantity demanded NOT THE decline IN PRICE Elasticity Step 1: Determines Quantity of Lemons Demanded trough cross price elasticity
8 Actions Following Study Share finding internally Redesign and implement sales and marketing plans to build demand Price This becomes a lower priority in building demand Product Align with primary drivers of demand» Fish, liquor, water, lemonade Promotion Cross promote with the primary drivers Placement Place product next to the primary drivers People Align Sales and marketing staff s activities consistent with findings
9 Recipe Ideas and Uses
10 Recipe Ideas and Uses Promote on social media with Sunkist fans, followers, and pins
11 Mixology with Sunkist Position Sunkist citrus as a enhancement ingredient for beverages: Explore partnerships with beverage brands Build relationships with trendy mixologists for traditional and online media coverage Satellite media tour to promote entertaining
12 Holiday Entertaining with Sunkist Satellite Media Tour Mixologist to show how Sunkist citrus enhances beverages Placement in over 20 TV and radio programs in 170 cities 10.7 million impressions
13 Sunkist Hot Lemonade/Korea Street vendors in high traffic locations Warming up with hot lemonade during the cold winter season
14 Lemon with Korean Soju Sampling Soju with fresh squeezed lemon juice Lemon Soju kit: Sunkist lemon, juicer and recipe leaflet
15 Marinated Lemon Yuzu Tea A traditional hot and healthy tea with marinated lemons in Korea and Japan
16 Target: Influential RDs in mid-july Communicate the health benefits of fresh citrus to RDs and their thousands of followers
17 S alternative Awareness Educate consumers to use fresh citrus healthy flavor alternative to salt as a Partner with Johnson & Wales University (Culinary and Hospitality Institution) with research and recipes to promote the health benefits of reduced sodium consumption
18 Target: Foodservice Chefs Target: Corporate foodservice chefs to promote more fresh lemon use Inspire and create media content for fresh lemons
19 The Biggest Loser Popular Weight Loss Network TV Show Retail Tie-In with Sunkist Lemons and Grapefruit Packaging, In-Store Displays and Signage
20 Promo: Biggest Loser Displays & Packaging
21 Trade Advertising
22 Water & Lemon Signage & Display
23 Secondary Displays
24 Seafood & Beverages
25 Promotions: Baby Lemons
26 Foodservice Trade Advertising
27 Sunkist fresh-squeezed lemonade kiosks Currently in 5 regional amusement parks Expanding to 16 in 2014
28 The Result
29 Fresh Lemon Per Capita Consumption
30 Key Learnings This study is about lemons but its learnings are transferrable to all varieties Consumers won t buy a variety if: They don t know what is it? They don t know how to use it? It isn t convenient to find and/or available in retail stores or restaurants? Market development and expanding usage via recipes and effective marketing campaigns are essential to expanding produce demand Our industry s future is dependent on moving from transactional to fact based sales and marketing. This is true for new and existing varieties
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