Australian pears show promise in IndonesiaExport & Market Access
Marketing a mix of pear varieties under a broad Australian Pears brand has the potential to boost sales in the rapidly-expanding market in Indonesia, a levy-funded export marketing pilot has shown.
Goulburn Valley-based Fruition Marketing and Plunkett Orchards, and Indonesia-based Morelink Asia Pacific, worked with local importer Mulia Raya in April and May this year to build awareness of Australian pears and retailer relationships towards gauging opportunities to expand exports into the key market.
A multi-variety offering, backed by promotions, drew good interest from retailers and customers alike demonstrating commercial opportunities exist.
Five European-style pear varieties grown in Australia – Packham’s Triumph, Beurre Bosc, Red Sensation, Corella and Josephine – were promoted in key Indonesian retailers Hypermart and SuperIndo, backed by a programme of in-store samplings, store promotions and a social media campaign.
The pilot was funded by Hort Innovation using the pear marketing levy. It was a successful proposal in an open tender call last year for partners to demonstrate commercial opportunities for Australian pear exports in markets identified as ‘prime prospects’ in the levy funded Apple & Pear Industry Export Development Strategy 2017-2022, which set a goal of exporting 10 per cent of Australian apple and pear marketable yield by 2027.
The Export Strategy estimated there was potential to more than double pear exports to 12,300t by 2020, a goal reached in the 2017/2018 financial year, when industry data shows Australian pear exports totalled 12,467t (Global Trade Atlas data).
The strategy mapped a path to growing exports through a focus on high-value varieties, targeted at niche and neighbouring markets and seasonal opportunities through programmed, ongoing sales contracts managed by collaborative and globally competitive export supply chains.
The levy funded pilot was expected to develop functional models of working with:
- In-country brand marketers (for relevant varieties)
- Seasonal windows of opportunity identified in the market development strategy
- Global supply arrangements with foreign retailers.
Fruition Marketing manager Owen Carter said offering a mix of green, brown and red pears under one brand had broadened the appeal to both retailers and consumers. Staggered promotions had ensured Australian pears were given shelf space for a longer period.
“Indonesia is one of our best opportunity for pears,” Owen said. “It is our closest market, there is a well-established European pear market and Australia is known for quality. The challenge is competing with cheaper product from other Southern Hemisphere producers. One of our advantages is their shipping time is longer so we can get pears to market in top condition a couple of weeks before them.
“We need to play to the positives, and price is not one of the them.”
Owen said brands were relatively unknown in the Asian market and a single ‘Australian’ brand offered the chance to both strengthen awareness of Australian pears and introduce new varieties.
“We wanted to do something different by offering a branded product, but keeping it relatively broad, rather than just Packham,” he said.
While Packham is the best-known variety and accounted for 60 per cent of sales, Owen said, where in-store sampling was offered, sales of Beurre Bosc came close to matching those of Packham.
“We had very positive feedback, particularly from Hypermart,” Owen said. “Hypermart is setting up an SKU code (shelf keeping unit) for Australian pears, which in itself is a win because they can then range Australian pears alongside those from South Africa.”
The campaign had also attracted interest from other retailers keen to participate next year.
Scale of the prize
Indonesia has a population of 270 million and is already the largest pear import market in Asia, importing 190,000 tonnes in 2018, of predominantly Chinese pear varieties (95 per cent).
It is Australia’s biggest pear market after New Zealand and was identified as one of seven prime prospect markets for Australian pear exports in the Export Strategy.
Indonesia, with a rapidly expanding middle class of consumers with strong buying power, keen to embrace modern western lifestyles, offers a big opportunity for imported fruits as these consumers move up the income ladder.
Australia has a significant share of the Indonesian Packham pear market (2,300 tonnes in 2018). Packham is the most well-known variety from Southern Hemisphere suppliers, but Australian exporters face competition from South Africa (March to August) and Argentina (October to January). The market prefers larger sized fruit (counts 64 to 90). Australia has a good reputation for quality (taste), however it is more expensive than competitors for a similar product.
Australian was the only Southern Hemisphere supplier to increase pear exports to Indonesia in 2018 (up 44 per cent on 2017 figures). By contrast exports to Indonesia from other Southern Hemisphere producers were down: South Africa (-20pc), Argentina (-63pc) and Chile (-100pc). Northern Hemisphere exporters China and India also increased pear exports to Indonesia by 13pc and 50pc respectively (Global Trade Atlas data).
The promotion and merchandising campaign comprised strategic staggered promotional events conditional on three varieties of Australian pears being maintained on retail shelf for longer periods (replacing competitor pears) and maximizing shelf spacing and exposure.
The consumer sales promotion at all outlets involved a mixture of in-store tastings as well as point-of-sale materials. Merchandisers were employed to visit the retail stores and set up the product displays and promotional material.
A range of promotional material was designed and printed in Indonesia with the dual tags ‘Love Australian Pears’/ ‘Pick Me Bite Me Love Me’ and featuring the five promoted Australian pear varieties.
It was tested with importers and retailers during design and received positive feedback as being innovative, appealing and exciting.
In-store sampling in two Indonesian supermarket chains was conducted over six weeks during mid-April to late-May 2019. Providing sampling and information about the fruits helped to increase awareness of the benefits of consuming pears.
A major media and industry campaign launch was held in collaboration with Meat and Livestock Australia (MLA), including a cooking demonstration by Indonesian chef Vania Wibisono which attracted social media interest and online coverage of Australian Pears.
The next steps will be to identify whether the approach of marketing early season Australian pears supported by in-store promotional program can be expanded to other retailers. The more retailers involved the greater the opportunity for Australian producers to lock up retail space from competitors.
Owen said pear consumption appeared to be between eight to 15 containers a week, offering plenty of scope for Australian producers if building the market is successful.
“It would be hoped that we can expand on this early window for Australia to sell fruit soon after harvest thus increasing Australian grower returns,” Owen said.
“There is a market to capture in Indonesia, and it is our closest.”
- Some importers were still holding large stocks of 2018 Packham pears from Argentina and so were reluctant to buy new season Australian pears;
- Some importers said that they prefer to buy the ‘cheaper’ South African Packham pears which arrived at the end of March, giving Australian pears a window of only a few weeks in early to late March;
- At the ‘Love Australia Pears’ launch at Hypermart, importers attending were impressed with the launch, POS materials and range of pear varieties and expressed interest to participate in this campaign next year.
- Indonesian consumers mainly eat pears fresh after a meal (for dessert). They like Australian pears to be sweet and crunchy.
Read more about the recent Pear marketing shake-up.
Industry marketing initiatives are managed by Hort Innovation and are funded by the apple and pear marketing levy. Growers are welcome to contact Apple and Pear Marketing Manager Olivia Grey (firstname.lastname@example.org or 02 8295 2387) with any questions relating to the marketing program.