How We Grow

2021 May/June How We Grow

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maintain demand that has already been established in a country versus growing new demand. The most critical element to this process is an annual review of the markets, which looks at consumer, shipment and market trends. This analysis provides an overview of each market in three key areas. The first, and arguably most important area of analysis is size and growth potential. This takes into account the current size of the market as it relates to almonds as well as growth projections. The second area is environment and preference, which considers factors such as the regulatory environment in a market and how health trends are impacting the market. The third area is ABC's relative ability to impact. This area looks at almond experience in-country, the Almond Value Quotient (looking at almond health and snacking perceptions among a country's consumers) and purchasing power, or a consumer's ability to purchase goods and services. From there, GMDC and ABC review the markets to identify and prioritize those that will provide the greatest return on investment to you, the California almond community, yielding a balanced market portfolio. Strategy propels success One important component that came out of the work with Deloitte was to identify categories with the greatest potential. Prior to 2011, marketing efforts were spread across a few ingredient categories such as cereals and bars. However, in 2015, GMDC and staff aligned to narrow our focus to snacking, which showed the potential to move the greatest volume of product – there are a lot more almonds in a handful of kernels versus an energy bar, for example. This decision to shift to snacking paid off brilliantly as California almonds have moved with the tailwind of the explosion of snacking across the globe. The focus on snacking also naturally provided a halo for other forms and uses of almonds. However, the team is continually watching this trend to determine if at some point a shift away from snacking makes sense in any of our markets. More recently, the annual review process led us to be progressively more bullish in India. As we look at India, there is no debate among staff and GMDC that it has shown – and continues to show – much upside potential. China also continues to be viewed as a promising market in the long-term. In fact, an analysis of shipment trends shows that China was growing at a strong rate prior to the imposition of retaliatory tariffs. As GMDC and ABC staff evaluate Chinese market potential, we've agreed that now is not the right time to increase our investment in China; however, when conditions improve, we expect the emphasis in this market to increase. ABC and GMDC also need to look at protecting existing demand in countries like the United States, where people are annually consuming close to 800 million pounds of almonds and growing. Considering the U.S., in particular, we are working to both protect existing demand and stimulate new demand. For instance, Information Resource, Inc. (IRI) Panel Data from January 2021 shows that millennial households purchase 44% less almonds (in kernel form) as a snack than boomer households and 18% less than Generation X households. This highlights the importance of our Generation X and boomer households as well as the upside potential among millennials. To help grow demand for almonds as a snack among millennials, we are currently going through a creative development process to explore how to optimize our advertising campaign to reach this consumer audience. Stay tuned for updates here! Check out some of the ABC advertisements from around the world on the front and back cover. Conducting Exploratory Market Assessments The Almond Board periodically conducts Exploratory Market Assessments to consider new markets that demonstrate promise for building almond demand. In 2017, ABC visited the following countries to direct assessments: Japan Mexico Indonesia Saudi Arabia Italy Brazil Southern Cone (Argentina and Chile) As a result of this work, three markets were added to ABC's market portfolio in 2018: Mexico and Italy, which were new markets, and Japan, which was added back to the portfolio. In CY 2021/22, we will add the Southern Cone as an exploratory market. Review of Markets Size and growth potential Environment and preference ABC's relative ability to impact Almond Board of California 8

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