Industry conference highlights: Innovation

13 Oct 2014

The recent industry conference featured a fascinating marketing session focused on innovation. It underlined that while innovation is key to the launch of new products, it goes much further. Innovation, supported by collaboration, has played an important role in taking our industry's knowledge acquisition and management to new heights. Take a look at the highlights below, or access the full presentations by Darren Burton and Lynne Ziehlke.

KNOWLEDGE IS POWER

The Australian macadamia industry has a suite of data, insights and intelligence that is unparalleled by any other Australian horticulture industry or macadamia producing origin.

However this wasn't always the case.

Six years ago, a major shift occurred in the way information was collected, reported and applied. The industry collaboratively developed a number of world class information systems which now benefit all industry participants.

Two key projects showcase the superiority of these systems:

1. Australian Macadamia Handlers Association (AMHA) data collection
2. Consumer research

The information generated by these two projects has provided the industry with enhanced knowledge, allowing it to make better decisions to bring about improved stability and profitability. Collaboration was critical to both of these projects; without it, neither would have proceeded.

AMHA market data collection

After a significant drop in the price of macadamias in 2007, it was evident that the Australian processing sector needed more accurate market information.

At that time processors lacked accurate information regarding volumes of carry over kernel in inventory, shipments into key markets, forward contracts and uncommitted stock. Furthermore, there was no way to provide an objective crop forecast as the season progressed.

In 2008 the Australian Macadamia Handlers Association (AMHA) was formed with the primary goal of developing an industry-wide market data collection system and 2014 marks its sixth year.

All 11 major Australian processors are contributing members, representing 90% of the total Australian crop. It is an autonomous organisation, funded by annual subscriptions paid by its members. Members contribute data on a monthly basis to a central database and key data now available to the processors includes expected total crop production for the year, carryover stock from previous season and year to date crop intake, to name just a few.

Processors now have access to accurate and timely market information and this has been a game changer for the industry.

One of the critical figures is the carryover stock from one year to the next. The processing sector can now monitor the build up of stock levels across the industry on a monthly basis, triggering action if required. If stock levels become too high, the marketing committee will implement programs to increase demand.

Having access to such reliable and accurate information on a consistent basis has strengthened our position as the premier producer of macadamias across the globe. As a result of the success of the AMHA data collection, an international data collection project has been developed, with most major producing nations now contributing data on a regular basis.

Consumer research: driving market development

The use of market research has transformed the effectiveness of the Australian industry's market development programs.

Six years ago, the marketing committee of the time undertook a comprehensive process to determine which countries presented the greatest opportunities for growth over the next five to ten years.

At the time we had four core markets that consumed over 80% of our total production.

While these four markets would remain our major markets in the short to medium term, they were unlikely to absorb any growth in production, so the development of emerging markets was essential.

A mass of information was analysed to determine which emerging markets held the most potential, and this process reached two conclusions:

1) There were really three core markets, being Australia, Japan and Germany
2) Three emerging markets would be the key to our industry's future over the next five to ten years - South Korea, Taiwan and China

The next stage of the process examined our promotional strategy and while the conclusions and recommendations signalled the need for a new direction, first it was necessary to gain a detailed understanding of our consumers in our overseas markets.

The Japanese market became the subject of our first international consumer research project. The results were highly insightful and provided an unprecedented level of understanding of our Japanese consumer.

Armed with this fresh knowledge, we were able to develop a targeted promotional campaign and create opportunities for all the individual sellers of Australian macadamias in Japan to have a new conversation with our customers. Essentially, we gave the Japanese market a reason to get excited about the potential of macadamias once again.

Our first consumer campaign in Japan was built around a digital platform using influential bloggers and social media, with content focused on taste, health and beauty. The campaign was very successful and since 2008, the Japanese market has experienced solid growth, with sales volume increasing by 35% while sales value increased 79%.

Since then, the Australian macadamia industry has undertaken consumer market research in Taiwan, Korea and China, and all three emerging markets have displayed very strong growth.

Results through collaboration

The wealth of knowledge that now exists is directly attributable to the exceptional level of cooperation that is a cultural hallmark of our industry. From growers sharing their experiences with each other to processors participating in the marketing program, ours is an industry where everyone is willing to work together for the greater good.

We now have a range of information systems across growing, processing and marketing that benefit all industry participants, and our five year core objectives of reduced price volatility and value growth that exceeds volume growth have also been achieved. These outcomes were made possible through strong and innovative leadership, trust and most importantly, collaboration.

Categories: innovation