$6B Export Import Marketing Case Study: California Grapes

This case study examines the strategic use of paid media in key export import target markets for California Grapes. In our work as export marketing partner, our campaigns measurably improved export cost per pound in the face of climate change-induced shrinking inventory challenges. As California’s table grape industry faced the consequences of smaller grape crops due to shifting weather patterns, we devised innovative approaches to grow demand in select markets, boosting profitability and international market share to the greatest extent possible in the face of supply challenges.

This CPG case study studies our successful efforts to optimize export costs, enhance sustainability, and create competitive edge in global export marketing.

The California Table Grape Commission (CTGC) has long been a cornerstone of the state’s agricultural economy. However, the commission, like agricultural marketing organizations worldwide, faces growing challenges in recent years as climate change disrupts traditional growing seasons. This leads to smaller crop yields, or untimely crop deliveries.

With the traditional path to profitability becoming increasingly uncertain, the CTGC needed innovative strategies to remain competitive in the global marketplace while maintaining profitability.

Our client faced a dual challenge: adapting to climate change-induced shifts in grape yields and optimizing export costs to ensure that smaller crop sizes did not result in reduced profitability. To measure Criterion Global’s effectiveness in global export marketing, the standardized export costs per pound for various markets (from the U.S. Department of Agriculture) served as a key performance metric. Although perishables may never become more predictable, we firmly believed our export marketing could improve profit from smaller crop yield in key international growth markets.

This case is an important one on the utility and economic impact of paid media advertising because, in some sense, all brands universally find benefit in selling less for greater value. Conditions surrounding the challenge were as follows:

1. Factors Limiting Inventory (Supply-Side Challenges):
   • Gradual climate change, evident in unseasonable temperatures, changes in humidity, and shifting rainfall patterns significantly affected the traditional grape growing season in California.
   • Additionally, sudden, almost biblical natural disasters – mudslides, hurricanes, fires, floods, drought – wreaked havoc on farmers, creating unpredictable growing conditions.
   • Smaller or untimely grape crops are fast becoming a new norm, posing a direct threat to agricultural profitability. Global export marketing still requires predictability in matching supply to demand.
2. Export Cost Per Pound Analysis:
   • The CTGC recognized the need to maintain cost efficiency in the face of smaller crops. To achieve this, they embarked on a comprehensive analysis of their export costs per pound.
   • Factors contributing to export costs included transportation, packaging, storage, and compliance with international standards and regulations. Inflation markedly played a role in this; As of September 2022, the rate of CPI inflation over the previous 12 months was 8.2 percent, a rate thus far unprecedented in this century.
3. Marketing and Branding:
   • The CTGC leveraged its reputation for quality and sustainability in its marketing efforts, allowing it to command premium prices in international markets, which helped offset increased costs.
   • Working closely with international sales-side market-level import teams, our mandate as export import marketing agency was to focus on brand- and buyer-level retail media. Specifically, our goal was to increase demand at level of the individual grocery shopper in key markets globally.
   • Conveniently for this case study, not all export markets received paid media advertising support. This created a control group of international markets which did not receive international media buying support to compare our efforts against.

In markets as varied as Australia, Canada, Ecuador, Dominican Republic, Guatemala, Japan, Malaysia, México, Singapore, South Korea, and Vietnam, moving the needle in driving demand is a moving target.

So it’s clear that our approach to international media buying was nuanced on a market-to-market basis and used a variety of paid media tactics: out of home, TV, radio, as well as digital. But one important tactic common across markets was the use of emerging retail media platforms to connect on a point-of-sale basis with grocery shoppers.

Although the popularity of retail media networks has exploded in the US and North America, little attention has been paid to emerging retail media channels elsewhere in the world. Our work for California Grapes forged new territory that included first-to-market opportunities to connect with grocery retail shoppers in these critical global markets.

Of this strategy, the client has said: “Reaching consumers at retail stores is a major focus…” of which “Partnering with retailers to get grapes on store shelves and to promote them to consumers” is a key part of its global export marketing strategy.

Retail media is a key channel enabling fresh and CPG brand advertisers to grow premium market positioning – if your global media agency is savvy (patient? crazy?) enough to find these still-emerging white space opportunities.

With our target markets separated from control (unexposed) export markets, we had a means to cleanly compare the year-over-year cost-per-pound impact of our work on export values.

In our target markets, we achieved an average YOY lift in cost per pound of +16.79% – a 3.07% lift versus export markets without our retail media support.

While seemingly modest, this +3.07% lift in cost per pound translates into a staggering +$43.2 million of incremental economic value for the resilient grape growers of California.

And while our media marketing budget is non-public, the return on investment for our international media buying… is profound.