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Horticultural Crops

China Hong Kong Region remains strong for Northwest Cherries with the Aid of MAP Promotional Dollars

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In 2015, Northwest Cherry Growers from five states - Washington, Oregon, Idaho, Utah, and Montana, not only harvested the earliest cherry crop in at least 20 years, with 19,307,244 cartons (20# equivalents), it was also the third largest on record for the Northwest. Only the crops of 2012 and 2014 were larger. With the record early start, the season also ended early, lasting just 81 days. This year’s total crop was down 16.8% in total volume from 2014’s record breaking crop of 23.2 million cartons. The total estimated FOB plant value for 2015 was US$827 million, down just 6.1% from 2014. Exports were 30.7% of the total crop, 5,932,878 cartons with an estimated FOB plant value of US$284.5 million. Exports were down 21.2% in volume but only down 4.8% in FOB sales from the 2014 record crop. Our China Hong Kong Region is our second largest export market now trailing minimally behind the dominating Canada. Our markets ranked in volume in 2015 as follows: Canada, China/Hong Kong Region, Korea, Taiwan, Latin America Region, Japan, the SE Asia Region and Australia, respectively. Not only has this market had consistent growth from an infant market in 2005 to our number two export market, this market is a premium market for our most premium fruit. A normal size cherry for our growers is a size “10 ½ row”. For perspective, the smaller number of row size cherry the larger the cherry actually is. So a 8 ½ row cherry is the largest size cherry we grow and the 12 row cherry is the smallest cherry we ship. In 2015, China imported 92% of 10 row and larger cherries. Breaking down shipments to the region, China imported direct 1,513,307 cartons (up 19.3% from 2014) while Hong Kong imported direct 300,019 cartons, down 61%, of which 60,019 cartons were transshipped to Guangzhou. Park'n Shop and Wellcome, accounted for 69.2% market share, with the remaining 30.8% being sold through wet markets, fruit stores and small retail chains. In China, our integrated promotional program expanded our base consumer awareness into the second and third tier cities. With Market Access Program (MAP) funds added to our growers funds, we conducted consumer promotions in 19 retail chains in Hong Kong and China, totaling 1,721 stores in 51 cities. These in-store sampling promotions helped to educate the consumers about the nutritional values of eating fresh sweet cherries, increased our brand awareness, helped to stimulate sales and provided support to the importers and wholesalers that supply the retail chains. Our promotional PR events were supported by ATO offices in Beijing, Shanghai, Guangzhou and Shenyang with their attendance at the opening ceremonies and their interaction with the media in 5 cities – Beijing, Shanghai, Shenzhen, Wuhan and Dalian. Not forgetting the trend for ecommerce, our cherries ran promotions with ecommerce giants such as TMall.com and Yiguo.com. Sunshine, a major seller on the TMall platform, participated in gaining consumer awareness with a short video shot in Eastern Washington with footage of cherry orchards and packing plants. This one e-commerce promotion helped to increase consumer awareness and generated sales of 75,300 boxes of Northwest cherries. Another 110,400 boxes were moved on JD.com and Fruitday.com. Three additional platforms – Eaemall.com, Womai.com and Benlai.com used the promotion of freshest cherries via air shipments via Shanghai Eastern Airlines Express. Shanghai Eastern Airlines chartered 13 cargo flight loads full of Northwest cherries, up from eight cargo flights in 2014. In total, our cherries were promoted throughout China on seven e-commerce platforms generating a total sales of 206,900 boxes (20 lb equivalent), up 37.2% from 2014. The strength of our programs are directly attributed to the partnership we have with the USDA-Foreign Ag Services’ Market Access Program (MAP). For example in 2015, our industry spent $0.27 MAP cents for each case of cherries sold, the State and Federal tax coffer returned $12.51 per case (20# equivalents). In FY2015, ‘direct’ promotional support in this market was paid with MAP funding and grower dollars of $473,544. The total FOB plant value of exports to this market is estimated at US$86.9 million. Our total support created a ROI of $184/$1.