Apr 7, 2007

Tart Cherry Growers Consider Spending More on Advertising

Cherry Marketing Institute (CMI) staff members used the occasion of the CMI annual meeting in mid-January to press tart cherry growers to double their investment in advertising and promotion.

They were talking to the right crowd. The meeting in Traverse City, Mich., drew mostly Michigan growers, who produce most of the national crop of Montmorency cherries and will pay the bulk of the estimated $1.25 million in new money that would be raised by a new assessment of $10 a ton.

That new money is earmarked primarily for paid advertising, something the cherry industry hasn’t used much in promotion but which CMI President Philip Korson thinks can be highly effective in spreading a very specific message.

He wants growers to cash in on the health benefits of tart cherries by making sure an aging population of 76 million baby boomers gets the message. He argues that this group has the interest and the money, and will buy products that contribute to their continued health and well being.

If every boomer ate three more pounds of tart cherries a year ¬– a handful of dried cherries a week or a glass of cherry juice now and then – the market for tart cherries would double and growers could be ahead of the demand curve instead of chronically behind it. Current tart cherry consumption in the United States is less than a pound per person.

Leelanau County grower Jeff Send, chairman of the Michigan Cherry Committee, put his endorsement this way: “I think we have the plan. We have to move before we lose more market share. I feel the time is now. Other industries have invested and we haven’t.”

He was referring in part to the effects of the disastrous production year of 2002, when the shortest tart cherry crop ever left customers without product – just at a time when information on the health benefits of dark-skinned fruits and berries was becoming widely disseminated. Blueberries, blackberries and strawberries flourished while cherry producers were sidelined. With revenues based on production, CMI’s voice diminished along with the size of the crop.

Korson and the CMI crew planned to travel to tart cherry production areas in Utah, Wisconsin, New York, Pennsylvania and the Pacific Northwest in January and February to explain the plan and ask for grower support.

Starting Feb. 13, the Cherry Industry Administrative Board will be conducting a “straw poll” of growers to discover whether they are generally in agreement. There will, however, be no formal vote. If consensus seems positive, the CIAB, which administers the federal marketing order covering cherries, will authorize the $10 a ton assessment.

The plan calls for CIAB to collect the money and pay CMI to carry out the program. Assessments could be made on the 2006 crop and on imported cherries as well, and the promotion program could start this fall. The program is planned to run for five years.

In 2005, CMI had revenues of $1.4 million, with Michigan providing $917,405. That money was spent on a broad program, with $394,000 going to the general category of promotion, and lesser amounts to foreign market development, research, grower relations and others.

Joe Lothamer, CMI promotions director, said in his presentation that, “At every stage, baby boomers’ concerns have been everybody’s concerns.”

Perhaps no group ever has so dominated the American scene, from diaper shortages to flower power to a growing grayness. With the oldest now just turned 60, health and aging issues will be on the front burner for 20 years or more, he said.

Jane DePriest, CMI’s marketing director, said that promotion over the years has relied on publicity given by publications writing positively about cherries. These messages, while favorable and free, could not be controlled like paid advertising.

Focusing on health benefits poses some challenges, Lothamer said. Tart cherries have never been highly processed, so whether canned, frozen or dried, they are often presented without added sugar or artificial ingredients. They can easily be called “natural,” he said.

Focusing on nutraceutical benefits will be more difficult, given the warning letters sent two months ago by the Food and Drug Administration to companies claiming health benefits for cherries. Cherries can’t be advertised as drugs for the prevention or treatment of disease, so devising legal labels claiming benefits beyond nutrition must be done carefully.

Tart cherries have attractive nutritional benefits ¬– minerals, vitamins, calories, fat, fiber, carbohydrates – and high levels of antioxidants, Lothamer said. More work needs to be done to build a scientific claim for low glycemic index and for the analgesic power of cherries to reduce pain and inflammation associated with gout and other forms of arthritis.

Last fall, FDA ruled that some health claims made on Internet Web sites can be considered extensions of product labels. CMI did not get a warning letter because it does not sell a product and thus its Web site was informational and educational, not a label extension, DePriest said.

CMI wants to develop ways for marketers to use Web site information, perhaps linking to a Web site specifically developed to contain health information as part of the new program. Korson said that peer-reviewed journal articles resulting from scientific studies and clinical trials form a sound basis for label claims and for communication with physicians and other health professionals.

The chief emphasis of the new program will be on print advertising in national magazines oriented to health and fitness. Lothamer and DePriest reviewed ways in which some industries are working with national magazines to create advertorials – mixtures of editorial copy and paid advertising. These are being used for blueberries, California almonds and raisins, peanuts, asparagus, wine and walnuts. Such hybrids offer content control to the advertiser, plus the implied “endorsement” of the publication and its writers.

In the final analysis, what Korson is trying to communicate to the industry is a new sense of urgency. He wants the tart cherry industry to move now and build a strong future.