How one marketer has turned 'ugly fruit' into a new category
- 14 January, 2020 07:01
Think of apple juice and you usually think of the sweetened juice made from a concentrate, so sugary it makes you wince. Once tried, this type of juice tends to ruin apple juice for people for life. And yet one apple grower from New Zealand is using inspiration from the wine and olive oil industries to change this perception both in his own country and all the way across the ditch.
Owner and CMO of The Apple Press, Ross Beaton, has staked everything on his apple juice varietals and plans to grow the chilled juice category.
The disruptive thinker was a very successful apple grower for over 30 years, and has now taken over 13,000 tonnes of non-export grade (dubbed ‘ugly') fruit and turned it into apple juice with a difference. After growing the apple juice category by 40 per cent in New Zealand, The Apple Press recently launched the product into Australia, its first export market.
Beaton told CMO he used to grow and sell apples to 43 countries. He then spied an opportunity for ‘ugly’ fruit.
“We tried to extract as much of the value as possible from the apples and sell them at a consumer level. However, we also had this volume of product, which we refer to as ugly fruit, which basically got pulled apart and sold as sugar in the past,” he explained.
“New Zealand is quite world-renowned for its apple industry and for producing juice. What we wanted to do was look at it in a new way. Anyone under 45 has most probably never even tasted real apple juice. They have tasted fillers which have been concentrated.
“So we said look, we're selling these apples, they are world class, why don't we take them and make a single varietal juice of the individual apples? Why don't we hero the apple and make what we believe to be the world's best apple juice?"
Today, The Apple Press has a range of apple juice from sweet to tart. These include the iconic Pink Lady variety, as well as Jazz, Royal Gala and others, each with a different taste profiles.
“For younger people, they like the sweeter taste, while for the more mature, they like the tart taste. We took the lead from the olive oil and the wine industry and offer different taste profiles and varietals,” Beaton said.
“Apple is the new orange, we say. We are promote drinking and a taste experience with different varietals by making high quality products from high quality ingredients."
Building a business proposition
It sounds easy, but it has been anything but. The project took a lot of outlay and belief in the product before it was even launched: Three years and $2 million, in fact. The Apple Press made 3225 bottle of its juice only, and took it out to sample in order to raise money to build a state of the art factory in NZ.
The factory has since been built and is capable of making 50 million bottles - a big step up.
“We invested heavily in a new facility with world-leading technology. The juice is harvested as a fresh apple and treated like a five-star product. It is managed through the cooling process. We remove all oxygen from the juice when we crush it, and add nitrogen to the bottle to deliver a fresh apple juice experience," Beaton continued.
“This is what we are passionate about, so the non-negotiable was the product had to taste good and had to have no preservatives. We wanted to use the latest tech, so the bottle is fully recyclable and has half the plastic of other bottles. Our aspiration is to move to using 50 per cent recycled materials soon. We’re excited about it.”
For a small startup with tight budgets and large aspirations, marketing is highly targeted and a challenge, Beaton admitted. The Apple Press has an exclusive distribution deal with Woolworths in Australia, and undertakes a number of marketing initiatives through Woolworths annually including free giveaways.
"We’ve found so far the correct approach with the customers is in-store via accelerated sales events," Beaton said. "This is not just sampling. We take them on a journey from sweet to tart so they can taste different varieties. A lot of people are skeptical about apple juice because they’ve had a bad experience from drinking a concentrate.
“That is a major barrier we have to get through. However, the consumer conversion rate is around 60-70 per cent in stores. We have seen fantastic uptake of the products once people taste it. Because it is not a homogenised apple juice, there is an individual taste profile and there are no preservatives, and it's crisp, it's clean."
Another project in the works is still a digital profile up and running. "In the future we'll look at the fresh food delivery services in Australia - we do a similar thing in NZ - but we are a startup and have limited funds,” Beaton said.
In NZ upon launch, the company did a quarter of a million samples over a couple of weeks to give customers a taste. It also participated in a 'black box', where people get new products delivered and rate and review them. The Apple Press achieved a gold medal in the Black Box as over 90 per cent of tasters would recommend the juice to others.
“Those little touch points reach a certain amount of people. We know what our message is, now it’s how we actually deliver that message to consumers. We are talking to a couple of influences here in New Zealand as well,” Beaton said.
“Until we actually establish a presence here in Australia we are looking at the most effective way of getting our message out there. Sampling is fine, but it is expensive and it’s slow.
“In NZ, however, this has been the most effective way for us to get into our market."
After 12 months, The Apple Press reached 10.2 per cent market share, which Beaton was stoked about. "But it has been basically a hard slog of getting it in front of the consumers and getting them to sample it. My Food Bag been good mass sampling for us," he said.
“We are looking at doing some of those things in Australia, with slight differences, because the size of the market is different. And as we grow the business, we're looking at what funds we have available to take the next step. Digital is going to be a major part of it, but we're going to make sure that if we spend the money, we get a return coming back."
Beaton said it's daunting to enter a new market. "A lot of a lot of people think there’s one silver bullet to do it, but there isn’t. Woolworths has been fantastic. However, one of the issues is available stock on shelf because it's the chicken and egg; we have been struggling with demand planning," he said.
"Because if we ever run a promotion, the stock gets pulled off the shelf. So in a week we’re running out of stock for maybe two, three days out of seven. That’s getting better as we get more sales."
To help, The Apple Press has employed auditors in Melbourne and plans to move them to Sydney to make sure products are in the right position and it's hitting sufficient stock levels.
“It’s a tough competitive market out there but we knew what we were getting into," Beaton said.
“We did a Phil Collins concert here in NZ when we launched. We got 25,000 free bottles out to every concert goer. It’s slow to get a return on those sort of investments. When you do a mass sampling it can go badly against you if your product doesn't fly with consumers. But we were confident people would like it and we were right.
“In Australia, the market in apple juice is quite small. In NZ, 38 per cent of shelf space is orange juice; in Australia this is 82 per cent."
But having grown the apple juice market since launching in NZ by 40 per cent, The Apple Press is looking to grow the category overall in chilled juice, not cannibalise Australia's existing market. He claimed it's already helped grown Australia's market by 25 per cent so far.
“In this way, we are growing the dollar return for that cabinet for Woolworths. The stores still sell the same amount of orange juice, but actually make more money out of the cabinet now. The whole key is how can we actually grow the chilled juice business for the retailer and give the customer what they want as well," Beaton added.
“If we're going to play, we plan to win and we are giving everything we have to it. It’s a rollercoaster, but we are thrilled to be in Australia.”
More business building stories from CMO:
- Allianz Retire+: Building a start-up from within an existing business
- Found co-creator shares his checklist for startup marketing
- Startup scoops up Australia's doggy doo problem with social media smarts
- How GlamCorner has used digital marketing to go from startup to multi-million dollar business
- Vinomofo CEO: Look to your company DNA for innovation
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.