Saturday, November 29, 2008

Marketing Memo: Paramount Farms Creates Sales of Hundreds of Millions Annually By Branding the Pomegrante and its Essense

Just a few years ago the probability of finding fresh pomegranates, sometimes called the "ugly fruit," in the produce department of the average American supermarket or natural foods market was low. Many stores would offer the hard-skinned fruits for sale seasonally, devoting a small area in the produce department to displaying pomegranates, but that was about it. The demand for the fresh, purple fruit in the U.S. was minimal, except in areas where there were substantial populations of immigrants from the middle-east and Asian or Mediterranean countries, where pomegranates are a staple fruit.

However that situation started changing about five years ago, primarily because of the savvy and aggressive marketing efforts of California's Paramount Farms, which began branding fresh Pomegranates with its then newly-created POM Wonderful brand, along with creating its popular POM Wonderful fresh pomegranate juice.

The catalyst or opportunity for this branding effort by Paramount Farms were numerous scientific research reports, followed by lots of popular press attention in the form of news stories and broadcast reports, about the amazing antioxidant properties of fresh pomegranates and pomegranate Juice.

Many people are calling the pomegranate the "new cranberry" for its combination of good taste and health benefits. The cranberry and pomegranate also have something in common commercially as well: both were niche, commodity items until branded as fresh produce products -- Ocean Spray fresh, bagged cranberries and POM Wonderful fresh pomegranates -- and had juices produced from them. The latter development, the development of cranberry juice decades ago and now pomegranate juice, is when sales started to soar for both previous commodities.

Paramount Farms/POM Wonderful was able to jump on this positive health news, gaining widespread retail and foodservice distribution for its branded, fresh pomegranates and POM Wonderful pomegranate juice in nearly every natural foods store and supermarket in the U.S.

The company focused the distribution of its POM Wonderful juice at retail in supermarket and natural foods market produce departments because it had already established strong relationships with chain and independent store produce buyers in addition to the fact that by doing so it was able to avoid expensive slotting and pay-to-play fees required to get the juice on supermarket grocery shelves.

Along with gaining mass distribution in retail stores, Paramount Farms launched a heavy promotional and advertising campaign, focused primarily at first on obtaining free media publicity via public relations efforts, for its Pom Wonderful pomegranate juice, playing up the health benefits to consumers of drinking it, which has seen the sales of the POM Wonderful brand pomegranate Juice soar from $12 in 2003 to $100 million in 2007. And sales are currently growing in double digits over last year.

Distribution and sales of Paramount Farm's fresh pomegranates have also soared. Thousands of supermarkets that just a few years ago didn't even sell the ancient fruit now do so. The company also has created numerous recipes designed to feature pomegranates, which has dramatically increased the sales of the healthy fruit.

Numerous higher-end restaurants also today feature dishes using pomegranates, ranging from meats to desserts, which has helped give publicity to and make the healthy fruit increasingly popular. America's newspaper food sections and food and lifestyle-related television shows also have fell in love with the pomegranate, featuring it and recipes using it at every turn. The result: more awareness of and increased popularity for the ancient fruit.

Paramount Farms also introduced a line of branded pomegranate teas two years ago. Sales of the teas are soaring as additional research has demonstrated the healthy properties of the ancient fruit, along with the fact consumers have discovered how tasty the POM Wonderful Pomegranate juice and now the teas are. The company is introducing additional pomegranate juice-based value-added products (and other types of products using the fruit, including a recently introduced dietary supplement tablet and liquid extract under the brand) and continues to gain additional distribution, both in the U.S. and abroad, for its branded fresh pomegranates.

Paramount Farms recently expanded its POM Wonderful pomegranate juice plant near Fresno, California, which is in California's Central Valley. The Fresno Bee newspaper recently profiled the company, which has created a brand out of what just a few years ago was a niche fruit commodity product, as well as developed a $100 million brand in its POM Wonderful juice.

Numerous other companies are now marketing fresh pomegranates and juice aggressively. However, none has come as close to creating a brand near as strong as Pom Wonderful.

Pomegranates also are increasingly becoming used in other value-added food products. For example, we've recently seen two premium milk and dark chocolate chocolate bars featuring Pomegranate, one under the World Market store brand (Cost Plus chain) and the other under the Trader Joe's brand.

There's an explosion of products featuring the pomegranate in fact. These include teas, confections, ready-to-drink beverages, breakfast syrups and many others.

We love marketing stories in which a company or individual is able to create a strong brand from a commodity which previously was at best a niche crop that others didn't see the potential in. Paramount Farms has done that -- and continues to build on the Pom Wonderful brand franchise by introducing new lines like the teas and others.

Read the Fresno Bee profile of Paramount Farms and its Pom Wonderful brand here. The profile offers marketing and branding lessons for all food companies, particularly those looking to establish brand identity (and soaring sales) in the natural and specialty product segments.

Paramount Farms, which is the creator and parent of Pom Wonderful, is a large, vertically integrated processor and marketer of almonds and pistachio nuts -- the largest in the world in fact.

The company is currently looking to brand and add value to those nuts like it has to the pomegrante with its POM Wonderful subsidiary and brand. The company is following a similar model in doing so to its POM Wonderful apprach with the once commodity fruit the pomegrante. It promises to be an interesting marketing and branding development in our analysis.

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