Global Food & Agriculture Memo: Afghanistan Expanding Pomegranate Farming, Launching $12 Million U.S.-Funded Marketing and Export Program

Ali Akbar, an Afghan pomegranate seller, arranges his product during the World Pomegranate Fair in Badam Bagh Farm in Kabul, Afghanistan, Thursday, Nov 20, 2008. Afghan officials have launched a marketing and export campaign for the fruit in the hope that it will give farmers an alternative to growing poppies. (Photo Credit: AP Photo/Rafiq Maqbool.)

Afghanistan has been producing the ancient fruit, the pomegranate, know as the Anar in the various regional tribal language spoken there, for about as long as the ancient country has existed in its many forms, from Kingdom to colony and now potentially budding Democracy.

The fruit however has historically been produced by Afghanistan's farmers primarily for national consumption and limited export to neighboring countries, despite the country's capacity to produce enough of the fruit for export.

Today many government officials and others in the country believe and hold out hope that exporting pomegranates could be a positive replacement for Afghanistan's current number one export crop -- the opium poppy.

And such an initiative was announced last week in Afghanistan.

With the help of a $12 million initiative funded by the United States, Afghanistan's government, farmers and others are planning to improve and expand pomegranate farming and processing in the country and launch a global export industry and marketing program designed to sell lots of Afghanistan-produced pomegranates throughout the world, as well as to attempt to position the ancient fruit long-grown in the ancient land as the best pomegranate on the planet.

Last year, Afghanistan exported its first pomegranates to outlets of the French hypermarket chain Carrefour in the Kingdom of Dubai, according to a report by the Associated Press. The fruit, larger and redder than many pomegranates imported from Turkey or North Africa, was a hit. Carrefour, which is the world's second-largest retailer after Wal-Mart Stores, Inc., quickly placed orders for all its Middle East stores, according to U.S. funders and Afghan officials.

This successful effort served as the impetus for the newly launched $12 million, U.S.-funded improvement, marketing and export plan.

Read the story, "Afghanistan markets its brand of pomegranates," from the Associated Press here

Opium production and export has long plagued Afghanistan. And in recent years the production of the crop has soared because the now re-emergent Taliban group is using the growing and sales of the poppy to fund there attempted return to power in the country and war against the elected government and U.S. and NATO troops.

The government under elected President Hamid Karzai has been reluctant to launch a mass poppy eradication program in the country because like it or not, without the poppy crop not only would there be millions more impoverished people in already impoverished Afghanistan, but the central government's major source of revenue besides U.S. aid, taxes paid by citizens, (few people pay taxes in the country but without the poppy crop even fewer would) would likely disappear.

President Karzai has long been arguing for financial assistance to build Afghanistan's agricultural sector. At one time the country was a solid agricultural producer in the region, before the war in the 1980's with the then Soviet Union, before the Taliban took over following that war, and before the current war following the September 11, 2001 attacks in the U.S. But that's been decades ago now -- decades of war and destruction of the country's infrastructure, which wasn't exactly good before that.

Many analysts and others are skeptical is an agricultural improvement, exporting and marketing program can work in the war-torn country, as you can read in the AP piece. However, Natural~Specialty Foods Memo believes it is well worth the $12 billion effort.

We also think the west, the U.S., Canada and Europe, where pomegranate sales have soared in the last few years, should do everything the nations can to open the door to the Afghanistan-grown fruit. After all, it is in the U.S. and Europe where most of the illegal drugs produced from Afghan poppies are bought and used.

The U.S. government under current President George W. Bush has been very vocal about wanting programs to eradicate the opium poppies in Afghanistan. Therefore both the U.S. and Europe should become part of the potential solution, the building of Afghanistan's agricultural and food industry starting with the pomegranate, by doing all that can be done to speeding up the process of allowing Afghanistan-produced pomegranates into the western markets.

Earlier today we wrote and published this piece, " about California-based Paramount Farms and its success in branding and marketing fresh pomegranates and value-added pomegranate products like fresh juice teas and other items under the POM Wonderful brand. William Phillimore, the company's executive vice president, was in Kabul, Afghanistan last Wednesday for the launch of the pomegranate export and marketing program, a marketing effort the California company might play a part in.

Phillimore, who works for the company most responsible for boosting consumer demand for pomegranates and pomegranate-based products in the U.S., said at the kick off event: Afghan pomegranates are "as good as anything I've tasted," adding that he thought there is plenty of room in the U.S. market for pomegranates exported from the country, despite the fact Paramount Farms is the largest U.S. grower of domestic pomegranates.

While Afghanistan remains a war-torn country, and in fact all signs are that things are about the worse they've been in the ancient land since the now resurgent Taliban were defeated in 2002, we think it important that initiatives such as the $12 million pomegranate marketing and export plan be initiated. Afghanistan needs economic development programs like this to build not only its economy but also its civil society. The people need reasons not to support the Taliban, and jobs, a decent economy and the civil society that comes with those things are just as important as winning in combat in terms of the outlook for and ultimate state of the country.

After all, it was such a vacuum that was created not so long ago right after the former Soviets were driven out of Afghanistan that paved the way for Taliban rule, which not only created a totalitarian state but also wiped out any economic progress the country had made prior to the war with the former Soviet Union, which of course we all know today as Russia.

Therefore we cheer the pomegranate export and marketing program. And having eaten an Afghanistan-produced pomegranate, we can tell you they indeed are delicious and of a very high quality, which is distinguished by the bright purple color and smoothness of the ancient fruit produced for so long in the ancient land of Afghanistan.

Additionally, on average, Afghanistan's farmers make about $2,000 per acre with pomegranates, versus $1,320 per acre growing opium poppies, according to currently available data. Therefore, if the west opens its markets to pomegranates grown in Afghanistan, the economic premium of producing the fruit over the poppies could, with this expanded export market and thus increased demand for pomegranates, serve as an economic incentive to get the country's farmers to switch from growing poppy to pomegranate. It's worth a try.

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.