CAC’s Tiered Account Program Aligns Supply with Marketing Resources to Optimize Retail Sales

  • Apr 28, 2020

The goal of the California Avocado Commission’s (CAC) Tiered Account Program, which is now in its fifth year, is to create alignment between supply and marketing resources, and encourage distribution where customers have demonstrated a preference for California avocados. At the end of each season, the Commission collects retailer-specific data as well as AMRIC data and then incorporates the information into a series of retailer report cards utilized by CAC’s retail marketing team to guide its retailer partnership decisions for the next season.

The process begins with the assemblage of IRI Point of Sales data — that includes volume, dollar sales and average price — and AMRIC data, including FOB pricing for California and imported fruit. This data is integrated with additional information including:

  • Dates the retailer carried California avocados on the shelf
  • Dates and details of in-store sales and promotional activities
  • CAC-customized social media developed for specific retailers
  • Retailer advertising showcasing avocados and California avocados

The data is then analyzed to determine:

  • Best performing retailers carrying California avocados
  • Retailers whose shoppers are willing to pay a premium for the fruit
  • In-store retail price of California avocados in-season versus prior non-season and prior season
  • California retail price versus price of imported fruit
  • FOB price advantage for California versus imports

These insights are gathered into a report that is utilized by CAC staff to hone in on opportunities to increase retail sales and utilize marketing resources most effectively. Those retailers deemed “most likely to succeed” are categorized as Tier 1 retailers. Unique “report cards” are then developed for these targeted retailers illustrating key metrics that CAC would strive to achieve in the upcoming season.

CAC’s Retail Marketing Directors (RMDs) then meet with shipper/handlers to review the list of Tiered Account retailers and assess their potential based on crop size, location of the retailer’s stores and several other key business, sales and marketing attributes. Together, the RMDs and shipper/handlers finalize the list of priority retailers. The final step is to determine the level of sales and marketing support the Commission will provide each chain, keeping in mind that CAC and the shippers will adjust the marketing programs as needed to maximize the crop’s sales performance.

The Tiered Account program plays a critical role in helping the Commission plan the overall distribution of the crop by reviewing past California crop shipments within and outside the state. This data helps CAC focus its marketing resources on the regions and retailers with the greatest potential. Because the program helps measure the price premium received by California avocados, it also helps CAC demonstrate the value of the fruit to all stakeholders. By synchronizing shipments with marketing activities and monitoring and measuring the overall timing and performance of CAC’s marketing efforts, the Commission can better adjust activities and optimize performance during the season and going forward.

The Tiered Account program remains a powerful assessment tool as the industry continues to adapt to the realities of the COVID-19 pandemic. "This California avocado season the Commission continues to use our Tiered Account approach striving for an FOB premium. We are aware that consumer needs and shopping patterns have been disrupted by the coronavirus situation and continually monitor the situation,” said Jan DeLyser, California Avocado Commission vice president marketing. "While it is too early to tell what effect this disruption will have on the California FOB premium trend, one bit of good news is the avocado category has experienced less volatility than other produce categories.”

By aligning retail distribution, consumer preference and retailers committed to supporting California avocados, the Commission can maximize its marketing activities.

In 2019, more of the California crop was shipped outside the state than in prior years.

In 2019, California avocados sold within the state received a 22 percent FOB premium over imports. The four-year average has been a 15 percent FOB premium over imports.

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