Finding a Foreign Following
Thursday, November 1, 2001
filed under: Utilization/Trade: NuSun
Finding a Foreign Following
Marketshare building for NuSun oil in Mexico, Taiwan
The marketing objective with the rollout of NuSun in the last several years was not only to capture more of the domestic oil market, but to find a following with foreign consumers as well.
Three countries currently import a small amount of the mid-oleic oil: Taiwan, Mexico, and United Arab Emirates. NuSun is sold in the consumer market as bottled cooking oil in all three countries, and some in the Mexican baking industry are using NuSun to coat pans before baking. Bimbo, one of Mexico’s largest baking companies, has replaced cottonseed oil with NuSun in its operations.
NuSun exports began only in the last year. “All of the NSA’s promotional work in Mexico and Taiwan is now focused on NuSun. We are not promoting traditional sunflower oil anymore in those two countries,” says John Sandbakken, international marketing director of the National Sunflower Association.
Importers like NuSun in part because it does not require hydrogenation for most food preparation uses, and it has attractive potential with consumers as a “new and improved” sunflower oil product, low in saturated fat with a fatty acid profile similar to olive oil without the stronger taste, Sandbakken says. “It’s a premium oil that’s viewed by consumers as a healthier oil with more value.” The fact that NuSun is non-biotech, developed with standard hybrid breeding methods, is also appealing with some foreign buyers, he adds.
The NSA is focusing its NuSun promotional efforts in Mexico and Taiwan, as those two countries offer the best bang for the buck, so to speak, for the NSA’s limited overseas promotion budget.
“There are no trade barriers in those countries, unlike the European Union, where there are still high tariffs which can make it difficult to gain marketshare,” says Sandbakken. “In Taiwan, NuSun’s taste and healthy attributes are a selling point, but it still needs to be competitive with other oils on price.”
In Mexico, NuSun has a definite advantage because of the quality of product the U.S. can offer, and favorable transportation logistics. “Buyers are able to order any size shipment of oil by rail car when they need it. We can provide a single rail car of NuSun oil, while Argentina, our main competitor, can’t. The Mexican buyer would have to buy part of a boatload to get the oil from Argentina,” says Sandbakken. He points out that the U.S. has 100% marketshare in Mexico for sun oil, including NuSun. Fewer trade barriers because of the North American Free Trade Agreement have also helped support NuSun sales into Mexico, he adds.
NuSun sunflower oil as a bottled oil made its debut in Mexico earlier this year. The company Negociacion Industrial Santa Lucia S.A. de C.V. is bottling NuSun oil with a product launch that began with supermarkets in Mexico City, and plans for nationwide distribution. The packaging features a sunflower-imprint, a label identified with the NuSun certification mark, and a hang tag on the bottle that describes the fatty acid profile of NuSun compared to other oils.
Other international companies have also expressed an interest in using the NSA’s NuSun certification mark for NuSun-bottled oil. “The health benefits of NuSun are of real interest to foreign bottlers. Sunflower oil has always been an international favorite for home cooking use because of its high smoke point, clean taste and less cooking odor than other choices,” says Sandbakken.
He says that the foreign retail bottled oil market offers more market potential for NuSun than industrial users, who tend to buy the most inexpensive cooking oil for their needs. The NSA promotes NuSun to consumers in Mexico and Taiwan through a variety of means, including cooking shows, print ads, complimentary NuSun oil samples, and in-store cooking demonstrations to show how NuSun fits well into their style of cooking. The target market is mid to upper class consumers would are willing to pay a premium price for a higher quality, healthier cooking oil for in-home use.
The NSA tries to leverage its promotional efforts as much as possible by educating foreign media and opinion leaders about NuSun. Sandbakken says that news stories on NuSun in foreign newspapers, magazines, and broadcast mediums are more credible with consumers than paid advertisements, and reduces promotional expenses too.
In one example of the NSA’s market development efforts, the NSA hosted a group of Taiwanese media in the Dakotas in August. The group, made up of both print and television reporters, included representatives from the largest newspaper and television stations in Taiwan. The group saw all phases of sunflower oil production, from the producer's perspective with two farm stops in the Dakotas, and visits to crushing facilities at Enderlin N.D. and West Fargo N.D.
The Taiwanese media group also met with sunflower researchers at the USDA Northern Crop Science Lab in Fargo, N.D. “One question from the Taiwanese was, ‘If NuSun is a new kind of oil, how can it not be genetically modified?’ Jerry Miller at the USDA Lab explained that NuSun is produced using traditional breeding practices,” says Sandbakken.
The U.S. sunflower industry’s goal is to ultimately bring better market equilibrium to the U.S. sunflower consumption equation with NuSun. “Balance is needed in the domestic and export markets for better stability in price. We don’t want the industry to be totally dependent on either. Right now about 70% of the sunflower oil we produce is exported, and 30% is used domestically. One goal with NuSun is to get that ratio closer to 50-50,” says Sandbakken. – Tracy Sayler