CONSUMER INSIGHTS ON NEW POTENTIAL ONION MARKETS Kazi Talaska : Onions NZ Inc. market access manager
Expanding into new markets is essential for industry growth and a top priority for Onions New Zealand. Understanding what consumers are looking for in these markets is an important tool needed to successfully enter and gain or increase market share in a country. Recently, Onions New Zealand initiated research with New Zealand Trade & Enterprise (NZTE) to size up the opportunity in some overseas markets, analysing market conditions, consumer preferences, and distribution channels. Below are market and consumer insights into some new and high potential markets: Brazil, South Korea, Philippines, United Arab Emirates, India and Saudi Arabia.
Consumer expenditure on vegetables The United Arab Emirates (UAE) and South Korea spend the most on vegetables at US$221.00 and US$206.00 per year, per capita of the population. The incorporation of onions into the local diet and cuisine helps fuel a healthy demand for the product; which in turn, leaves more opportunities for imported products to help complement supply.
Purchase of organic vegetables Compared to New Zealand consumers, Brazilian, Saudi Arabian, and Filipino consumers purchase more organic vegetables. For Brazil, this is an increase of 31 percent compared to the New Zealand consumer. This indicates interest from these markets in a healthy and chemical-free product but more specifically, a willingness to pay for these attributes.
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Price-conscious All markets except Brazil claim to be less price-conscious than the New Zealand consumer market. This is especially true for the Middle Eastern and Indian markets; this could mean these markets are more likely to pay higher prices for onions.
Importing landscape Saudi Arabia and the UAE have the highest import value for onions out of all the countries in the list, with a value of US$96 million and US$86 million respectively. This indicates a high volume of onions purchased and greater market potential for incoming exporters.
Distribution channels Supermarkets and hypermarkets are the dominant retail channels in all markets apart from India. A plus for the high priced premium New Zealand onion, that is more likely to be retailed in a supermarket and targeted to a high-end consumer. Exporters should consider the retail environment in a given market and what products the consumer is looking for.
Tariffs Although modern market access is increasingly challenged by non-tariff barriers, tariffs themselves represent a big hurdle to breaking into a market. South Korea has the highest tariff from this list at 135 percent, while the UAE, Saudi Arabia, and India sit at zero percent tariff. It is difficult to justify the extra costs that will decrease return for growers, despite the market potential, thus tariffs represent one of the primary considerations.
