Collaborative nationwide brand Australian Wild Abalone (AWA) is hoping to raise AUD 12 million ($9.6m) in industry funding for the next stage of its China market plan, revealed Jayne Gallagher, managing director of market development consultancy Honey & Fox.
Over the past few years AWA was formed to combat a significant loss of revenue from the Chinese market, likely caused by the rise of farmed abalone. Its next step – a plan set to run from 2017 to 2022 – is to take “the ASMI [Alaska Seafood Marketing Institute] route”, said Gallagher, during the 2017 World Seafood Congress.
“We want to tell our story to Chinese consumers, and it’s time to differentiate or die,” she said. “There’s nothing wrong with farmed abalone, but what we have is special, and if we can communicate that and gain a market premium, that will mean greater revenues for everybody.”
The wild abalone industry – there are 14 exporters licensed to use the AWA label – will soon take a vote to determine if it will impose a levy, intended to raise AUD 12m over five years.
“This isn’t a huge amount, given the sector’s worth AUD 150m,” she noted. The strategy will aim to grow sales by 3% per year through to 2023, resulting in revenues of AUD 170m.
Doing nothing, AWA feels, would result in a decline of 3% per year, to AUD 119m per year, based on the past ten-year average.
China appeal
In 2001, wild Australian abalone made up more than 50% of the world’s total abalone. Since then, farming of the species has taken off.
“Now we’re responsible for 3%, which is actually less even than the illegal supply of abalone,” said Gallagher. Chinese consumers were willing to take farmed abalone, and Australia’s capture industry did not adapt to market needs, resulting in an AUD 421m drop in revenues.
Extensive market research suggested that what was needed was a nationwide marketing approach, as no single exporter would be able to make a dent in re-engaging the Chinese market.
AWA was formed, and backed by a set of rules to ensure the integrity of those 14 firms signed up to use the brand. It spoke with 35 Chinese importers, and found that most of them did not have time and resources to promote Australian abalone, given they had entire portfolios to manage and sell.
So, using their joint funds, AWA began attending trade shows; running recipe competitions designed to inspire Chinese chefs; educating buyers via seminars; and growing its China-facing social media presence.
“It’s very clear to us now that we need do even more on our Chinese website, our Wechat and Weibo,” said Gallagher.
Chinese consumers seemingly forego eco-labels, preferring to do their own research and then trust a brand, she said.