Honeydew pegs future on U.S. sales

Everyone's heard the clichés before. 'We're living today in a world without borders.' 'There is no such thing as a Canadian company anymore.' 'The whole world is our marketplace now.' But what, exactly, does all of this mean in terms of...

Everyone’s heard the clichés before.

‘We’re living today in a world without borders.’ ‘There is no such thing as a Canadian company anymore.’ ‘The whole world is our marketplace now.’

But what, exactly, does all of this mean in terms of concrete, day-to-day reality? What do Canadian firms go through in the effort to market their products and services internationally? How do they build brands on a global basis? What are the challenges – and the rewards?

For this special report, Strategy’s writers profile the global marketing activities of several noteworthy Canadian companies.

For Honeydew Canada, the international marketplace tastes very sweet indeed.

Four years ago, the Mississauga, Ont.-based juice company took a long, hard look at the Canadian market, and concluded that growth opportunities were limited here. So the 78-year-old firm began to turn its attention south of the border.

Today, there’s no question that Honeydew’s future lies stateside, says Stu Funnell, the company’s president and part owner.

Honeydew began exporting its frozen fruit juice blends to the U.S. in 1996, with considerable success. American sales now represent close to 50% of the company’s revenues – and this despite aggressive competition from the likes of Coca-Cola-owned Minute Maid and Cadbury Schweppes-owned Welch’s (not to mention the general decline of the US$1.2 billion North American frozen fruit juice category).

Made with pure fruit juices and natural honey – a major selling point in the U.S. market, Funnell says – Honeydew’s products come in nine flavours, including Mango Passion Papaya, Strawberry Kiwi and Grape Blueberry.

Distribution is primarily in the central and eastern U.S., where the product is sold through such chains as Shaws, Price Chopper, A&P and Sam’s Club.

While the western states offer a tempting target – and the company does currently ship into Phoenix, Ariz. and Salt Lake City, Utah – Funnell says most of Honeydew’s efforts will be concentrated in the east for the time being.

‘Our objective, before we go crazy in the U.S., is to solidify the brand east of the Mississippi,’ he says. ‘Once that’s done, then we’ll move west.’

To strengthen the brand and help distinguish it from rivals, Honeydew repackaged its juices last year, adding vibrant stripes to the containers, enhancing the imagery and updating the 78-year-old honeybee icon. A new pull-ring feature, designed to make the lid easier to remove, was also added to the packaging for the U.S. market.

Toronto-based Wolf Group works with Honeydew on advertising and marketing for both the U.S. and Canadian markets. In-store materials such as shelf danglers and point-of-sale displays, Funnell says, are key promotional vehicles. The company has also run sweepstakes programs on its Web site (www.hdew.com) to help build customer relationships and generate feedback.

‘We’re not a huge company like McCain or Minute Maid,’ Funnell says. ‘We don’t have the kinds of funds they do, so we have to become much more tactical and street-smart about the way we spend money.’

While the move into the American market has been a relatively smooth process, Honeydew has encountered certain obstacles along the way.

U.S. regulations, for example, impose a whole different set of packaging requirements involving ingredient lists and nutrition guides, forcing Honeydew to create new packaging for the American market. The company now has two separate inventories – one for the U.S., and one for Canada.

Also in this report:

- Tim Hortons issues wakeup call: Builds underdeveloped breakfast category p.25

- Faces adapts to local market: Cosmetics retailer leverages awareness of cultural differences p.25

- Buckley’s takes bad taste message abroad: Cough syrup marketer making steady inroads in U.S. and overseas p.27

- Great Canadian Bagel makes slow but sure gains in Moscow p.27

- Southbrook Farms and Winery proves its worth abroad: Ontario winemaker uses foreign success to boost sales at home p.28

- Seagull Pewter sells at shows: Family-run giftware operation does business in over 20 territories p.28

- Clearly Canadian launches in U.S. first p.28

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