Montague Farms shipped its first 4 containers of oranges to Korea in 2021, after tariffs were reduced under the Korea-Australia Free Trade Agreement (KAFTA). The Australian fruit grower, now nearing its 80th year in business, had built an export portfolio around stone fruit. However, that market only operates for 3 months of the year.
"We needed to broaden our range to keep ourselves and our brands visible for longer," explains Andrew Fletcher, Montague Farms' Category Manager, Citrus and Grapes. Diversifying into table grapes and citrus has been a successful strategic shift. Since that first small shipment to Korea, its exports of oranges have increased an average of around 250% every year.
Korean consumers have also shown their appetite for Montague Farms' grapes, in particular newer red seedless varieties. Having increased by 524% since the first shipments in 2022, Korea is now Montague Farms' number-one market for table grapes.
Tariff reductions open the export window
Under KAFTA, the 50% import tariff on citrus is reduced to zero between April and September every year. The agreement also drops the 45% tariff on table grapes between December and April each year. "Those tariff reductions under the Korea-Australia Free Trade Agreement are imperative for us," says Fletcher. "We just wish the window was open for longer."
Quality and connections are key to success
When Montague Farms was looking for new export markets, Austrade facilitated an introduction to Matt Choi of ENE Trade, who needed a supplier. The resulting relationship has proven highly productive. Fletcher believes it has been key to Montague Farms' success in Korea.
Choi is held in high regard by his customers who are a mix of importers, retailers, and wholesalers, says Fletcher. He also provides direct access to local market knowledge. Choi's insights have been invaluable. Korea is a highly competitive and brand-conscious market. Choi knew that as a new market entrant, Montague Farms' brand would need to compete head-to-head with strong and well-established names.
One strategy they tried was developing new packaging – replacing the traditional closed orange carton with a smaller open-topped box highlighting the produce. "The carton we developed together has helped our success, to the point where other growers are asking manufacturers where they can get the 'Korea-style box'," says Fletcher.
For more information:
Australian Goverment
Tel: +61 2 9392 2873
Email: [email protected]
www.austrade.gov.au