Entry into the Korean market bears fruit for Montague Farms

Montague Farms shipped its first 4 containers of oranges to Korea in 2021, after tariffs 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 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 reduces 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 Tade 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.

Korea is Montague Farms’ number one market for table grapes.

Austrade’s on-ground support opens opportunities

Montague Farms is also introducing its produce to other markets across Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore and Vietnam.

‘We’re keen to develop more into those markets that we don’t yet have a strong relationship with,’ says Fletcher. ‘We lean heavily on Austrade to facilitate those relationships and they've been wonderful doing that.’

Beyond those key introductions, ‘it’s often the really micro things we’ve needed Austrade’s help with,’ says Fletcher. Those have included checking on visa requirements or finding a suitable cold storage facility to quarantine a few trays of apples for 2 weeks before sending them to the Philippines.

‘Having Austrade’s support just puts our mind at rest. It makes it easier to take advantage of opportunities when they come up,’ says Fletcher.

Long-term strategy provides flexibility

Succeeding as a new entrant in a highly competitive market means being nimble and finding ways to adapt to demand, notes Fletcher.

Nimble is not the first word that comes to mind to describe an industry where trees may take years to bear fruit. For Montague Farms, being adaptable requires a long-term vision and careful positioning to take advantage of opportunities.

With that in mind, Montague Farms’ current success in Korea is helping position its brand for the future. In the short term, that should help sales of its cherries when it ships them to Korea for the first time from November 2024.

Then, when an opportunity opens to ship stone fruit to Korea, Montague Farms plan to be there. ‘When that happens, we want to be sure our brand is well known in Korea even before the samples get there,’ says Fletcher.