In western countries when we think of a pistachio, it is a dried, salted nut in a shell – already hopefully split along the seam – that can be prised open with fingers, so the green-tinged nut can be removed and consumed as a snack food.

The main challenge Harefield Pistachios had to face in the late 1990s was how to expand the market beyond the traditional one. The company settled on developing a new market niche with the upper income, educated "foodies" who are interested in new taste experiences in snacks and meals prepared at home or in their favorite restaurant. In snacks they may be served with wine and cheese.

A critical factor for this market niche is good appearance. The problem with fresh pistachios is that the red skin turns black within a few days if the product is not properly refrigerated. The change in skin colour does not affect the quality of the nut, and hence is not a problem for the traditional market, which accepts this as normal.

However, it would affect the acceptability of the product in the new market niche. It was essential to work through a market channel, which had good facilities for maintaining the cold chain. By the late 1990s, Woolworths (and later Coles) had developed the necessary facilities for maintaining the cold chain. They also offered the potential for reaching the target market.

The cold chain requires that fresh pistachios be maintained at a temperature between zero and four degrees all the way from harvest to the retail shelf. Within 45 minutes of harvest, the fresh pistachios are put into a cool room on trays and the temperature lowered to the acceptable level. Those destined for the supermarkets are packed into punnets holding 150 grams of the fruit, and these punnets are stacked on trays and loaded onto pallets for shipment.

The product is then shipped to a local cool store in Wagga, and then onto a big cool store in Adelong from where it is shipped overnight to markets on 22 tonne trucks equipped with taut liners. They are not refrigerated trucks, but the taut liners mange to keep them cool. On an overnight trip to Melbourne or Sydney, the temperature of the fruit when it leaves the cool store is only 0.5 degree and during transportation it only increases 3 degrees thus keeping it within the allowable range.

The most likely place for breaks to occur in the cold chain is during transportation. One example cited was the case of a truck driver not being aware of the need to maintain the cold chain and leaving the fruit sitting outside on a loading dock for 4 or 5 hours before the distribution centre opened.

Harefield’s pistachios are currently shipped to either Sydney or Melbourne. The same trucks are used to carry the fresh pistachios to both the traditional markets and the supermarkets. In Sydney, the product is distributed to the traditional markets in 5 kg boxes and to the supermarkets in punnets.

However, in Melbourne the product only moves to the Coles supermarket. Apparently, the logistics of shipping product into the traditional market (ie. at the Central Market) are too complicated.

Harefield Pistachios has developed a marketing channel through both Coles and Woolworths. In the supermarkets, the product is sold in punnets alongside the berries (in the cool sections of the fruit and veg. department) and retail in the range $3.49 to $3.99. Thus the product is positioned with the fruits rather than with the nuts and the packaging is very different to that used in the traditional markets.

Harefield Pistachios has developed its own promotional material with the help of a professional photographer and developed display cartons, which can hold 6 punnets(at the request of Coles). In the early days, the display cartons held 12 punnets, but according to the Coles buyer, this proved to be too many and the product was left out too long and subject to spoiling.

As a way of raising consumer awareness of this new product, the company has been quite active in providing professional photographs of the fruit both on the tree and in food settings to newspapers and food and fashion magazines. As a result, it has had some considerable success in gaining publicity for the new product. For example, Vogue Living and Entertaining magazine will be doing a feature article on Harefield Pistachios and its fresh product in the next March issue to coincide with next year’s harvest

Harefield Pistachios believes the key to success in this new market niche is developing a strong personal relationship with the major customers (Coles and Woolworths). It is deemed essential to go and meet with the supermarket buyers once a year at least 2 months before harvest to get feedback on the needs and concerns of the buyer.

The company has developed a particularly good relationship with the Coles buyer who gives extensive feedback on desired improvements to the chain and the product. With Woolworths, the product is handled through an agent. However, with Coles, the product is bought directly by the Coles buyer and goes straight into the Coles distribution centre.

The supply chain can be summarized as follows

Right now there is no HACCP program in place on the farm. However, in order to continue to supply the supermarkets, this will need to be done within the next year to meet their food safety requirements. The main capital cost involved will be a new packing shed to meet HACCP requirements.

More work needs to be done to refine the packaging and storage of product. Refrigeration of the pistachios tends to dehydrate the fruit and there are mould problems.

The NSW and Victorian market for fresh pistachios is no more than 60 tonnes currently. Harefield pistachios could probably supply half of this market or more in a year or two. But there are other suppliers entering the market. This will present a marketing challenge as the market could soon be saturated. One possibility would be for the various suppliers to work cooperatively to supply this market.

However, this is not possible at the moment because of a lack of consistent quality standards. Harefield Pistachios sees this as a possible future direction. There is also a potential market beyond Australia in Europe among the upwardly mobile Middle Eastern communities which live there.

Need very good communication with the customer. It is not adequate to deal only through fax and email, although these are important. It is essential to have face-to-face communication at least once a year prior to harvest (preferably about 4 to 5 months ahead of the harvest so that modifications can be made to the marketing plan.)

Be cautious of marketing the product through agents. In the experience of Harefield Pistachios, the agents tended to focus on volume rather than focusing on fresh pistachios as an innovative product. The company needed considerable feedback on what worked and what didn’t with regard to the product and the cold chain. But this was not forthcoming from the agents. As a result, it was deemed essential to deal directly with the customer on a face-to-face basis once a year prior to harvest.

The promotional campaign must be high quality including professional advice to produce good in-store brochures, display items and photographs to magazines and other media outlets.

Need to look one step ahead of where the supermarkets are going (e.g. on food safety). As an example, at Harefield Pistachios, the cartons were bar-coded at a time when these were not needed for distribution. However, now the supermarkets are finding that a useful feature.