Smooth expansion: New Zealand nut butter firm takes local production route for US expansion to bypass quota challenges
When we spoke to Fix & Fogg last year, the firm had just started focusing on its APAC expansion to countries such as Australia, the Philippines and Singapore, and has since set its sights on the United States peanut butter market as a way to ‘go big’.
“We wanted to go big, and the US is just that. Americans are known for their love of peanut butter, but most of it is the nasty palm-oil filled stuff,” Fix & Fogg Marketing and Export spokeswoman Lisa Pujper told FoodNavigator-Asia.
“We bring a better alternative and show people just how good real peanut butter can be – at this stage we’ve only brought over our peanut butter range and the classic Smooth Peanut Butter and Dark Chocolate Peanut Butter variants have been huge hits there.”
The firm elected to establish its own local production facility in the US last year when it belatedly discovered that there is an import quota in place for peanut butter from all countries, preventing it from scaling up or even having certainty over the amounts it could import in.
“Last year we discovered - much to our disappointment - that the peanut butter we’d been sending to the States could no longer enter the market without being slapped with a huge tariff,” said Pijper.
“It turns out America has an annual peanut butter quota whereby it only lets in a certain amount each year.”
The peanut butter quota encountered by Fix & Fogg is actually the product of a two-decade old proclamation signed in 1994 by then-President Bill Clinton as part of the Uruguay Round Agreement on U.S. Agricultural Commodities.
As of 2020, the amount of peanut butter imports allowed into the country stands at 14,500 metric tons from Canada, 3,650 metric tons from Argentina, 1,600 tons from specified countries in the agreement (which New Zealand is not a part of), and just 250 metric tons for all other countries. Above this amount, a US$0.15 charge per kilogramme would be implemented.
“That left us in a tight spot – either stop supplying our USA consumers with the good stuff, or find another way to make it work. [So what we did was to] set up production over there to keep the peanut butter flowing and our US customers happy,” said Pijper.
The production facility is located in Colorado, and the firm is also setting up a retail store (which they call a Fix & Fogg window) in Texas. The focus for now will remain solely on peanut butter.
“Americans love Smooth, so that's definitely their staple, but there are also a lot of people who follow the Ketogenic diet there so our Dark Chocolate is super popular too as it's a bit of a treat that's still low in sugar and carbs,” she said.
“The US is big [for us], so that is keeping us more than busy enough for now, though we do get a lot of emails from folks in the UK, so that could be one for the distant future.”
Current markets
As for the firm’s current markets, the focus is on NPD such as with its new Cashew Butter in New Zealand.
“We just launched our brand new Cashew Butter which we will be bringing to Singapore too. [For this], we roast the Cashews before grinding them so there's a really lovely depth of flavour [and amazingly creamy], a must try for nut butter lovers,” said Pijper.
“In Singapore, currently the Almond Butter is one of our top sellers, as are our big Super Crunchy peanut butter jars.”
B Corp certification
Fix & Fogg was also recently awarded a B Corp certification, which basically highlights a business’ focus on balancing purpose and profit by ‘considering the impact of their decisions on their workers, customers, suppliers, community, and the environment’.
“Sustainability is one of our core values - We only use glass jars and are in the process of transitioning to an entirely paper label too,” said Pijper.
“We source local ingredients where possible and all of our products are Non-GMO, vegan friendly, palm oil free, plant based, and nutritious – [all in keeping] with being a B Corp.”
