The National Watermelon Promotion Board (NWPB) has released the findings of a new study, conducted along with research partner Armada Corporate Intelligence, Inc., that demonstrates the significant positive impact of the NWPB's activities on the demand for watermelon. The study also shows that investment in the NWPB's promotional activities results in a return on investment (ROI) of 19:1. Additional findings of the study included the NWPB’s impact on the retail and FOB price of watermelon from 2017 – 2021 and its impact on the general economy.
"We are proud to continue our work in promoting watermelon and supporting the watermelon industry," said Mark Arney, executive director.
The study, which developed a model explaining the retail demand for watermelon, found that the board’s promotional activities have a positive impact on watermelon demand. Funding the NWPB's activities at actual levels versus the lowest monthly level experienced results in a 4.5 percent increase in the retail price of watermelon. Furthermore, the price flexibility coefficient for the NWPB's expenditures is 0.031, meaning that a 10 percent increase in expenditures on the NWPB's promotional activities would result in a 0.31 percent increase in retail watermelon price.
Retail revenues rose sharply – 31.6 percent – from 2017 to 2021. During that same time span, NWPB expenditures remained steady.
The study also found that the board's promotional activities have a positive impact on farm prices. On average, there is a $0.012 per pound difference in farm price when the board’s expenditures are set to their historically lowest level versus what was experienced using the actual expenditures. This difference resulted in a $225.19 million increase in farm sales, meaning the board increases farm price by 3.5 percent.
The study indicates that spending on promotion by the NWPB potentially increased employment in the industry by 4,234 jobs, based on incremental grower income and the median fruit and vegetable worker salary. Using economic multipliers from the USDA Economic Research Service for the melon segment of agricultural output, the total effect of the NWPB's spending likely also increased broader economic output in the nation by $160 million.
"These findings reinforce the importance of our efforts and provide a case for amplified investment in the board's activities. The models are certainly worth exploring," said Christian Murillo, president at the NWPB.
The full report An Economic Analysis of Market Impacts of the National Watermelon Promotion Board: 2017-2021 is available at the Industry section of NWPB’s website.