November 2013: Produce Brand Strategy, Visibility and Transparency
All for One, or One for All? Picking a Brand Strategy in Produce
It’s something of a truism in the business that it’s too hard to create a consumer brand in produce. Shoppers favorite brand of banana is “yellow”, and so forth. Most produce companies focus instead on creating trade brands. However, a successful consumer brand drives preference and can command a premium … and results in significant value. McDonald’s brand name, for example, is valued at $42bn – about 70% of its shareholder value.
So how do you decide what’s right for your business? At an abstract level, there are three consumer brand strategies: industry-wide, category, or company specific.
Since 1991, the Produce for Better Health foundation has promoted the “5 a Day for Better Health” and, since 2007, “More Matters,” campaigns to drive consumption industry-wide. But with an annual budget of only $3M, the foundation is outgunned by CPG marketers. The PMA recently announced a partnership with the Children’s Television Workshop to license several of the Sesame Street Muppet characters royalty free to the produce industry (details are still to be worked out). Research has shown that children may not only choose food preferentially with characters they recognize … but they’ll actually say they taste better (than identical items without the character). This industry-wide approach could increase overall produce consumption, taking dollars away from less healthy food purchases. But Muppets aren’t right for all produce – and may appeal primarily to the pre-K set.
Everyone knows produce is good for them, and the evidence supporting the benefit is undisputable – yet only 5% of American’s under 50 are eating the recommended amount of veggies (despite the commendable efforts of PBH). This week’s New York Times magazine challenged an ad agency to come up with a conceptual marketing strategy to drive growth in the broccoli category. Rather than marketing on health benefits, produce needs to “get people to behave in a healthful way without knowing it”, as the PMA’s Bryan Silbermann is quoted as saying in the article. The agency mocked up an edgy, web-friendly broccoli campaign that would cost $3-7M to execute … too much for a single grower/shipper, but not unreasonable for a commodity marketing association.
A company-specific brand emphasizes the unique benefits of a particular company’s product. Those benefits need to be discernable by the shopper and – most importantly – consistent. In a perishable category, a trusted brand reduces risk for the shopper – especially when the quality attributes are hard to observe on the shelf (e.g. flavor, shelf life). Research has found that shoppers were willing to pay a 9% premium for branded produce, when it signaled quality. “Cuties” are a great example of successful company-specific marketing – combining a consistent product experience with a customer benefit (sweet, easy to peel, ‘kid sized’) – and a hefty marketing budget.
Whether you are creating a company-specific brand, a category brand, or thinking about taking advantage of an industry-wide brand strategy, there are three important considerations:
1. Understand your differentiating attributes and their observability on the shelf. Mobile research tools now make this quick and cost-effective.
2. Communicate effectively. Don’t just tell people your product is good for them – explain how they can enjoy your product in a way that challenges their preconceived ideas. A roasted broccoli recipe could get someone to try it again, if their memory was of a tasteless, boiled mush. On-pack mobile engagement creates a cost-effective way to share recipes, farm stories, nutrition information, and much more, and track engagement.
3. Ensure consistency. A bad experience of quality or freshness on the shelf can undo the benefits of a well-executed marketing campaign. Growers, shippers and retailers now have effective tools to monitor and manage supply chain performance, and identify root causes of problems fast.
Drop us a line, and chat to our experts on shopper research, engagement, and supply chain quality management.
Visibility and Transparency: Two sides of the same coin
“They use everything about the hog except the squeal.” This is a line from Upton Sinclair’s 1906 book, “The Jungle”. The novel caused uproar over food safety and opaqueness of business practices in the meat packing industry. It led to the establishment of the FDA. Today, more than 100 years later, visibility and transparency continue to be priorities for consumers.
Product Mindset Study
Based on the UL product mindset study, a global independent safety science company, environment, health impact, transparency, outsourcing, traceability and ethical sourcing are some of the rising priorities among the minds of consumers.
Processed foods form 70% of what Americans eat. (“What are you doing about the 70%?“) Recent events about food safety and ingredient integrity have made the consumers’ demands for transparency louder. Brands need to respond in a comprehensive manner to allay consumer concerns. Even though most manufacturers (80%) believe that supply chain visibility is important, 42% of consumers believe that manufacturers do not provide sufficient transparency into their processes and ingredients.
What is the difference between visibility and transparency?
Visibility: Information that brands have about the ingredients, processes, sources and practices used to bring the product to consumers. This includes complete supply chain visibility including traceability for the entire supply chain.
Transparency: Information that brands share with their consumers about the ingredients, processes, sources and practices used to bring the product to the consumer.
Opportunity for brands
This is an area of concern for large established brands and an opportunity for younger, nimble brands to differentiate from the competition. Established brands have scale and distribution advantages that some of the newer brands do not. New brands can try to capitalize on some of the rising priorities listed in the product study like the environment, health impact, transparency, outsourcing, traceability and ethical sourcing.
The depth and complexity of food supply chains is the key challenge in getting visibility. Brands have to provide a level of transparency that their consumers expect. The solution has to be economical and has to make business sense for the supply chain participants.
Food brands that will have complete supply chain visibility and provide transparency to a more informed consumer will win in the future.