All the business marketing and strategy gurus have analysed the common causes that lie behind the success of all the big brands. It is a pity that they have never done this with the brands in our food sector. Maybe they are not very aware of the importance of this sector, going even beyond economic matters.
The fact is, however, that this state of affairs gives me the opportunity – not that I see myself as any kind of guru – of analysing the success in this sector of some big brands that are known and valued by the majority of consumers in the geographical areas where they are marketed. One day these big brands started from scratch and now we can learn a lot from them. In this article I shall call them “final consumer brands” in order to differentiate them from the brands that are known in commercial distribution rather than by consumers, which I shall call “distributor customer brands.”
I am referring, among others, to the geographical brands “Plátano de Canarias” (Canary Islands Bananas), “Salmon from Norway” and “California Walnuts”, and also to the private brands “Zespri” “Pink Lady” and “Marlene”. Practically all of them are leaders in their markets, in sales as well as in value, and their prices do not depend so much on supply and demand, as is so often the case in this sector. Who wouldn’t want that for their brand?
In my view, two of the main reasons for the success of these brands are the continuing quality of the product associated with them and the fact that they used good advertising communication and consistency to create a brand that is known and valued by the final consumer. But the great discovery is that behind these big brands there is no “owner” but a union or association of farmers, businesses or co-operatives, which means that they are collective brands according to the Trademark Law.
I believe that this points the way for a sector that is too disunited and focused on selling volume, on competing on price alone, when it has been proved that there is always someone who will sell “the same thing cheaper”, even in the same sector or country. For that reason, in order to increase the value of our productions continually we should not be looking at selling more of the same thing, but selling something different (if that really is what we have). We must offer something more than the other people and that “something” that makes us stand out has to be transmitted to the consumer through the brand and its advertising, something that could be tangible o intangible, but that increases the perception of value. But the investment necessary to create a widely recognised and valued brand will be too great for one single operator to be paying out continually, other than in exceptional cases.
The talk must be of investment in communication rather than of expenditure because it is an investment made on an asset, the brand, which must increase in value over time as more consumers come to know it and are willing to choose it and pay more for it. For that reason it will be a decisive strategic asset in improving the value equation and thus boosting the competitiveness of a company or sector that has chosen the path of differentiation rather than costs as the way to become more competitive.
One of the factors that most limit the competitiveness of Spanish companies in this highly globalised market is their size. There are about 30,000 companies in our food sector, most of them family businesses, with a turnover of 90 billion euros compared with the 127 billion euros of the 6,300 companies in the Italian food sector or the 157 billion euros in sales of the 10,000 French companies. This is the root cause why their brands are stronger. Thanks to their size or because they have joined forces, they have bigger budgets to make themselves known and more resources for R&D&I and for launching new products that are unique or different, products that will be the basis for competing through differentiation.
I propose that until this long-awaited process of concentration comes about, it should be the brand that unites the sectors, that associations or consortia for promotion should be created for the domestic and foreign markets around a single collective brand with regulations for its use. This would need just one technical condition: meeting preset quality parameters because quality and brand are two sides of the same coin, something that it must be possible to demonstrate.
For that reason I always say, especially to small and medium-sized companies in our food sector, that the best way to increase competitiveness, and thus sales and value, is to unite around a single collective brand and to invest until it becomes a final consumer brand. Few factors can unite a sector like a brand and with such little complication. At this time, the interprofessional organisations and their communication campaigns are a consequence of the profits produced by unity within a sector even though these campaigns are mostly only at a generic level, and when they are geographical they do not involve a brand, as is the case of Spanish olive oil. On the other hand, Plátano de Canarias is a geographical campaign with a brand because it appears as the only brand for the product at the point of sale.
To be precise, what I propose is that the companies or cooperatives should only use their individual brands to operate with their distributor customers, who will choose the supplier that they want, and that by uniting they will create one big, single consumer brand with which they can all appear together in the point of sale; the brand would start to become known and differentiated through online and offline advertising in the mass media. This unity would, moreover, favour internationalisation, the power of negotiation with distribution, social and political relevance, R&D&I, and financial support from the public authorities.
In my speeches I analyse a number of success stories, some from Agr Food Marketing and others that are not. In our sector there are many products that could become final consumer brands like the ones that I have mentioned. It is still uncharted water that a sense of common purpose could help us to explore.
But for a company, co-operative or sector the move from marketing a brand known only at “distributor customer” level to a “final consumer” brand and starting to invest in the right amount of advertising is a big leap, a decision that can only turn out happily if its implications are understood when it is taken. It is this decision that I want to discuss in depth so as to help in taking it well. The question in this regard would be, what conditions must be met for a successful final consumer brand to be a success? There are two conditions: first, knowing what kind of advertising campaign I should run and with what kind of brand; and second, fulfilling the five requisites that I will explain at the end.
I would like to clarify and share the terminology and classification that we have created in Agr Food Marketing for the kinds of brands and advertising campaigns that we think there should be in the food sector.
As we now see, these classifications are very useful for companies, associations and public institutions because they help to clarify goals, responsibilities, message contents, etc. of the different kinds of advertising campaigns.
Starting with the brands, we divide them up according to the level at which they are known into “distributor customer” brands when they are only known by the distributors, and “final consumer” brands if they are also known by most consumers. Depending on whether or not they refer to their geographical origins, we divide them into “geographical” brands and “private” brands. The geographical brands are always collective brands.
A “final consumer” brand, which is what I am interested in developing in this article, can be geographical or private. Now, a Denomination of Origin or a PGI are by law collective brands. If we are to regard them as “geographical final consumer brands”, they must be used as such, appearing alone above the product in the point of sale, and that is something that happens very rarely, for example with the DOP Peras de Rincón de Soto (Pears from Rincón de Soto) and with the PGI Plátano of Canarias (Canary Islands Bananas).
This differentiation between brands is important when it comes to planning their communication, value and progression. If producers and manufacturers who label the product with their brand have never done any large-scale and continuing advertising for them in the territory where they are marketed, the brand will not be known or, obviously, valued in that territory by the final consumers. They will only see a sticker or label on the product, which tells them nothing. In this case we are looking at a “distributor customer” brand. When distributors choose a brand their criteria and values will be very different from those of the final consumer, which means that different messages must be used to persuade them.
To know whether a brand has reached the level of “final consumer” in a particular geographical area, just ask what brands they know of the product in question and if the majority of consumers do not name our brand spontaneously, then it is not a “final consumer” brand in that geographical area.
Now, using commercial communication of a brand that is known by a majority of consumers in a particular territory does not mean that this brand awareness will translate into a purchasing preference for the brand. A key role is played here by the brand positioning that has been chosen in the strategy and that will have to be transmitted in all future advertising campaigns, as well as in the whole marketing mix. If the positioning of a brand or product is not clear or is incorrect, the communication will not motivate the consumer to choose that brand or product and it will not be effective.
The positioning of a brand is the image that the consumers have of that brand compared with the competition, whether we like it or not. If this positioning is to make us more competitive, it must be planned from a critical asymmetry, from a differential strength or attribute that underpins the essential strategy of the decision to compete by differentiation and not by cost. It must be chosen with great care after a study of the product, the competitive environment and the consumer, because it will point the way for all kinds of advertising communication for years to come.
I must mention here that for us distributor brands / private labels, which should not be confused with what I call in this article distributor customer brands (DCB), are private final consumer brands because, although some of them do not do any conventional advertising they do do advertising communication from the moment at which they appear massively in their points of sale with unique designs and characteristics, transmitting specific values with their policies for quality and price. One weak point that these distributor brands have which we have found as a result of this classification is that they might sell but will not be able to use a DB as a collective or “geographical” brand. They will never be able to operate with a “geographical” brand of their own like California Walnuts or Plátano de Canarias, as these are reserved for the associations or sectors of a specific product and region giving those sectors important advantages, as we shall see.
As for the types and levels of advertising campaigns (online and offline) that can be done in the food sector to address the final consumer, and where it is important to know which to choose, we at Agr Food Marketing divide them into five levels: Sectorial, Generic, Geographical Origin, Geographical Brand and Private Brand. These campaigns can be divided into two groups, those that promote a PRODUCT, whether or not it is linked to a geographical origin, and those that promote a BRAND.
The “sectorial” advertising campaigns (fruit), the “generic” campaigns (apples) and the ones for “geographical origin” (Spanish olive oil) promote products that are later sold with their brands. The “geographical brand” campaigns (Peras de Rincón de Soto – Pears from Rincón de Soto) and the “private brand”, which can be collective (Marlene apples) or the property of a company or an individual (Chiquita) promote specific brands that appear alongside other competing brands in the point of sale.
The confusion in this classification might be found between the “geographical origin” campaigns and the ones for a “geographical brand” but this possibility can be eliminated simply by pointing out that in the former there is a logo or tag that appears later on the label of the product accompanying the brand of the company or cooperative. This class covers the campaigns often made by the denominations of origin, geographical indications and the Interprofessional associations when they run advertising campaigns abroad with reference to Spain. On the other hand, the “geographical brand” campaigns present the same brand with which the products will later be marketed in the point of sale. As we have said before, these are run by Associations such as ASPROCAN with Plátano de Canarias (Canary Islands Bananas), now a PGI, and the DOP Peras de Rincón de Soto (Pears from Rincón de Soto). This last example is the exception – for now.
It is important in order not to waste time and money to know what to expect at each level from each kind of campaign, who is to pay for it, what message it should put across, etc. before starting (see figure).
In the first level there are the sectorial campaigns. They are the broadest and are intended to promote all the products of a sector, for example the fruit and vegetable sector or the meat sector. These campaigns are run by associations and foundations from the sector like the Asociación “5 al día” (5 A Day) in the fruit and vegetable sector. Nevertheless, the public authorities are almost always involved whenever a sector has problems or it is a matter of improving public health, as is currently happening with the action by the European Union to promote fruit in schools as a way of dealing with the problem of childhood obesity.
The goal of these campaigns is usually to provide information. They are campaigns that result in sales in the medium-long term and where the communicational content depends on products of other sectors being seen as competition or substitutes. For example the fruit sector might see competition in its sector from artificial desserts: cakes, ice cream, yogurts, etc. This will in turn determine the content of the communication, which will have to focus on the health-giving, natural qualities of fruit because that is what differentiates it from of the artificial desserts and makes it stand out.
It does not make sense at communicational level for a particular product to claim for itself the strengths that are common to all the products in its sector, as often happens in the fruit sector with the values “healthy” and “natural”. The logical thing is for each kind of product to find its own specific differential attributes; and having said that I would like to move on to the second level.
The second level is where we find the generic campaigns. These promote a particular foodstuff: oranges, rabbit meat or olive oil for example. They are usually run by the producers or processors with interests in the territory where they want to increase demand. In Spain these are especially the interprofessional organisations and the scope of action could be national or international. The competitive field, and thus the positioning, will in principle be determined by the other products in the same sector: lamb rather than other kinds of meat for example, and not so much by substitute products from other sectors. This does not apply to leading products in their sector as is happening now with the European campaign for the generic promotion of citrus fruit in which Agr Food Marketing is “attacking” artificial desserts, to the benefit of the whole fruit sector but most of all citrus fruit as the leader in the sector. Agr Food Marketing has been responsible for many of these campaigns in the last 30 years. Recent examples are the strategies and positioning developed for lamb meat and farmed fish.
In these campaigns, where no mention is made of the region or country that the product comes from, it is important for the strategists to mix creativity with a knowledge of the product in question as well as of the competition and of the final consumer. This will generate the right specifics leading to the ideal positioning for each product, which the strategy and creativity will later try to make real over time. If this is not done the campaign will fall into the fairly common error of everyone communicating the same attributes, generally, flavour and healthiness, starting a war along the lines of “I’m better than you”, where everybody loses. Paradoxically, it is in the interest of every product in a food category for the rest to position themselves correctly in their terrain, without invading other people’s. For example, we positioned lamb with the differential attributes of flavour and naturalness, pork is now positioned in the US market with the differential attribute of versatility, and the formerly healthy rabbit (“the other white meat”) as the most complete and healthy meat, and so on.
These generic campaigns also usually have another preferential goal, which is to inform, and if they are done for long enough, with the minimum budget that is necessary and the right strategy and creativity, they give good results in terms of sales. Many sectors have embarked on running campaigns at this level and have been greatly disappointed, either because they have not had sufficient investment and repetition year after year, or because the geographical or private brands of the companies or cooperatives in the sector have not done anything themselves to take advantage of them and create synergies. If everything is done well, these generic campaigns can benefit all the geographical and private brands in their sector, even unbranded products, so everyone in the same sector should contribute financially to running them.
At the third level we have the “geographical origin” campaigns, all of them with their “de” (“from”): Naranjas de Valencia, Aceites de oliva de España, Vino de la Ribera del Duero (Oranges from Valencia, Olive oil from Spain, Wine from la Ribera del Duero) etc. These promote the foodstuffs and drinks from a particular geographical region, country or region, with the idea that this region offers certain differential characteristics that should be brought out. Thus the goal of these campaigns is to help to increase the sales and value of the private brands of the companies and cooperatives connected with these origins.
I do not see any sense in investing in campaigns of this kind, where an origin is given emphasis and then the companies do not highlight it in their origin labels in a prominent place, as happens with a lot of our extra virgin olive oil, and this does not help to revalue our “Marca España” (Spain Brand), now that our AOVE standard for this oil makes us leaders in quality as well.
These campaigns make a lot of sense in the sectors with hundreds of brands as happens with the wine and oil sectors, where it is impossible for the consumer to know and recognise most brands. As a result, the basic functionality of brands in the world of marketing is lost because they are unable to ensure identification and transmit confidence because they are not recognised. However, this can be done by linking the brand with a denomination of origin or a geographical indication.
In this level there are the most controversial campaigns, those promoted by the public authorities of a country or region. Too often they do not have the commercial impact that is expected by the companies in that sector. My view of this matter is that it is always a single product that is promoted, with its “de…” (from…) for example Naranjas de Valencia (Oranges from Valencia) never “Alimentos de…” (Food from…). I think that umbrella campaigns as wide-ranging as the ones run in the past by the Spanish Ministry of Agriculture, “Alimentos de España” (Food from Spain) or by the Valencian Community “Sabor Mediterráneo” (Mediterranean Flavour) that appear together with the private brand as a separate tag on one side of the label or package provide a value that is too wide or diffuse for the consumer, who is used to the specific nature of the product-brand-quality relationship. Campaigns such as “Tierra de Sabor” (Land of Flavour) are an exception. I do not regard it as “geographical” but as a campaign that attributes quality to all of the products of the region of Castilla-León, and now that it is used as the sole brand on some products I ask myself whether it might be entering into competition with other brands of the same region and category. In my view, it is now a private final consumer brand. I consider it to be a private “guarantee” brand. There should be a serious analysis of the return on the investment in these campaigns, and that is something that does not often happen.
In my opinion, I do not believe in these campaigns that cover so many kinds of products because it goes against common sense to claim that all the products of a region, by the mere fact of their origin, uniformly have a great flavour or any other characteristic, which is necessary for a brand to be credible. Moreover, QUALITY depends on more parameters than the geographical origin, such as the fashion and care with which each producer works or produces.
In this third level a consumer can never find an orange in the point of sale labelled as “Naranjas de Valencia” (Orange from Valencia), although I think that this path represents the future of many sectors (and this is a personal matter that I believe in) as is shown by the fourth level.
The fourth level is where we find the “geographical brand” advertising campaigns with their “de” (from). In my view these are the most interesting and logical ones for creating a final consumer brand with the producers or marketers of a particular region or country uniting since the starting point is a known “brand”, the name of the region or country. This is something that no private advertiser can appropriate and moreover, it has the ability to create very strong emotional bonds inside the sector and country and can foster internationalisation. In fact this is the very group where we have possibly run some of the few campaigns that have been done, Plátano de Canarias and Peras de Rincón de Soto.
This is the level where the concept of brand (in a consumer brand) appears for the first time with its function of identifying and differentiating. This means having a product in the point of sale with its differential brand and attributes such as a sticker, label or unique packaging, the name of the product followed by the word “de” and the place of origin. It also means having ongoing advertising communication for the product in the mass media in the territory where it is marketed.
But most importantly, what we have is not a product but a brand. At the point of sale it will face other consumer brands, both geographical and private, including the DBs, and the consumer will have to choose among them in a battle of perceptions. It is here, in the making of the choice, that the effectiveness of these campaigns has a role to play. Campaigns of this kind must be able to showcase the differential attributes that enhance the products because of their geographical origin or the way in which they are produced there. If the quality of the product is as it should be and the communication is right, these campaigns will manage to persuade consumers to choose these brands and pay more for them. We must not overlook here the point that brands do not only facilitate identification and differentiation; they are a promise that must be kept all the time; they are not something that is just there – like fame they have to be earned.
Last but not least, there is the fifth level, with the “Private Brand” advertising campaigns. These do not mention the geographical origin but they work like the “Geographical Brand” campaigns in that they are campaigns for branded products with their differential value being transmitted not by the origin but through the brand itself, through the positioning created with advertising that will in turn have been based on the differential quality of the actual product. These are usually run by companies or co-operatives at the individual level like Chiquita, but also by associations as with the collective brands of Zespri or Pink Lady.
Joining forces and using these brands makes sense when the geographical origin limits or does not contribute to commercial success, and when there is a clear competitive advantage that is hard to imitate over the other producers of the same origin, as the “Gabaceras” brand claims to have in the Canary Islands banana sector.
Having this view of the five levels or kinds of promotional campaign could make it possible for companies and cooperatives, who are after all the ones who sell products, to create synergies between their brand campaigns and those for the product of the sectors to which they belong, since the campaigns at a higher level benefit those at a lower level because of the cascade effect. For example, a generic promotion campaign for the fruit sector benefits oranges; a generic campaign for oranges benefits the PGI Cítricos de Valencia; a geographical campaign for Cítricos de Valencia will benefit Naranjas Fontestad, and we have the private campaigns that Fontestad S.A. runs for its own oranges.
A good understanding of these five levels or types of campaign is important because I have seen too often how effectiveness is lost when communication is focused on a strong differential point that belongs in a different communication level. For example, if we are dealing with the generic promotion of apple consumption, this should not rely on pointing out that it is a healthy and natural product because all kinds of fruit are, because a differential strong point should be chosen that is specific to apples.
A good understanding of these five levels helps us see that a single brand can compete at various competitive levels and at different times although to do so it will need a bigger budget: Agr Food Marketing created a strategy for Plátano de Canarias that made it possible for it to compete in three competitive environments. In the first (sectorial) against artificial desserts the positioning was as a healthy and natural “dessert”, easy to carry and peel. In the second level (generic) our positioning as a fruit was against other fruits as the most energy-packed. And in the third level, as a “geographical brand” we fought against the banana brands by positioning ourselves as the banana with the best taste thanks to its origin and suggested differentiating it by its “speckles”. Taking a weakness (the brown speckles) and transforming it into a strength helped us to differentiate it positively at the point of sale, where it is mostly sold without labelling. It was an intelligent and creative way of using “critical asymmetry”.
In conclusion, now that we know what kind of brand we want to achieve and what advertising campaign we need, the second condition for a successful consumer brand is knowing and keeping in mind these five key points:
The product is the main thing and is what communicates most. It must not fail, and as it now seems that we are going to compete on differentiation, this must be real and important for the consumer, rationally, emotionally and socially, as is shown in the new marketing 3.0.
It will take time communicating with the final consumer before results are seen in the form of increased sales and value of our production. In my experience, at least two or three years, which means that there must be a business or political vision.
There will need to be a minimum investment, which will depend on the geographical area where the brand is to be known and valued – and this is where the importance of joining forces comes into play. I always recommend starting out little by little, concentrating the investment in territory where it can make itself known.
It will be assumed that a brand is synonymous with a promise of quality, and if this is not the case the brand will be destroyed. Rules, checks and punishments must be self-imposed.
As of this moment there must be outside or in-house marketing-communication professionals, whose job will be, among other things, to propose the appropriate competitive positioning for the new consumer brand in order to help to increase sales and value. This may well be the most important marketing decision.
Once the process of building a consumer brand has been started, it is necessary at the same time to set up a permanent observatory of competitive intelligence (e.g. as in the lamb sector).
In conclusion, what I am proposing in this article is that the sectors should increase their competitiveness by uniting and creating a collective final consumer brand, geographical or private, known and valued by the consumers, as a result of having an adequate budget and having made the right choice in its positioning.
And last of all, I would point out that innovation and Marketing 3.0. could be the basis of such differentiation.