Iberian ham: The jewel of the crown in danger

In 2011 I wrote “truths, lies and Iberian ham”. Later in 2012 I extended this work as follows.

“In the evenings when I am tired and at home, I make up a story for my three little children; they like this much more than reading a story. A few weeks ago I couldn’t think of any story so I told them the one about the Iberian pig. I think this is a good way to introduce my ideas and conclusions about the Iberian pork sector.

“A long time ago, more than a thousand years ago in a very special place called the forest, there were some piglets living almost in the wild. The farmers looked after them a lot because they could make the best ham in the world with them, the ham that we so like.

These piglets lived free in the pretty forest eating grass and acorns. So that they would not be short of food, the farmers who looked after them also looked after the oaks and holms of the forest. And if they didn’t have enough food with all of this, they gave them fodder.

For many years they all lived happily. But one day, some very ambitious men saw that people paid more for a ham if it had come from these piglets and thought that they could make a lot of money if they bred many, many piglets, and so they began to do so. But as there were not enough acorns or space on the forest to breed so many piglets, they decided to give them only fodder and breed them out of the forest, locked up in warehouses just like they do with the white piglets.

This was a cheaper and quicker way to breed so they began to earn a lot of money… but do you know what happened…? Well the people couldn’t eat so many hams and the hams from these piglets were not as nice, so to be able to sell them they began to offer them cheaper and cheaper.

Then a tragedy occurred: people stopped wanting to buy from the farmers who had always bred the piglets in the forest and who spent a lot of time and money producing such a good hams because they thought they were the same as the others, as they were also called Iberian, but were much more expensive.

So little by little they ran out of money and could not look after the piglets and the forest as they had done before, and if this wasn’t corrected one day, piglets, forest and farmers could all disappear.

When I got to this point in the story, my children desperately asked me how it went on, I said that it was a story, not a tale, that it was still going on and that I would tell them when it finished.

If drastic decisions are not taken, the story could have a bad ending. In the short term for the farmers and industrialists of the extensive part of the sector and in the medium-term, and as a result, for the intensive part. You just have to see the census of Iberian pork(1).

http://www.magrama.gob.es/es/alimentacion/temas/calidad-agroalimentaria/calidad-comercial/mesa-del-iberico/riber-publico/

SPAIN 2008 2009 2010 2011
Pure Iberian acorn 283,052 250,487 252,385 114,473
Iberian acorn 620,194 548,902 361,053 360,590
Total Acorn 903,246 799,389 613,438 475,063
Pure Iberian recebo 19,747 20,496 3,445 1,668
Iberian recebo 42,694 28,593 12,372 14,047
Total recebo 62,441 49,089 15,817 15,715
Pure country Iberian cebo 1,271 15,215 5,199 2,520
Country Iberian cebo 8,028 31,654 37,888 33,596
Total country cebo 9,299 46,869 43,087 33,116
Pure Iberian cebo 213,102 93,681 71,747 38,338
Iberian cebo 2,982,957 1,920,464 1,833,891 2,055,866
Total cebo 3,196,059 2,014,145 1,905,638 2,094,204
Total pure Iberian 517,172 379,879 332,776 156,199
Total Iberian 3,653,875 2,529,613 2,245,204 2,464,099
Totals 4,171,045 2,909,492 2,577,980 2,621,098

CENSUS OF ANIMALS Source: MAGRAMA. RIBER PUBLICO.

The problem faced by the different players involved in producing Iberian pork in the forest and in the commercialisation of their by-products is much more serious than it might seem. I was surprised to see that it has now even gone beyond the present subject of discussion: the denominations of the different types of Iberian ham, whether or not they meet the regulations and the subject of the pure or crossed race.

I believe the core of this problem, which has only just started, lies in the type of business competitive strategy used by the two types of companies in the sector, the intensive and the extensive, competitive strategies that are totally opposed and incompatible.

There are several types of hams for consumers: ‘serrano’, ‘Teruel’, etc. Iberian ham is one more and is positioned as the best. According to ASICI study, 80% of consumers see it as a single type of ham, for as it is called “Iberian” they wrongly believe that it comes from the Iberian pig bred on acorns in the forest. But the fact is that although they only see one type of ham, they will still mainly find two types of ham on the market, one type made from pigs bred in an extensive system and others from an intensive.

Both business models have a totally opposed competitive strategy, as Michael Porter said. While the extensive sector competes with a strategy of distinction based on quality and high production costs, passed on to the consumer with the brand name of “Iberian”, the intensive bases its competitiveness on a low-cost strategy, so it is highly price competitive, but they are both called Iberian!! A time bomb.

This competition is totally unfair and disloyal, as thanks to the name of “Iberian”, the intensive sector has the advantage of distinction and the image achieved for many years by the extensive sector, to which it adds the advantage of price. The consequences are logical: the price of intensive Iberian ham brings down the price of the extensive, there is surplus offer and the worst thing is that due to disinformation, thousands of consumers wrongly buy Iberian thinking that it comes from pigs bred in the forest eating acorns, when this is so in under 20% of cases.

We are faced with disloyal competition based on consumer disinformation arising from the past and the result of a thousand traps in designing and preparing labels, inducing them to think that “Iberian” is the same as “forest” and “acorn”.

How can all of this be solved in such a way that both sexes can coexist profitably in their market segments? Is it possible? As Agr! made the first advertising campaign for the sector, I assume my responsibility for “giving” my recommendation as a consultant clearly, simply and briefly.

In my opinion, they are two possible paths:

Either the rapid, total separation of the extensive sector from what is causing it harm, the intensive sector, by informing all purchasers and consumers that what they are buying when they choose “Iberian” (been bred in the forest eating acorns) only happens in the pigs of the extensive sector.

Or to put “the things in their place” by making sure through a large communication and advertising campaign that 100% of Spanish purchasers and consumers are perfectly informed of the differences, the breeding process and feeding of the two large groups of Iberian ham.

Depending on the chosen path, it would be necessary to develop a strategic plan with a different communication and recommendations on the denominations of the different types of Iberian ham.

If the first part was chosen and consumers failed to stop thinking that “Iberian“ is always synonymous with “forest” and “acorn”, the legislation should be adapted to the reality of what consumers believe to put an end to the “deceit” and only allow the name of “Iberian” to be given to ham really from Iberian pigs bred on acorns in the forest. Otherwise consumers would be allowed to be “officially” confused.

Continuing with the first path, another argument for the extensive sector to be the only one able to use the term “Iberian” comes from the reality of the market. 90% of consumers most appreciate the flavour of an Iberian ham, which is something that depends fundamentally on the “place” of breeding and feeding, and not on the race. Although the Spanish use the same varieties of grape as the French, we are unable to call our sparkling wines champagne, due to the “place” where the grape and the wine is produced, amongst other reasons.

The second path, that of informing to put an end to the confusion, will take more time but in the medium-term everyone will benefit and a new stage will start where each quality will have its price and Iberian ham from extensive production will once more be appreciated and its sales will surely be enhanced. Furthermore, large less well-off segments of society will be able to discover that they can also enjoy Iberian ham.

Another key element if one chooses to inform consumers is the choice of communication to put through the Asici advertising campaigns. Here too there are two opposite and incompatible paths in which the consumers are either correctly informed or confused. To begin with, I would simplify the regulation and thus make it easier for consumers to choose their Iberian ham by reducing the denominations to just two: if the ham comes from extensive bred pigs, “Jamón de bellota” [acorn ham]; and if it comes from intensive bred pigs, jamones de cebo [feed hams]. I would also use a red label for the first and the yellow label for the second. These are the colours of Asici and the Spanish flag.

The second thing I would do is obvious; to stop confusing the consumer in the product with the use of images of acorns or the forest on ‘cebo’ ham labels and when communications are made that include both types of ham, such as the television campaigns.

The third thing would be to doubly inform on the product itself with the red or yellow labels, where this is reported with the word acorn or ‘cebo’ (it would be ideal if this were an official regulation) and I would also use a small diptych of how and where the corresponding pig has been fed.

In addition to advertising resources, many more disciplines and ideas could be used to inform, which we will pass on to Asici in due time as one of its marketing-communication agencies. I mention this here and now because after carrying out the “study on the traceability and labelling of Iberian pork” with CREDA, I think that urgent action is needed, as we have seen that 90% of the ‘cebo’ sector misinforms consumers on their labels.

I believe that the whole commercial communication campaign should deal with acorn ham and ‘cebo’ ham as equal, for the two are high-quality “Iberian” products with an excellent flavour in comparison with the rest of hams. The communication must focus on the descriptive and not on the comparative, for any communication that might run down ‘cebo’ as Iberian also harms the acorn ham.

I know that most of the sector has crossed interests with both types of ham, but I believe it is possible to give prestige and sell a lot of ‘cebo’ ham without using and harming acorn ham or confusing consumers“.

This was the article written in 2011 and extended in the same year. At this point it is worth mentioning that in June 2012 we stopped working for ASICI of our own will. This decision is due, on the one hand, to the fact that I do not believe there is unity in ASICI in the will to inform consumers, restaurants, distribution, etc. of the true differences between each type of Iberian ham. We can see this in several ways: they continue to confuse consumers on the labels of their ham by giving images of acorns and Holm oaks; images of the forest have once more been used in a television commercial when this image only represents a small part of the sector, to give but one example.

What’s more, in our stage working for ASICI, any descriptive and informative proposal from Agr! was understood by ASICI as comparative-misdemeanant, which created tension in which it was very difficult to work. Given the lack of will on the part of ASICI to inform, all of these circumstances added up and our team reached a conclusion: they believed it was impossible to achieve the objective that ASICI had originally commissioned us (that 90% of Spanish society should be able to distinguish and correctly assess each category of Iberian ham within two or three years), so the most honest and professional thing to do was to leave the customer.

Summing up, my collaboration with the Iberian sector ends with the conviction that its union is against nature as there are two totally different types of products with the same name of “Iberian” (something which should never have been allowed). This situation is ruining acorn Iberian ham producers so although it is difficult to separate the sub-sectors of acorn and cebo (and the rest of producers of white pork ham), as many people in the extensive sector have been forced to work with cebo in order not to disappear, in my opinion this is the most recommendable option.

My recommendations for the extensive sector following separation are:

  1. For all products and industrialists with interest in the forest to come together in some kind of association.
  2. Given that what is truly distinctive in the sector is the place of production (the forest) and the feeding (acorn), acorn producers must create a distinctive stamp on their products which says, “product of Iberian forest” or “produced in the Spanish forest”. We must not forget that otherwise nothing will prevent Iberian cebo ham from being produced in China.
  3. To inform the whole of society of the reason for the separation and the value of the new stamp.

 

After this “tale”, revision and analysis, I do not want to conclude without saying that both products, acorn and cebo ham can be excellent and competitive and that they must coexist (alongside the white pork) but in a transparent market in which consumers are given the full information on the origin of each of the products and are allowed to choose between them.

 

ad