Branded Produce& Merchandising

AEC 317

Fall 2014

Branded Produce

Building Consumer EquityQualitySafetyTrust

Product differentiation – attributes of the product that are difficult for other like products to emulate

A product brand “is the combination of name, words, symbols or design that identifies the product and its company and differentiates it from competition.”

Source: Giddens, Nancy. “Building Your Brand.” Ag Decision Maker, Iowa State University. http://www.extension.iastate.edu/agdm/wholefarm/html/c5-50.html

Processed Brands

• Some processed brands continue to be successful– Dole– Red Gold Tomatoes

• http://www.redgold.com/our_family/history.html

– Ocean Spray• http://www.oceanspray.com/

Some well-known brands are in trouble

Challenges with international sourcingInternational trade disputesEroding brand value

Commodity groups making significant effort to develop their brands(more on that later)

Extending from Processed Products

• Declining demand for processed vegetables

• Rising demand for fresh

• Build on name recognition previously developed

Green Giant Fresh

Cross merchandisingPutting brands togetherfor new product concepts

Chips & salsaWine & cheeseStrawberries and shortcake

+

Cross merchandising

Line Extensions

• Brands developed for one product (broccoli) are extended into further lines and products

• More shelf space• More retail exposure• Challenge of new

slotting fees

• New product development

• Branding fresh cut processing

• Convenience

Merchandising

• In-store promotions, point-of-purchase, coupons, displays

• Category Management – inventory placement, point-of-purchase promotion, and display with a view toward maximizing category performance

Merchandising

• Use of contests• Cross merchandising• Seasonal displays• Working with specific

or niche commodities• Working with local

producer groups

Northwest Organic Pear Merchandising Sets

Merchandising• Also major role played

by promotion commissions– Vidalia Onions– Idaho Potato Commissi

on – National Watermelon

Promotion Board – US Highbush Blueberr

y Council

• Substantial emphasis on product health

Merchandising Health Benefits• Product attributes

– Blueberries, red wine & antioxidants

– Watermelon/tomato & lycopene, heart healthy

– Nuts & protein, Emerald Nuts

• Production Systems– Organic, natural,

IPM

Merchandising Social Values

• Fair Trade Products

• Sustainability and Organic

• Eco-Labels

Source: The Food Institute Report, Oct 18, 2010, The Packer, Oct 11, 2010

National Promotion Initiatives

• USDA 5-a-day (now 5 to 9-a-day)

• Generic promotion in-store programs

• School nutrition efforts targeting better child health

National Promotion Initiatives

• Farm to School

• USDA Fresh Fruit and Vegetable School Access program

• Food and Nutrition Assistance Program

Branding State Produce

• Typically supported by state departments of agriculture

• State-retailer merchandising partnerships

Branding State Produce

• Grow local-buy local programs.• Is there a justification for public funds

promoting local produce?– Infant industry/local economic development– Security for local food supply– Off set promotion from other production

regions– Customer product and information demands

New “Buy Local” Merchandising in Lexington-area Kroger

Programs in Kentucky

• Kentucky Department of Agriculture

• http://www.kyagr.com/• Labels• GAP training

certification• Restaurant Rewards

• Value-added food products

• Web site marketing• Farmers Markets• Farm-to School

Program

KDA Programs• Farm to School

– 702 schools in 60 Kentucky districts buying local KY foods

– Impacting 363,819 students– $1.6 million invested in 2011-12 (3.17%)

Source: USDA Farm to School Census

Do state loyalty programs work?

• In some cases, Eastwood study (TN)– Recognition positively affected by income,

family size, age– Recognition negatively affected by occupation,

gender (men), college

• SC study estimates a 6:1 benefit cost• Popular with grocery and restaurant retailers

looking to make a connection locally