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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



WHAT IS IN A BRAND?
Will Marketing Boost Sales
Of Inconsistent Produce?
Industry Issue vs. Individual Opportunity

Jim Prevor’s Perishable Pundit, April 7, 2015

After PMA announced its million dollar contribution to a new effort to promote produce consumption to consumers, we wrote a piece titled, Solving The Right Problem, in Pundit sister Publication PRODUCE BUSINESS.

Much of the piece was devoted to the question of how we know what is the right problem to solve. For example, we pointed out that something that might possibly have a great short-term impact, say a new salad bar, could, if children put together bad combinations, be less effective at boosting long term consumption than giving the children composed salads that have been carefully designed to be easy to digest and delicious. So the dilemma for the industry becomes: Is the problem getting children exposed to fruits and vegetables, or is the problem making sure children eat produce that is deliciously prepared?

In addressing PMAs initiative, we were interested in the question of whether the trade’s problem is actually a lack of marketing. Here is what we wrote:

…the Produce Marketing Association recently unveiled its support for a major new marketing campaign for the industry — contributing $1 million to kick it off. The campaign is being led by the Partnership for a Healthier America and is basically a marketing campaign to promote fruit and vegetable consumption.

There are many things to be said about these efforts, but one of the more interesting questions is to assess whether the problem holding back consumption is inadequate marketing. Of course it is well known that Coca-Cola outspends the entire produce industry on marketing — many times over. And it is easy to focus on this fact. In fact, many in the produce industry like to focus on this fact because it implies that they are doing everything well and the problem is beyond their control. “If the industry had access to the Coca-Cola marketing budget, then consumption would boom.”

Well, we bow before no man in our respect for the power of proper marketing, and individual companies can certainly differentiate themselves through marketing efforts. But whether the industry’s issue is really a lack of marketing is most uncertain. Many a peach sold is virtually inedible. Children love blueberries, but the sweetness is irregular, and even the same brand of “easy peel” citrus peels inconsistently through the year.

In other words, produce is very unpredictable. Today, marketing an individual company’s produce under a brand umbrella might make sense. Love Beets can be consistently delicious; POM juices never vary. Branded items can consign lower quality to a different label. But the industry as a whole can’t distinguish — it markets lousy produce along with good. It has no mechanism for excluding anyone or anything.

Is the trade’s problem really a lack of marketing? Or is it inconsistent product that often disappoints the promise any marketing effort would make to consumers?

In other words, you can’t put the cart before the horse. Branding involves a promise to the consumer, and if the brand can’t consistently deliver on that promise, the marketing will just insure that consumers get dissatisfied faster.

If you are interested in a luxury vacation, you may sign up to stay at the Four Seasons — indeed you may do so blindly, never having seen the resort, because you trust that the Four Seasons brand will bring a very high-end luxury experience. Indeed, you may pay a premium to stay at the hotel just because of the name. But it is not just the name — it is the consistent delivery, the brand promise-keeping, that justifies both the purchase and the premium.

Now if Four Seasons can’t deliver on that promise — if sometimes you got a high-end experience and sometimes you got a dump, very soon, all the marketing dollars in the world wouldn’t help.

We note that Bolthouse is behind a lot of these initiatives, indeed PMA seems to showcase Bolthouse as an example for the industry. The thing about Bolthouse, however, is that Campbell’s Soup didn’t pay $1.5 billion in order to grow some carrots.

In an interesting presentation to Wall Street Jeff Dunn, President of Bolthouse made the point whereas the actual carrot category is growing 3% a year, the beverage category is growing 15% a year and dressings 6% a year. Bolthouse itself was seeing 24% growth in its refrigerated dressing sales and a two-year compound annual growth rate on beverages of 15%. Put another way, for a company such as Bolthouse, money spent on marketing fresh produce is a great idea because Bolthouse sees that marketing as a halo for the sale not just of low margin fresh produce but also of fast-growing and high margin dressings and juices.

This is great and we wish the people at Bolthouse all good fortune. We admire many of the very innovative and clever things that Bolthouse is doing — catch the website game here — but, truth be told, Bolthouse is an entirely different position than 99% of produce companies and will profit from marketing in a way that these other companies can’t.

There are a lot of things about initiatives of these types that raise questions. Typically they get good funding for the first year or two and then the funding dries up. Then there is the question of rollout potential… the initial campaign is to be conducted in two small cities — Fresno, California, and Hampton Roads, Virginia — plus there will be some national social media efforts. It is budgeted at $5 million.

So let us be optimistic and assume it actually works, consumption goes up in those two cities, and let us assume good research is done to prove that.

Those two cities have a population of approximately 2.1 million and the US population is 320 million, so a national rollout on this scale would cost about $762 million. Is that a feasible amount to raise under any circumstances?

The real question is will it work? Last time the industry considered the possibility of a national campaign, we profiled the discussion here. The industry didn’t see enough potential to fund it. This time PMA provided the start-up industry funds, but the question of whether it will boost consumption remains.

We, of course, hope this works. We want PMA’s investment of $1 million to earn great returns for the industry and merit expansion of the program, but we are not certain that the problem is correctly identified. Until we can promise consumers that if you buy a peach, you will get a delicious peach-like experience, it is unclear that blowing our horn to consumers will actually help.

After we wrote the column in PRODUCE BUSINESS, the head produce executive for one of the top five produce retailers in America sent a note:

Just had to send a word of encouragement.

Loved your article. You are right on message. “Marketing” is an individual issue/opportunity. “Flavor” is the real industry issue/opportunity.

Well done!

When thinking about Coca-Cola’s marketing budget, it is worth remembering that every bottle of Coca-Cola, everywhere in the world, tastes exactly the same, every single day. It is the consistency of that promise that makes branding possible — and marketing profitable.

So how do we, as an industry, build this prerequisite for successful marketing investments? Perhaps that is the question.

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