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Pundit’s Mailbag — Generic Promotion Plan Does Not Allow For Differentiation

Jim Prevor’s Perishable Pundit, June 12, 2009

As part of our analysis of the proposed Generic Promotion Program, we ran a piece titled Got Produce? Has PBH Been Effective At Boosting Produce Consumption? The article brought this thoughtful assessment from an important importer of mango and various tropical items who has served as a board member of the National Mango Board:

The Produce for Better Health Foundation might have had more success in increasing consumption if we would have produced a cantaloupe that actually tasted like the muskmelon I have eaten as a kid instead of like the cardboard we now often experience; or if the consumer would have picked up a peach from Chile that wasn’t tasteless and brown in the center; and yes, even in our (my) business with mangos, there is nothing more tasty than a ripe mouthwatering Kent, yet the demand is for the hard, fibrous Tommy variety.

Point is the industry has not helped much. However, there are signs that point to the direction we need to take. Look at the increase in consumption of ripe avocados, or the “Summeripe” fruit program, and yes even in our mango business this year with the yellow ataulfo tasty mango and the support of the National Mango Board. Increases here are off the charts.

So, I agree with you — the industry needs to go back to the drawing board; we need to look at the taste and flavor of the product we are delivering and after we have done all this, then we need all segments of the industry at the table to discuss the concept of generic promotion.

Good job here!

— Bill Vogel
President
Tavilla Sales LA
Los Angeles, California

Bill raises important issues in his letter, issues that require contemplation, perhaps uncomfortable contemplation, for many in the industry.

There is little question that marketing and advertising can be effective in boosting demand, but they are not the right strategy in every time and every place. Sometimes Job One is product development.

When Bill alludes to flavorless varieties, poor care and handling that robs consumers of peak flavor, and merchandising decisions that put being “First” a higher priority than offering tasty produce, he reminds us of some of the real weaknesses of our industry.

Indeed generic promotion, which inherently has a tendency to commoditize the product, reduces the incentive to differentiation.

And for those who have produced superior product for which consumers are willing to pay a premium, the way this particular proposal has been set up actually penalizes them.

The Mango Board collects a flat fee per pound. If a producer offers a more flavorful product or adds value through its consistency or branding, it gets to keep any premium.

Yet under the proposed national program, a producer who merits a higher price will pay more in the assessment because it is based on price, not pounds. The cheapest, lousiest produce pays the least; high quality product in high demand pays the most — yet the generic advertising will never distinguish between the two.

So, actually, the way the proposal is written, high quality producers will subsidize the marketing for low quality producers. There is something terribly unjust and unsettling about such an arrangement.

Bill also alludes to the question of where resources need to be put. If we are going to promote highly differentiated product, say ataulfo mangos or full-flavored stone fruit or ripe avocados — is that kind of promotion best done by a national board representing dozens of produce items?

Wouldn’t it make more sense to do that kind of highly specific marketing either through commodity-specific promotion programs or via private branding?

And will this national board, obligated to sell canned pears and frozen mango as well as fresh, be well positioned to sell the differentiation of quality products?

So Bill raises two key questions: First, isn’t the real obstacle to increasing consumption not a matter of marketing, but a matter of product incompatible with consumer desires? Second, isn’t the kind of marketing and promotion we need really micro-focused on those products that delight consumers and more likely to be done closer to the product than by a national bureaucracy.

The proposed national program does not include organics. This is because the organic folks feel, with legitimacy, that the various generic programs do not sell what they have to offer: The competitive differentiation of organics. They got Congress to write them out of these programs.

Yet we suspect the board will do no better job of promoting other forms of differentiation and added value. In the dairy, beef, pork and other industries, this doesn’t really matter. A cow is a cow, and enhancing demand for any dairy product helps raise demand for milk; increasing demand for any cut of beef raises demand for the animal.

In produce, however, if a producer specializes in a particular product or a particular value-add to the product, it is only through promotion of that particular product or attribute that the producer canprofit. Yet there is zero assurance that any particular attribute — say vine-ripened product — will be promoted.

The truth is that there are great tasting melons out there — just like Bill remembers. There is good tasting stone fruit and wonderful mangos. Yet a national board, obligated to all producers, is unlikely to be the tool to market these differentiated products to consumers.

We thank Bill Vogel and Tavilla Sales LA for helping the industry talk through such an important issue.

As a little bonus thought you might enjoy listing to a couple of songs about some of the items Bill carries. Here is the Rambutan Song and The Mango Selling Song both written and performed by Bobby Locke, a salesman for Tavilla Sales Co. in Los Angeles.

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