Archive for 'Observations'

Brand Exposure Is Not Always Positive

chiquita I took the photo recently on the main railway station in Munich. I am digging it out again because I have been contemplating the DOLE position vis a vis the Oxfam report on banana plantation ethics. On one hand, here is DOLE trying to position its fruit at the sustainable/ethical/credible end of the supply spectrum. On the other hand, CHIQUITA is busy trying to break out from the produce shelf, aiming its offer direct at the consumer.

There is a common theme here. Both companies have built up considerable brand equity in their brand over the decades. Naturally, when one is in such a position, one can be forgiven for looking for arising commercial advantages. In both cases, it involves a positioning exercise with the consumer. Which approach is more plausible do you think? Saying to commuters, “hey look, you can also trust my brand when it comes to buying quality and healthy fruit, fruit snacks and juices for you to eat on your train journey” – or telling shoppers, “we believe we are good corporate citizens and are prepared to tell you that by way of a label to that effect on each bunch of fruit?”

I don’t actually think a straight comparison is possible…but both efforts would not have been undertaken lightly because no business owner goes and deliberately exposes his brand to unnecessary risk. Any new development or initiative undertaken in companies with a high degree of brand equity will sooner rather than later trigger the question, “Do we fully understand how this possible decision would impact on our brand?”

So at the very least , we need to assume that DOLE has not rushed like a headless chicken into a situation where they issue labels which blatantly provide incorrect information. A more likely scenario is this: DOLE would have over the years invested considerable sums into improving the working environment on the banana farms and through that the living standards of employees. Results would have been measurable, prompting the DOLE marketing department to come up with the label approach. The marketing guys would not have had any qualms about this approach, because they believed the results were visible and the campaign justified.

Unfortunately, the discerning first world consumer with a bend towards sustainability, fair trade, political motivation and a transfer of wealth from developed to developing nations cannot agree that the level of positive changes achieved warrant the label and the campaign. Particularly in New Zealand where three vocal people can represent a pressure group which Government is prone to listen to. On any topic…not just bananas.

Then there is the small matter that the charity crying wolf about DOLE’s label happens to be supporting a competing banana project… where are the ethics in that?

In the meantime, DOLE has done the decent thing and suspended the use of the label.

If my attitude towards marketing managers sounds a bit cynical – I remember a Foodtown marketing manager who had a giant guillotine built for a TV commercial. He parked the monstrosity at the top of the Whangaparoa Peninsula cliffs, and filmed cabbage and other unsuspecting produce being chopped in half and chucked down the cliff onto the beach in an attempt to convince customers that produce prices had been permanently reduced…Needless to say, the campaign was a total flop.

And I will, by the way, read the Oxfam report and comment more in due course.

The Role of Fruit & Veg In Our Society

I HAD POSTED THIS CONTRIBUTION A COUPLE OF YEARS AGO…THINGS DO NOT CHANGE THOUGH.  THE CURRENT DEBATE HERE IN NEW ZEALAND ABOUT THE NEED FOR A “FOOD IN SCHOOLS” PROGRAMME IS HIGHLIGHTING THAT THE PROBLEM OF PRODUCE PRICE PERCEPTION IS ALIVE AND WELL. BUGGER.

NEAT AND TIDY PRODUCE DISPLAY

NEAT AND TIDY PRODUCE DISPLAY

 

I have discussed fresh produce pricing on a number of occasions – as those who visit here regularly will have noticed.

Well, I had an epiphany last week.  I think I have the answer to the problem of fresh produce pricing…

I was listening to the segment on National Radio where they rattle through the headlines from the New Zealand newspapers around the regions and one headline caught my ear – enough to make me look up the news item in question from the Dominion Post.

So, what are the issues again?

People need to eat fresh fruit and veg.  But the price of fresh produce is too high for people afford, so their health is at risk, according to nutritionists.

Growers need to make a living from growing and supplying fresh produce.  But the price of fresh produce is too low for them to do that, so their livelihood (and our food supply) is at risk, according to growers.

“Somebody” isn’t prepared to pay growers a high enough price for their produce and that “somebody” is being driven by the behaviour of the consumer.

So who is driving this consumer behaviour?  The influences are many and varied, ranging from the mother-in-law, the school, the mommy bloggers, the kids, nutritionists in the media, the consumer’s own perception and so on…

I’m going to stick my neck out here:

the glass ceiling for fresh produce prices exists to a large extent because people like nutritionists persist with pushing the idea that fruit & veg should be cheap!

Here’s my answer, then.

What needs to happen is that the fresh produce industry takes the nutritionists in hand and makes them understand the commercial realities of growing fruit & vegetables, so that the nutritionists’ ability to influence can be harnessed better in correctly position produce on the consumers’ plate.

David Smith – Pony Finder Extraordinaire

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© 2013 Chattanoogaville.com

Many of you would have heard the following story before, in one form or another…

“One day a scientist decided to run a test on two boys. He took the pessimistic boy to a room full of new toys, telling him that they were all his. He immediately began to cry saying that one day they would all break. He then took the optimistic boy to an old barn which contained a huge pile of fresh steaming horse manure. The boy was immediately excited, grabbed a shovel and began digging in the manure. The stunned scientist asked the boy what he was doing. The boy immediately responded that with all this horse manure there has to be a pony in here somewhere.” (Anonymous).

And we have all been watching the fall out at Turners & Growers with great interest…

Well, if there is one guy in the New Zealand produce industry who has over decades consistently displayed great aptitude in finding the pony, then it would have to be Dave Smith at Freshmax.

Snow Hardy, Terry Brown and now Alistair Petrie are a right little troika of ex T&G ponies to emerge at Freshmax.  I would suggest – watch this space.

And now, for some thing completely different, here is a link to a famous Monty Python sketch, where John Cleese is teaching his colleagues how to defend themselves against being attacked by fresh fruit.  The banana segment is especially worthwhile watching.

CASH NOT WELCOME HERE

I have grown up with a few motherhood statements and I am sure I am not alone with that. Here are three I remember from my early childhood; I was probably three years old…

1. Do not cut potatoes with a knife. (very German piece of useless etiquette)

2. Vegetables are good for you. (Debatable from a child’s perspective)

3. Money buys sweets, toys & icecream. (Later supplemented with beer, wine & cigars)

Money at the time was defined as folding stuff and round metal disks of various sizes which made a racket in one’s pocket – or fell out if one ‘s mother had not done her job properly.

In latter years, cheque books, credit cards, debit cards, chip cards and electronic transfers made it into my arsenal. Nothing, however, prepared me for this Dutch store that rejected my cash.

It looks like society is heading for a major paradigm shift in the not so distance future.

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Horticulture & The Trans-Pacific Partnership

Fruit Logistica, Berlin

Fruit Logistica, Berlin

By default, blogs are global in nature.  The topics discussed may at times be quite parochial but I, for one, see no sense in using a tool with instant access to the world for the purpose of discussing local issues.  If I have a local gripe, I write a “letter to the editor” at the local rag.

And yet…

Today is one of those ‘and yet…’ days.

Today, I want to discuss what I have read recently in a USDA publication and put it into a New Zealand perspective.  Pretty local, eh?

The matter on my mind is trade and specifically the potential ramifications of the  Trans-Pacific Partnership proposal involving Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam.

Whenever someone mentions trade opportunities in New Zealand, and tariff reductions, one thinks ‘agriculture’.  The next branch of that thought stream are dairy, beef and lamb, as many New Zealanders  still haven’t got a clue continue to be slightly challenged when it come to naming other export success stories.

Kiwifruit gets a mention from time to time – although recently more in connection which how one should not go about managing one’s market access issues and the real adventurous amongst us might fondly remember the perceived hold ENZA had on the global market apple market but other than that, horticulture rarely gets a mention in despatches.

Behold!  We are not alone in feeling neglected…here is how the US Department of Agriculture views that matter.

“One subsector of U.S. agriculture, the sometimes overlooked horticulture industry, shares a strong interest in the outcome of both negotiations, as fruit and vegetable trade patterns continue to be influenced by a range of trade-distorting policies. The horticultural sector faces a large number of high tariff rates as well as tariff-rate quotas (TRQs), some of which are characterized by cumbersome administrative procedures and over-quota tariff rates at trade-prohibitive levels. Moreover, phytosanitary and technical measures have affected trade by limiting or blocking imports of select horticultural products into world markets.”

Oh, really? All sounds familiar, doesn’t it?  So, being able to articulate the problem so well, might our American colleagues also have a solution to the problem?

Well, before they attempt that, they actually do a good job at scoping the challenge further.  They identify “four key long term factors” they hold responsible for the increase in global horticultural trade we have seen in recent years;

A growing middle class in emerging countries – and we sure have observed that as well, in China, India and Indonesia to name a few of our markets.

Technological innovation in transport and communication – yes, well, I can’t argue with the communication perception, I am writing this blog for all the world to see the instant I post it.  Transport? There is increased containerisation; bananas being a classic example and the container vessel are getting bigger….in fact too big to berth in New Zealand

Global consolidation of the grocery trade – yes, most certainly a trend that is not showing any signs of slowing down. And it does, of course, create supply chain efficiencies.  But as we are dealing with produce that comes in all sorts of perishable shapes, flavours and sizes and not light bulbs or Pinot Noir, “ueber-effeciency” in supply chain optimisation has the habit of producing nasty side effects.

The various trade agreements put in place since 1995 – true, but we still publish an annual report in this country on how the remaining tariffs limit our ability to move forward the way could if we were let loose.

The USDA report then analyses the US export and import position for horticultural products in some detail to reach a general conclusion of sorts — that an increased demand for US fruit and vegetables should be expected in the prospective partner economies, ours included.

Where to from here then?

Well for starters – have we looked at the impact of the TPP negotiations on New Zealand horticulture?  What are we likely to see entering the country as a result of these?  Any Biosecurity considerations we might want to consider?!?

What can we sell that we are not selling already?  Whom to? In what quantities?

Here is a fact sheet on the New Zealand horticulture industry, just 12 months old.  A good starting point for anyone interested in looking for opportunities.

Good luck.