Branding stories from the Agri-business
A brand gives an identity to a commodity and desirability to purchase. Not only does it help in quality assurance, but also repurchases have often been allied with good quality branded products, thereby increasing loyalty among the customers. Majority of agri products in India are sold to the market as commodities. However increasingly it is observed that there is greater opportunity to make profits by selling branded produce. Branding efforts in agri-business in India owe their genesis to Basmati rice and since then has been extended to Darjeeling tea and other products. The efforts though, are minuscule compared to the opportunity available. While the domestic market is fraught with its own unique challenges, branding is the need of the hour in the export market. Branding is the way for developing countries to be a force of reckoning in the global food economy.
Typically, agri produce branding has been linked to the geographical regions where they are grown. Think of cheese and wine from France which carries the “appellation d’origine contrôlée certificate” and the prestige that it enjoys. However, developing countries like India are at a disadvantage. Products from developing countries are always viewed with suspicion and a higher discount is expected by consumers in the developed world. However globally, there has been success demonstrated by developing countries in creating strong agri brands.
Brazil – Viva Tango
Brazil has one of the top rated agri branding programs. Not only has Brazilian coffee been promoted extensively, but also branding programs have been in existence – Brazilian fruit, Brazilian chicken and even Brazilian Lobster tail! Brazil holds seven percent of the world’s agricultural commodity market and is the world’s third-biggest exporter of agricultural products. Agriculture is the most globalized sector of the Brazilian economy, accounting for 25 percent of GDP and 36 percent of exports. Brazil is the world’s leading exporter of: red meat (24 percent of the total), chicken (39 percent of the total), sugar, alcohol, orange juice, coffee and tobacco.
Part of Brazilians’ success can also be attributed to their acumen in market selection. Brazil’s focus for export is not the US or EU where they face trade road blocks, but the other developing countries. They understood that the greatest potential for growth in food and agricultural trade is among developing countries due to the large population and the rising income growth. Now Russia is the main buyer of Brazilian pork while Egypt is the main importer of Brazilian fresh beef and China is the biggest importer of Brazilian soy beans. Brazil has followed a strategy of diversification, globalization and brand differentiation, thereby reinventing Brazilian agricultural produce. The country today is seen as a producer of many high-quality products.
Colombia – Rebranding a nation
A well thought-out branding program for agri produce will do a great deal in even building the country brand. Perhaps the best example would be Colombia coffee. Colombia for a long time was synonymous with crime and narco terrorism until the Colombia coffee program came along. Similar to Brazil’s branding efforts, Colombia’s Coffee Growers’ Federation took the initiative and started building a brand for their product back in 1959. They created the strategy that built recognition and distinction for 100 percent Colombian coffee. The aim was to emphasize coffee’s origins, on the same lines as Bordeaux for wine. It was successful too. Although it only grows about a quarter of Brazil’s coffee harvest, it is Colombia’s coffee that has the reputation for quality. Perhaps that has been the only positive thing about the country and it has changed the overall impression of the nation itself!
Experience, across the world, indicates that aggregation and quality is a precursor to branding agri- business
Geographical indicator is a great tool for branding agri produce. Till recently, about 31 agriculture products including Darjeeling tea and Alphonso mango have got GI registration. Currently, the action related to GI appears concentrated on the registration of GI goods and has not made any headway in adoption of strategies for branding and promotion of GI products as well as their marketing and distribution in both domestic and export markets. It needs to be noted that GI coupled with effective marketing can mean greater profits to the local producers.
Lobster tail turns gold
The story of Brazilian Lobster tail is a case in point. Interbras is an export promotions board set up by the Brazilian government in 1976. One of its most successful ventures has been to organize the collective marketing and branding of lobster tails. Interbras recognized the opportunity to increase Brazil’s penetration of the large US market for lobster tails. They set about organizing the fishermen in such a way, as to ensure reliable supplies and to develop a strong brand identity. Interbras was initially able to convince about 50 percent of the fishermen to give them exclusive rights to export their lobster tails to the US. In return, Interbras gave them a better margin than the fishermen had been getting through the importers. Interbras offered a firm price to both the fishermen and to the brokers and in each case that price was guaranteed for a three month period. Moreover, whenever Interbras exceeded its target margin, surplus profits were channeled back to the fishermen.
Subsequently, Brazilian Seafood Marketing Associates (Brasmar) was formed. Brazilian lobsters were packed in good quality cartons bearing the ‘Brasmar’ label giving the product a single brand identity. The product was promoted on its quality attributes and so, was positioned as a direct competitor to South African lobsters. A rigorous quality control system was instituted to ensure that the brand image was sustained. Suppliers who consistently failed to meet the quality standards set by Interbras were ultimately excluded from the scheme.
As for the South African product, restaurateurs are the principal buyers of Brazilian lobsters. Brasmar recognized that in addition to reliability of quality, the restaurants were concerned about portion control and were therefore interested in buying a product of uniform size. Interbras developed a grading system with 14 size categories instead of the 6 category system used by others. This augmentation of their product was well-received by buyers who could then purchase a carton of lobsters, knowing that it contained lobsters of uniform size.
The success of Brasmar can be measured in a number of ways. Perhaps the most important of these is that 85–90 percent of Brazil’s lobster fishermen now collectively market through Brasmar and the organisation is able to claim that their marketing system brought US$6 million more into the country than did the system it largely displaced.