Branded Produce & Merchandising AEC 317 Fall 2014

Branded Produce Building Consumer Equity Quality Safety Trust 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.

Processed Brands Some processed brands continue to be successful –Dole –Red Gold Tomatoes –Ocean Spray

Some well-known brands are in trouble Challenges with international sourcing International trade disputes Eroding 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 merchandising Putting brands together for new product concepts Chips & salsa Wine & cheese Strawberries 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 CommissionIdaho Potato Commission –National Watermelon Promotion BoardNational Watermelon Promotion Board –US Highbush Blueberry CouncilUS Highbush Blueberry Council Substantial emphasis on product health

Merchandising Health Benefits Product attributes –Blueberries, red wine & antioxidants –Watermelon/tomato & lycopene, heart healthy –Nuts & protein, Emerald Nuts 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 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 (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