Small Farms building Global Brands through Social Networks Seminaire International 2 – Indications Geographiques December 2010, Antalya, Turkey Dr. Domenico Dentoni University of Adelaide, now at Wageningen University Prof. Thomas Reardon Michigan State University (USA) The case of Italian Extra-Virgin Olive Oil Producers

Introduction It is crucial to build Collective GI Reputation & Individual Actor’s Reputation jointly in the marketplace: An effective collective action builds GI reputation BUT individual actors have to link with customers and build market channels (locally or globally) With individual reputation, small actors gain sustainable competitive advantage in their niche market -> Social & Environmental benefits Problem: Small Farms’ marketing constrained by: High costs, limited human & financial resources

Introduction In this study we explored: Opportunity for Small Farms to Build “Global Brands”: Building a Net of Social Relationships (i.e. Network) with “High-Status” Third-Party Actors Signal of Quality which goes much beyond the GI (in terms of consumer value and buyers’ price) and May be Financially Cheap May be Difficult to Imitate

Grounded Theory Data Theory Ag Economics Third-Party Certifications & Retail Transformation (Reardon) Sociology Status (Podolny 1993, 1994) Social Ties (Granovetter 1985; Uzzi 1997) Marketing Familiarity with Product Consumer Evaluation of Intangible Attributes of the Product Primary Data from 34 Small Producers, 14 Importers and 4 Deli Store Managers in US Open Interviews: Define the problem Identify the Variables Semi-structured Interviews: Measure the Variables

Instrumental Case Study Italian Small Extra-Virgin Olive Oil Producers < 10 employees, ,000 liters bottled 24 exporters, 10 domestic (but actively attempting to export) Purposive Sampling USA Europe Asia & Oceania

Social Ties with “High Status” Actors US Consumers US Distributors Importers Italian Producers Web&BlogsPublic AgTr. Guides NGOsTr. GuidesEventsJournalistsChefsPersonal TastersJournalistsPersonal Transaction, product flow Social Tie, info flow

Social Ties: Effects & Drivers Direct effects on Third-Party Endorsements 18 out of 24 with endorsements had social ties (75%) Ultimately, effects on Brand Equity Choice: all exports started with third-party endorsements (100%) Gate Price Premium: 17USD vs. 11USD (controlling for acidity) Brand Associations & Perceived Quality: endorsement is used to communicate with final consumers Drivers of Social Ties: 7 out of 18 based had social ties as path-dependence (40%) 11 out 18 developed social ties with clear market purpose (60%) – Slow Food Presidia, Tasters, Chefs, Journalists, Consultants

The Proposed Model: Effects “High-Status” Third-Party Endorsement of Small Farm’s Brand Small Farm’s Global Brand Equity Consumers’ Familiarity with Product P1 P2 Consumers’ Evaluation of Credence Attributes P3

The Proposed Model: Drivers Small Farm’s Social Ties with “High-Status” Third-Parties “High-Status” Third-Party Endorsement of Small Farm’s Brand Small Farm’s Initial Status P4 P5 P6 International Market Information ! Small Farm’s Capabilities

Managerial & Policy Implications Small Farms’ Owners & Managers: Opportunity for Sustainable Competitive Advantage Access & Use of International Market Information Public & Public-Private Organizations: If “High-Status”, then endorse products directly, otherwise no! Provide market Information on – International Markets – “High Status” Actors as potential Endorsers Provide Training on How to use Market Information – Develop Individual Actors’ Entrepreneurship, Market –Sensing Capability

Teşekkürler! We look forward to keep discussing with you on these issues. Contact: Domenico Dentoni, Full paper reference Dentoni, D. and Reardon, T. (2010) “Small Farms Building Global Brands through Social Networks” Journal of Chain and Network Science, Dec 2010 (In Press).