I knew when I reserved my room for the Canola Council of Canada’s convention in San Francisco that it would be a nice joint. How did I know that? Because it is the Fairmont hotel. The Fairmont hotel is about the most expensive hotel in Winnipeg. Around the world it’s got a swanky reputation.
And sure enough, as the taxi drove me up the incredibly steep streets here, just like in the Rice-a-roni commercials, we left below skid row and the local rubbie set and seemed to head up and up higher through fancier levels of society to the top of Nob Hill, where the hotel and a couple of other great heritage wonders sit. The lobby’s like a movie set. And as I walked down the hallway to my room, I couldn’t help but think I was in a movie. Unfortunately the movie that came to mind was Barton Fink, but this place isn’t run down and there’s no psychopath with a shotgun here. I digress . . .
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When I got into my room I was parched from the desiccating effects of the flights from Winnipeg, and I went to the in-room bar and picked up a Diet Coke. But a little voice at the back of my brain whispered: “Ed, check out the price list first.” Golly. $5.50 for a semi-cold can of Diet Coke. I put the can back and backed away from the mini-bar.
But there you have it. That’s the power of a brand and a reputation. You deliver a quality product and you can extract huge premiums from the marketplace. Let’s do some math here: I can buy a flat of 32 cans of Diet Coke at Costco for about 10 bucks. That works out to about 30 cents each. So at $5.50 per can, the Fairmont is getting a 1,700 percent markup or so. Nice.
That’s the kind of thing they talk to death about here at these kinds of conferences. Most of the people who matter in the canola industry are likely to be down here tonight  (mostly out drinking green beer right now, methinks, or at a fancy Nexera soiree that I was too late to attend), and tomorrow they’re going to be talking about the premium value of canola versus other oils and other meals. Quality differentiation is absolutely essential to canola because neither the industry nor the farmers who grow the stuff want it priced as if it’s just a soybean, palm or corn oil. Those all have much higher yields in the U.S. Midwest and our smaller yields need to bring with them a bigger buck to compensate.
Most years the council talks almost exclusively about the oil and its qualities, but this year, as I mentioned in my last post, they’re having a panel on the California dairy industry’s use of meal. That’s going to be interesting.
So I’m going to go out now, even though it’s late. I’m not going to head out for the green beers of St. Patrick’s Day. I’m tired from the trip and the lingering effects of having two girls under the age of three who keep me running. But I need a couple of Diet Cokes before bed. And even though this is a fabulously swanky hotel, I just can’t justify paying some premiums.
