MEDICINE HAT, Alta. – Product branding is an established marketing tool used around the world. And cereal farmers are looking into how they may be able to reap the benefits of that strategy.
Mike Leslie with the Alberta Barley Commission said his organization is looking at the possibility of branding barley.
“Brands are promises companies make to you. In exchange for that promise to you, they’re hoping you’ll give them your loyalty. We’re hoping this approach can be used for cereals,” said Leslie.
Agriculture Canada has set up a Brand Canada program, which aims to attach a Brand Canada sticker on Canadian food products.
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“There would be Canadian Salmon, Canadian Beef, Canadian Pork, and one of the things we’re looking at is, should there be Canadian Wheat and Canadian Barley.”
Leslie sits on the cereal round table group and a barley subcommittee that are studying the issue. But questions must be answered about which products should be included and how specific to make the brands, he said.
“Should we have Canadian barley, Alberta barley, hulless barley, high beta glucan barley? We’re trying to figure out what we should brand and what’s possible to brand.”
There are also questions of what the brand should stand for and whether buyers are willing to pay more for some products.
“Could we get a premium for our grain, or would customers be more likely to shop in Canada for that grain, if they knew it came with an environmental message? We could say this grain came from a farm with an environmental farm plan, or it came from a farm where the cereals were raised in a zero till environment, or fertilized with a natural manure, or land with riparian areas maintained, keeping birds and fish alive.”
As well, food safety messages touting healthier products and traceability branding must be explored.
“In Japan there’s a vegetable company where you can pick up a can of their corn, scan the bar code on it and it’ll tell you the farm that grew that corn. You can see a picture of that farmer, his kids, a record of when that crop was seeded, sprayed and harvested. All from that bar code on that can of corn,” said Leslie.
He pointed to a Maple Leaf pork program in which consumers in Taiwan can send a small meat sample from a supermarket to a laboratory to receive information on the meat’s DNA, trace it back to the sow that gave birth to the hog, letting consumers know which farm the meat came from, what the animals were fed and when they were killed.
But Leslie said grain has different challenges.
“If I want to send a Japanese maltster a 40,000 metric tonne shipload of barley, that’s a collection of 400 or 500 rail cars, a minimum of four or five delivery points if you load 100 car unit trains. That might be collected from as many as 500 farmers. How do you trace back one load that had deer feces in it?”
And there are other challenges.
“Once you put your sticker all over it, like this is Canadian Beef, if there’s a problem like BSE, the consumer may think Canadian Beef has BSE, or California Spinach may have E. coli. So it gives the consumer a chance to identify that product if you ever break that promise. They’ll punish you if you break your promise. So you have to be careful about the brand risk. The sword bites both ways,” he said.
Speaking at the Southern Alberta Conservation Association conference in Medicine Hat recently, Leslie pointed out successful examples where countries have branded their most famous products.
“You’ve probably had Italian pasta, even though the durum may have been grown in Western Canada. Maybe you’ve had Russian caviar … that’s come from Turkey, or maybe you’ve had Chilean wine,” he said.
“But the next challenge is who pays for all the extra work, tracing all these products back. Often a consumer will pay a small premium for a brand. But in our research, we’ve found the premium was at the retail level and very little if any got back to the producer.”
Premiums for branded products can also decline over time, as consumers become accustomed to a high quality product and competitors hit the store shelves driving down profit margins until the product hits a commodity price.
“So how are we going to get paid for all this extra work? Our studies have found that if you put the brand inside a supply chain or value chain, we’ve got to build a message around the protocol, the way we raise or produce it.”
If producers and processors can make the proper promise and follow the proper protocol, they’ll get customers to loyally buy their products. Leslie cited branding systems like Warburton bread in England, Nexera canola oil used by Taco Bell and Sapporo beer in Japan, which uses specific barley criteria, as products that are all produced through the use of production contracts, in which identity preserved programs are used.
“They’re part of a whole value chain, so if you capture a premium from a consumer, everyone along the way is delivering parts of that promise and they should all share in the profits, as well.”
Leslie said Canada is no longer the lowest cost producer of many grains. That means Canadians must produce it better and safer and brand it as such to achieve a higher price from the marketplace.
“IP programs that are voluntary are useful. If they become mandatory, we’ve seen that the only person that collects the premium is at the other end, closer to the retail. It won’t come back to the farm, even though you’re the person having to keep track.”
