Commentary: Extending the holiday spirit

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’Tis that time of year when it’s better to give than to receive.

In that spirit, here is a gift suggestion that wise people in the industry ought to consider giving to some obvious recipients: it’s called generosity. Or perhaps tolerance. Or maybe a better term would be acceptance.

In the end what serves industry best is to share what might be called the gift of appreciation for those people and trends that often seem antagonistic—unless you can view them in the holiday spirit.

The best example is the emergence of “alternative agriculture,” the production and marketing of free-range, grassfed, organically grown, heritage-bred meat and poultry products. Typically, most industry participants either sneer at the marketing and/or health claims made by alternative growers and processors or else condemn them because the product lines are pricier than conventional products—by a lot.

Of course, these products cost more, as do hand-crafted, labor-intensive products in every consumer category. Do homemade preserves (jams, jellies) cost more than the mass-marketed, brand-name varieties stocked on the supermarket shelves? Do boutique wines and craft beers cost more than the market leaders in those categories? Or a box of hand-dipped, gourmet chocolates, versus a bag of Hershey’s Kisses?

Quality considerations aside, limited production, labor-intensive products cost more, and the customers who prefer them are willing to pay more. Is that a bad thing for the name-brand manufacturers against whom the specialty marketers compete? Of course not.

The bottom line is that gourmet-type products, or those foods making ethical or environmental claims—fair-trade, shade-grown coffee comes to mind—help expand the category by bringing in new customers and new revenue.

A cost-benefit calculus

More importantly, the success of any specialty segment provides the market leaders with an opportunity to cash in on the same demographic that the alternative marketers are targeting. A great example of that is the sub-brands launched by several major processing companies that feature antibiotic-free, cage-free, “naturally” grown animal foods—typically premium-priced—that can be sold to people willing and able to pay more for the benefits they deem important.

Equally important, a price differential between alternative and conventional foods isn’t a bad thing, it’s a genuine opportunity. Nothing allows consumers to distinguish—and decide—the cost-benefit equation more clearly than the price tag.

Take cars. Do you expect to pay more for a Mercedes CL Coupe than a Hyundai Accent? Better believe it. Does anyone object to the principle of the variable pricing between those automobiles? No, because it’s understood that there is an inherent difference in value there, and that the car-buying public is likewise segmented according to financial capability.

It’s no different, or at least it shouldn’t be any different, with animal foods. The marketing of alternative products—no matter how negative their market positioning often seems to be—is a blessing, not a burden, for mainstream producers and processors. There are always going to be slices of the marketplace where different appeals are going to resonate.

Not everyone wants the cheapest price per pound, although there certainly are plenty of people who do.

Likewise, not everyone’s willing to fork over big bucks for a portion of meat, poultry or dairy products that would normally cost half as much if it came packaged under a more familiar, name-brand label.

Point is, there’s not only room for both kinds of consumers, it’s a terrific opportunity for product line extension and differentiation and a chance to appeal to the so-called “fringe” customer who might not be a regular consumer of a company’s products.

I don’t agree with or approve of the negative advertising that too often typifies organically grown, humanely raised, ecologically advantaged food products, but I view them as a gift to those producers, ranchers, feeders, packers and processors who comprise the mainstream, name-brand products and distribution channels that dominate the category.

Even the most efficiently produced, most aggressively priced, most widely marketed product line isn’t for everyone.

Not only is there room for alternatives, it’s a gift that keeps on giving—if the tolerance and generosity that makes the holiday season special can extend to the marketplace, as well.

On that note, Happy Holidays to one and all.

The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.


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