Branded Beef

[cakadu]

I heard the talk too, Randy, and I have to say that Cam spoke quite well. Unfortunately I didn't hear the retail folks in the morning.

Admittedly, I don't know a whole lot about Canada Gold and the concept sounds like it has merit. There are a couple of things that concerned me in Cam's talk - the first of which was his talking about selling a commodity. We will never get ahead trying to sell commodities. That is what we have been doing and it hasn't worked really well for us - at least up to this point.

I am still trying to figure out how this will actually get more money into producers pockets. (Believe me, I am asking these questions in order to gain a better understanding - both as a producer and as a customer that you want paying more for my beef.)

How will there be differentiation on the product so that when folks are out there marketing it, people will want to buy it? Are there going to be new strategies to market value-added products ie. providing what the customer wants versus just cut beef in a box?

If there is information being shared up and down the chain, then that would be great as that is one of the things that has been sorely lacking in the beef industry.

How is it actually different than what is being done now?

One of the greatest expenses are the processing costs - how are we going to alleviate those? In addition, where are we going to find the workers here in Alberta? It is a never ending struggle to get labour at the processing plants. If processing is increased, where is the additional labour going to come from?

How do you wish the government to be involved? How will things like food safety be handled? Branding products is a great way to go. Branding can be a double-edged sword though.

Thanks in advance for your responses and your thoughts.

Linda

[farmers_son]

Some information on Branding:

Approaches to Branding:
http://www.knowthis.com/tutorials/principles-of-marketing/managing-products/approaches-to-branding.htm

Enhancing Canadian Beef Industry
Value-Chain Alignment
http://www.canfax.ca/beef_supply/SchroederBIDFValueChain.pdf

Willingness to Pay for Branded Fresh Beef Products in Canada
http://www.canfax.ca/beef_supply/SchroederBIDFValueChain.pdf

http://brandcoolmarketing.com/brand-extension.html
The Most Common Brand Extension Problems
• Extending into a category in which the brand adds nothing but its identity (its products or services are not significantly different from current products or services in the category)
• Extending through opportunistic brand licensing without regard to impact upon the brand
• Extending into lower (and, sometimes higher) quality segments
• Not fully understanding brand benefit ownership, transfer or importance


Brand Failures: The Truth About the 100 Biggest Branding Mistakes of All Time
Author Matt Haig

Quote: Consumers make buying decisions based on the perception of the brand rather the reality of the product. While this means the brand can become more valuable then their physical assets, it also means the brand can loose its value overnight. After all, perception is a fragile thing. If the brand image becomes tarnished through a media scandal or controversial incident or even a rumour spread via the Internet then the [industry] as a whole can find itself in deep trouble. End of Quote.

I think at some point it is fair to question whether as an industry we want to throw all our resources into one brand, Canada Gold Beef, for example. I have pointed out in other threads that successful branding companies such as Colgate Palmolive and Proctor Gamble typically have a house of brands, if one fails other brands fill the gap.

I further question if the Canada Gold Beef brand offers any unique characteristics that cannot be easily duplicated by competitors. If the competitive advantage Canada Gold Beef seeks is derived from tens of millions in government funding I would point out that other governments can offer much more funding to their county’s competing brands. Government funding will not provide a sustainable competitive advantage.

I have pointed out in other threads that the hog industry has done pretty much what is contemplated by the Canada Gold Beef concept. And look at the financial mess they are in. Without evaluating the success of their quality and branding efforts it is abundantly clear that there are other factors in play relating to primary producer profitability that are significantly much more important to the producer’s bottom line than any advantages that might be realized from branding, if the branding effort even works and most do not.

I have yet to see how the Canada Gold Beef Brand has connected the dots from a successful branding effort to increased profitability at the producer level. I am still waiting for Canada Gold Beef to complete a marketing plan, I have not seen any understanding of the costs needed to sustain such an ambitious venture. Yes, they want government money, I have heard in excess of $80 million and the number keeps on growing but just how much will it take and how much benefit will the producers realize still needs to be understood. There may be better uses for that money.

Branding products can be a good thing. Rubbing alcohol is a good thing too, so is menthol, turpentine and baby oil. But just because you throw them all into a bottle and shake it up does not mean it will grow hair and reduce wrinkles. We seem to returning to the age of the snake oil salesman who ride into town, promise easy answers to our most troubling questions and then quickly ride off before they are held responsible for the exorbitant claims they made in order to get the towns people to buy in. If snake oil grew hair there would be no bald heads and if there was that much money in branding a fresh perishable beef product it would seem likely that we would see it being done already on a global scale. Beware the easy answer.

[per]

This discussion is about trying to see how the dots can be connected. We have read all about your sceptisim on previous threads. It is about as useful as blind optimism. I haven't heard anyone say that this concept would be easy or even quick. Many here have or use some form of branded product that does work but it is in every one's interest to revitalize the whole industry. You are obviously a bright mind f_s, help with the dot connecting instead of complaining of the difficulty of the enormous task ahead. We really are trying to improve our lot just as I believe you are. Thankfully we have seen the hog model and hopefully we can learn from their mistakes. Quite frankly I think our existing model will lead us down that path soon anyway.

[per]

Interesting take from from an R-Calf guru on Ranchers.net talking about the same subject from a US perspective.


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First of all, I think you have to identify your strengths, your weaknesses, your competition and their strenghths and weaknesses, and decide where you want to go. You then map out a strategy to get you from here to there.

Our strength is quality and technology. We are also smack dab in the most lucrative market in the world. A weakness is that we can't compete on price alone in the global marketplace. If somebody wants the most beef for their buck, our competition, South America, can bury us. Another weakness is our politicians that are still drinking the Free Trade Koolaid in spite of the damage those policies have done to our economy. We also need PSA enforced as the authors intended and an end to the consolidation of the packers.

Where do we want to go? I say, since we can't compete on price, we need to work the quality and service angle. We need to be the world's supplier of "the good stuff". If a customer wants their beef tested for BSE, BVD, TBS, LSD, Bird Flu and then packed in cotton candy with a yellow ribbon, we do it. We need to protect our home turf as we are already in the market everybody else in the world wants to be in. We need to give our customers as many options as possible.

To get there: Get COOL running and tune the checkoff into it so that only our product is being promoted and the custmers can find it. Reset our laws so that we are not accepting product that third world countrys will not. Drop this hypocritical, assinine "sound science" requirement on our product that was recently invented and selectively applied. Re-take marketing 101 and realize you need to give the customer what they want. Kick some ass in Washington and slap some sense into them so they realize where their bread is actually buttered.......

[rkaiser]

Don't you mean, beware of the balding snake oil salesman batman? ;-)

I think that some of you are making too much out of this thing. Canada Gold is a plan to brand Canadian Beef and have that beef owned in the box by producers rather than multinational companies. If you want to still call it commodity product, that is up to you, but what we are suggesting is simply getting back to defining the country of origin and using all the tools that "Canada" has available to keep it distinct and change the ownership of the end product. When Canada Gold moves to the family of more distinctive products like Canada Gold with no HGP's or Canada Gold Grass fed, I would hope that a few of you direct marketers will be there working along side or within the program.

Call it naive or call it far from perfect, or simply run it down as farmers_son and most of the rest of the ABP/CCA thumb suckers plan to do, or make some positive suggestions like I asked. Heck even the CCA has come out with a kinda parallel protocol program called CBA without the marketing plan or ownership of beef. Did you not have part in that farmers_son or did they leave you out of that issue and put you in charge of the foot rot department?

Beware of thumb suckers......

[rkaiser]

I got to apologize for calling you a thumb sucker this morning farmer_son.

Took the snake oil salesman comment a bit too personally and reacted rather than going for a walk in the trees before my reply. Another good thing about these forum meeting places as long as those of us with a bit extra passion remember to use the walk in the trees.

I am actually proud to be a salesman farmers_son. For Christs sake man Christ was a salesman -- how bad can it really be?

Even though it is good to hear opposing views, there are limits for all of us. ABP/CCA has shown us all how it limits opposition and emotional reaction will be my personal challenge when it comes to posts like the one old farmers_son put up.

Canada Gold is about responsibility folks. Rather than continue to blame the packers, blame Rcalf, blame government, blame the economy, or blame those pesky Beef Initiative Group loud mouths for our woes, we are saying that we take responsibility and manifest our own destiny.

Of course this industry is full of folks who have given up or have no social interest in bettering the overall industry, however most, if not all of the folks on this site have a social interest, but simply have different views on how to change things.

Canada Gold can and will make a difference for the industry.
It will make a bigger and better difference if we can get all of these bright minds (including yours farmers_son) on a similar page.

Even though I have used the word social a couple of times on this post, Canada Gold is going to be a for profit corporation with thousands of shareholders who will buy in at a reasonable initial value. The company will show profit over time and those who buy in will be rewarded. BUT the rest of the industry will also be rewarded by the efforts of this company.

When Canada Gold starts to move product off of this continent into high value markets in Asia, the E.U., and yes Christoph the Untied Arab Emirates, our farm gate and beef prices will rise in turn. I for one, will be glad to be a beef owner at that time rather than sharing those increased profits with the multinational packers in the way that grassfarmer fittingly described the current situation.

The consumer needs to be educated grasssfarmer, and maybe not just about food cost but about farmers share.

OR we could simply save the education costs and become price setters ourselves through a Canad Gold process.

[grassfarmer]

"Untied Arab Emirates" indeed - is that a case of "who let the arabs out?" LOL

I asked a while back who owns the cattle/beef once they leave the feedlot? Is the ownership retained by the feedlot,owned by Canada Gold or owned by the packer?

[rkaiser]

Canada Gold Beef (inc. ltd., corp., or maybe alliance) will own the beef.

[farmers_son]

First, while I did infer that the Canada Gold Beef concept was snake oil I was not thinking of anyone as a snake oil salesman. However when the cattle industry is considering solutions for the problem of chronic low producer returns we do need to keep our ideas strongly rooted in reality.

See: Magical Thinking
http://en.wikipedia.org/wiki/Magical_thinking

We need to be careful that we, in our sincere desire to improve our lot, do not fall victim to magical thinking. I respectfully submit that it is magical thinking to believe that an organization such as Canada Gold Beef can form a relationship with a global beef processor to process live cattle and then that organization can sell that same beef globally in direct competition and in the same established distribution channels as the global beef processor and realize a profit by doing so. I see no marketing plan, I see no numbers, no understanding of costs or benefits. I see no unique competitive advantage that cannot easily be duplicated by other competitors or even the cooperating packing plant. I do see the beef industry as a mature industry with entrenched competitors and it is unlikely that there are dramatic marketing opportunities that have not been fully exploited.

Branding does offer opportunities but not without cost and risk and no one should assume all branding efforts are successful, they are not. Government dollars can mitigate that associated cost but I think we need to consider government money as being like rocket fuel. It can get an idea off of the ground fast but if the idea does not have wings to fly it will just crash and burn.

Bottom line we do operate in a marketplace and right now it sucks to be us. There have always been times of profitability and loss in the cattle industry. I do think we will see stronger live cattle prices in the near future and that is where I make my money from, live cattle. I would love to move up the value chain to a more stable wholesale branded beef market but I do not see one example of where that has been successfully accomplished in a major way without owning at least the processing capacity. Typically these branding efforts are highly vertically integrated and when you consider that even the mighty Tyson is having their profitability threatened by strong grain prices it is clear that even vertical integration will not guarantee sufficient profit for a branded product to offset the larger economic factors that we are all experiencing.

[rkaiser]

Right on farmers_son. I feel that you are suggesting what I would like to see happen with Canada Gold in the very near future. Ownership of processing capacity.

You must have looked at the USPB program by now. http://www.uspremiumbeef.com/

We have all been reading up on the success of USPB up to and including their current plans to sell their National Beef plants and become shareholders in JBS Swift. It seem that this very wise group of producers sees the future better than you or I farmers_son and may even have concerns over the packer ownership issues that are moving ahead quicker in the USA compared to Canada. Might be one of those things that I have to actaully look back and thank ABP/CCA for holding out on when we do own the plants, the cattle and the beef.

Had we gotten this Canada Gold thing off the ground a bit sooner, we could have had the Ranchers Beef Plant for a song, but still have potential to purchase or at least work with the Acheson, Ranchers Own Plant, the Natural Valley Plant and any other plants that see merit in the Canada Gold concept.

As for your concerns about snake oil or dreams farmers_son, remember that "Problems can not be solved at the same level of awareness that created them".

We have a problem that needs to be corrected. Did you not see the enthusiasm in the room at the Alberta Cattle Industry conference in February when Canada Gold was announced? Canada Gold will happen and could use your help as well as your criticism. How do you think we could approach the plant ownership thing farmers_son?

[loric]

Randy

As the ABP staff person who works with the website, I can personally assure you I never shot down your idea about a forum on the ABP website. In fact, I can recall a conversation with someone where I said it was an idea that we are considering but that I had used up my website budget for the year just getting the basics up and running.

We have a budget in place for the 2008/09 year and I'll be working with our web designer on updates. What you have to remember is that just because you build something - does not mean people will come. There are a million forums out there on the World Wide Web and people who post on the forums they are familiar with - enjoy the conversation with the other people they have come to know on them.

The idea of a forum will be raised at some stage this spring. It has been in our minds since we began to design the new site, but there were more important pages to pay for than a forum for the 2007/08 year. You have a forum that you post on right now - enjoy it and use it to your advantage - and I'll keep you informed on the progress of the current ABP website as changes and additions are made according to what I can afford with my budget.

[rkaiser]

Thanks Lori,

I hope that you are enjoying agriville as well. You can't even imagine the folks who read this stuff. Still think it would be a good idea for ABP some day and hope that you stick it out long enough to make it happen. I aways said ABP has good staff........