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Perishable Pundit
P.O. Box 810425
Boca Raton FL 33481

Ph: 561-994-1118
Fax: 561-994-1610


email:
info@PerishablePundit.com

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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



New Jersey Prepares To Define Local,
But Do We Need To Penalize Retailers?
How The Initiative Will Hurt Jersey Farmers And Consumers
Vic Savanello Speaks Out

As national country of origin labeling was about to become effective, back in 2003, Pundit sister publication PRODUCE BUSINESS ran a cover story titled Country-of-Origin-Labeling: Nothing Cool About It. COOL implementation was postponed, but in the end, farming organizations, thinking that clear labeling would dissuade consumers from buying foreign produce, succeeded in getting the law implemented. The impact on sales of US produce…so small it can't be quantified.

Now New Jersey seems intent on defining “locally grown” and then imposing fines if that definition is not adhered to.

Vic Savanello, Director of Produce & Floral for Allegiance Retail Services and President of the Eastern Produce Council, sees trouble down the road if the state starts issuing fines. 

We asked Vic to explain the situation, state his case and detail what he thinks needs to be done:

The Potential Demise of the
Jersey Fresh Marketing Program

Every night when I whisper goodnight to my daughter, I say to her, “Who loves you more than I do?” Her response back to me is always the same, “Nobody!” The same could be said for my relationship with the New Jersey Department of Agriculture and the Jersey Fresh marketing program.

I have been a huge supporter, often times an advocate for the program. I have been interviewed more times than I can count, a few times in this Pundit and in the sister publication, PRODUCE BUSINESS magazine, about the power of Jersey Fresh, New Jersey home-grown produce and the power of Locally Grown with the consumer. I have a highly developed Locally Grown program at my own company, one which received recognition on the cover of a national industry periodical just last year.  

It should come as no surprise to anyone reading this article that Locally Grown is the hottest thing in the supermarket industry since sliced bread. Nothing has more consumer acceptance or appeal than the identification as a locally grown product. I’ve witnessed firsthand, as consumer survey groups have stated, Locally Grown is probably the top decisive factor when making a purchase decision. I’ve even witnessed a consumer group state that Locally Grown outweighs their concern for food safety. Yes, food safety — concerning but true!

With all that being said, what is the issue? The State Board of Agriculture in the state of New Jersey, a group of eight farmer-members who “are elected by delegates from the agricultural community,” has determined that rules need to be introduced to define and classify the terms Jersey Fresh as well as Locally Grown in our state. Because there is no national definition of what “Locally Grown” means, the State Board of Agriculture has decided that they must now define it as farm products “grown or produced in New Jersey or are clearly identified with the locality and state of origin when that state of origin is not New Jersey.”

Along with that definition will follow a list of penalties that the Board will enforce when the definition they create is not adhered to. The fines being proposed could become quite excessive to a major retailer with multiple locations throughout our state. In fact, these fines would be so excessive that I have to consider discontinuing a Jersey Fresh as well as a Locally Grown program in the future.

And I am not alone, I have discussed this topic in length with most of my New Jersey retail counterparts in the produce retail industry. We are all in agreement that this could be the demise of potentially the most powerful marketing tool we’ve ever had in our tool box. We are all working through our own legal and labor relations departments to make our state representatives aware of our position on this topic.

This is currently, by definition, only a proposal at this time. The process allows for one of these proposals to sit for comment for at least 30 days. During that time, concerned individuals can write their comments and concerns to Alfred Murray at the Department of New Jersey Agriculture, or email them to: proposedrulesMarkets@ag.state.nj.us. In the end, after discussion with the Secretary of Agriculture and his staff, the Governor will decide whether to enact the rule or not.

As an industry we should be working together to increase produce consumption, not looking to devise rules and fines that control or monopolize sourcing options, regardless of price, supply or best quality. While I do love my Jersey Fresh produce, and my Jersey farmers, Mother Nature sometimes makes a neighboring state’s product more appealing and a better business decision for me and my customers.

I’m not ever looking to deceive my customers when making one of these decisions. I’m looking to supply them with the best product available at the best price possible, and I always strive to supply them with what they desire to satisfy their consumer needs. What consumers are we protecting if I have to procure an inferior product to resell to my customers, just because 4 weeks ago we thought Jersey-sourced products would be the right decision?

This is the produce business here, folks. We aren’t selling widgets. Rain, heat, wind, poor grower forecasting, infestation and human error can all change our ability to source product from a specific growing area. These same issues can affect our ability to accurately forecast and identify the very specific growing region of the products we have in every one of our stores.

Jersey Fresh and Locally Grown are two completely different topics, and they need to be treated as such. This is one of the biggest areas where this proposal completely misses the mark and causes the deep concern that it has. I do not support a rule with fines attached, nor does any of the supermarket retail community.

How can the State Board of Agriculture define what local is to a chain store that potentially can operate a store as far north as High Point and as far south as Cape May? Wouldn’t product being sourced out of the state of New York be more ”local” to the High Point store than product out of Vineland, NJ? If this is the circumstance, then who is deceiving whom?  

In my opinion, this effort to define “Locally Grown” as being grown in the state of New Jersey is not well thought out and actually appears to be somewhat self-serving to members of the Board of Agriculture, one of whom, at least, also operates a small farmstand store that competes with retailers like myself.

I believe Locally Grown probably does need to be defined, or at least treated with a little bit more integrity than we have seen in the past. I would welcome the State issuing a set of recommendations on this topic, recommendations developed through working with and alongside growers as well as retailers from our great state. If the Department of Agriculture or the Governor would like volunteers to work on this initiative, I would put my money where my mouth is and volunteer myself.

I urge everyone potentially affected by this proposal to send their comments before the July 3rd, 2015, deadline, to the address and people listed below. Find your voice and inspire others to find theirs. Our silence will be interpreted as our acceptance; don’t allow that to happen. We cannot allow a handful of people sitting on the New Jersey Board of Agriculture, some with conflicting interests, to dictate regulations with such devastating potential results without making an effort to prevent it!

Victor Savanello
Director of Produce & Floral
Allegiance Retail Services
President, Eastern Produce Council

PS I urge all to send thoughtful comments to:

Alfred Murray, Director
Division of Marketing and Development
New Jersey Department of Agriculture
PO Box 330
Trenton, NJ 08625-0330

Or email to: 

proposedrulesMarkets@ag.state.nj.us

******

New Jersey is not the first state to attempt to deal with this issue. We wrote a piece titled Extortion By Government when Vermont made a similar move.  But that was, in the end, compromised.

The problem here is that this particular definition — grown in-state — is just a political definition. It is ideal for politicians who are elected in only one state to be able to say they are doing something for that state’s farmers.

But they are not. As day follows night, New York and Pennsylvania will follow this act with acts of their own in order to protect markets for their farmers.

When all is said and done, farmers will actually be poorer. Why? A large, diverse market is the farmer’s friend. If the three or four big chains in one state are unwilling to pay the price or too demanding in other ways, the farmer’s great protection is that he can take his produce from New Jersey and sell it in another state.

But if all the states pass laws — as they will — giving home state farmers advantages in marketing — like the exclusive ability to call their product locally grown without additional labeling — then markets will constrain and it will be more difficult for farmers to sell out of state.

That is not a win for New Jersey farmers.

It is also not a win for New Jersey consumers. First, it adds another complication to procurement beyond just getting consumers the best produce at the best price. Second, retailers don’t actually pay any fines. Fines become a cost of doing business and have to get passed on in some way. Perhaps growers will be paid less, or maybe consumers will pay more, or workers receive less. But the fines will, in fact, be paid for.

We read things like this and see it as a solution in search of a problem. Some things are not defined exactly because there are many meanings. Local, for example, can mean a tribal or political sense — in which case New Jersey or a county in New Jersey could be the “right” definition. On the other hand, those very concerned about reducing food miles or their carbon footprint will probably want a geographic definition — within 50 miles or whatnot. Both definitions are equally correct; they just view the issue from different perspectives.

What terrible wrong is being done that requires the state to intervene is simply not clear.




What The FTC Doesn’t Know May Hurt Us…
Sysco/US Foods Merger Is Pro-Consumer
Judge Has Opportunity To Let A Thousand Distributors Bloom

Federal court proceedings in which the Federal Trade Commission (FTC) is trying to persuade Judge Amit Mehta to issue a preliminary injunction to prevent the proposed merger of Sysco and U.S. Foods are going to be extended.

The issue?

What is the proper definition of the “market” served by Sysco and US Foods:

Judge Mehta interrupted the lawyers on several occasions, with questions and observations about the case. The judge noted the FTC’s case against the merger is built in part on distinguishing between different modes of distribution for food supplies. And he wondered how he was supposed to factor in wholesale cash-and-carry stores, such as Restaurant Depot, where restaurants and other businesses can go and buy the goods at competitive prices.

“Really that seems to me where the rubber meets the road,” he said.

This doesn’t surprise us. In fact, over a year ago, we wrote a piece titled, With FTC Now Reviewing Sysco/US Foods Merger, The Definition Of ‘Market' Becomes Crucial. In the piece we wrote:

The key question is likely to be how the FTC defines “the market.” When the government tried to block the merger of Whole Foods and Wild Oats, which we wrote about in a piece titled FTC May Block Whole Foods From Buying Wild Oats, it did so because it defined a market of natural food chains as distinct from food retailers.

We thought this was a mistake; consumers could get natural foods at Safeway, Kroger, Costco, Wal-Mart and Amazon.com, to name just a few. There was no basis for saying that just because there was consolidation between these two chains, consumers would be subject to monopoly pricing. Still the government saw things differently and fought the merger.

If the market is consolidation in food distribution, then the merger should sail through. After all, from the Hunts Point Market to self-distribution to a panoply of regional players, there are no shortages of ways to get food from place to place. The combined Sysco/US Foods sales would be about $65 billion a year — a big company indeed, but a fraction of the multi-trillion dollar food industry — and these distributors sell lots of non-food items, such as plates, napkins, forks, etc., as well. Even for the formal foodservice distributor sector, which has sales in excess of $200 billion, that is hardly a monopoly.  

However, if you were to look only at broadline distributors that are able to offer a multi-city network of their own facilities – the market shrinks fast. Then some government analyst could well see “the market” as small and becoming basically monopolized by a merger. The big challenge for this interpretation, though, is that only large operators with multiple locations in multiple cities care whether a company can offer national distribution.

So you wind up with a logic that says we have to prevent a merger so that Darden, Hilton and McDonald’s won’t be abused. Yet these companies have the heft to set up alternative distribution channels if Sysco tries to raise prices unduly. These big customers have not raised public objections to the merger, making one think that they see themselves as possible beneficiaries of greater efficiency by the new Sysco, rather than potential victims of price gouging.

In the end we wrote:

….the whole issue will come down to the FTC’s definition of the “relevant market,” and there the Administration’s general suspicion of business could throw things in favor of a narrow definition of the market, which could lead to another Wild Oats/Whole Foods-type battle.

*****

We have that now, and the government’s position borders on the bizarre.

First, the purpose of antitrust law is to benefit consumers. The distribution business depends heavily on efficiency, and numerous competitors working the same routes will not likely result in lower costs. Robert Bork, the most influential antitrust lawyer of the 20th century, wrote a famous sentence: “Congress enacted the Sherman act as a ‘consumer welfare prescription’.”

The Supreme Court was to adopt that sentence in 1979. That is the prescribed goal of antitrust law today. Robert Bork’s big insight was that the old antitrust regime, which focused on stopping companies from getting big, was protecting inefficient businesses and thus raising costs for consumers.

Second, this is a business with low barriers to entry. Let us imagine that, in fact, the new Sysco had such power that it could raise rates excessively. That would last about 30 minutes. The customers wouldn’t pay the price and would secure supplies from specialist vendors such as produce distributors and bring things in from nearby cities. To whatever minor extent Sysco was able to keep rates high, the high rates would simply function as an umbrella, protecting new entrants in the market. Of course, there are complications but, at base, you need a warehouse and a truck to do this business.

Third, this unique market the FTC is trying to define of those in need of national distributors is, by definition, composed of large national companies that can well fend for themselves. The key problem with the FTC is that it is incapable of imagining a world post-merger. We would think that there is a good investment opportunity in regional distributors because most large buyers will want to maintain connections with secondary distributors to keep prices down and to have a backup if something goes wrong in their primary vendor relationship.

This means a merger will let a thousand distributors bloom. And will lead to more competition, not less.

But the FTC just can’t see it — why should they? They are lawyers, not food experts.  Hopefully the judge will see more broadly.




Branding And In-Store Marketing:
Perfect Together...
St. Joseph’s Superstar
Professor John Stanton To Present At
London Produce Show And Conference 

When we first launched The New York Produce Show and Conference, we unveiled a sneak preview of an important presentation given by Professor John Stanton of St. Joseph’s University:

Research To Be Unveiled At The New York Produce Show And Conference Shows ‘Local’ Preference Versus Organic

We didn’t even have to wait before the CEO of an organization that happens to have been one of the Charter Exhibitors at The New York Produce Show and Conference and The London Produce Show and Conference weighed in:

With great excitement and anticipation, I await The New York Produce Show and Conference and the presentation on Local Preference Versus Organic, by Dr. Stanton.

John Stanton, undoubtedly in my book, is one of the best, if not the best authority on consumer behavior when it comes to purchasing foods and produce.

He continues to “Delight” his audiences with thought-provoking data, information and advice on how to reach consumers in a way that will influence their purchase decisions. Time after time, Dr. Stanton has identified consumer traits that if properly applied in marketing, will end in success!

His presence, along with the other outstanding presenters at the New York Produce Show, is certainly worth the registration fee alone, while the excitement of the show will be a bonus!

— Jim Allen
President
New York Apple Association, Inc.
Fishers, New York

Well the distinguished Mr. Allen is returning to London this year, and doubtless will be thrilled to know that we have persuaded Dr. Stanton to join the faculty at The London Produce Show and Conference as well. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:

Dr. John Stanton
Professor and Chairman
Food Marketing Department
Saint Joseph’s University
Philadelphia, Pennsylvania

Q: We’re honored you’ll be presenting at this year’s London Produce Show. London attendees should know they’re in for a memorable, thought-provoking talk, in line with those you’ve done at The New York Produce Show since its launch in 2010. Just ask a varied fan base of industry executives who have found your research intriguing, with some calling your insights no less than “brilliant.” And at the same time, acknowledging, you’re not one to pull any punches in laying out the reality. From your studies quantifying the value to consumers of local versus organic to your collaborative research addressing obstacles in marketing Vitamin D enhanced mushrooms.

You’ve spoken about branding of produce as the next step to greater profits. Will that be a theme in your presentation?

A: It’s close. I have a slight variation on that. Branding is of the same ilk, but with a different emphasis. What I want to talk about in London is about fresh produce people using in-store media. All the major branded companies do that. If you go into a store, you’ll see all kinds of media everywhere. But for the most part, produce people will put something like a sign next to the asparagus that says, asparagus, at so much per pound, as if someone shopping didn’t know what that was.

We did research using Vitamin D-enhanced mushrooms to determine what really would be the best combination of store media. We looked at six different types of store media; the coupon machine, floor graphics, shopping carts, pop outs, simple signage and more complex signage. So simple signage would simply say “Mushrooms loaded with Vitamin D,” or complex signage would say, “Mushrooms loaded with Vitamin D to build strong bones.” Things like that.

We actually did experiments where we had people look at the mushroom section, with different combinations of media. And we were able to determine the best combination of these media to maximize the sales response.

Q: Your consumer marketing research utilizes sophisticated statistical models and analyses, adjusting for multiple variables, and countering unscientific biases and wishful thinking, whittling down to the core what industry executives need to know and act on, to drive their businesses. What does this research reveal?

A: The presentation will have two parts. The first part – it’s really important to start acting as a brand and telling people about your products and making some very positive statements about these things. The second part — if I want to make a statement, what’s the best way for me to do it?

Q: As an overview question in the context of your study, isn’t branding in the produce department challenging? Industry executives grapple with perishability, unpredictable effects of Mother Nature, variances with seasonality, and other cold chain logistics issues, as well as the commodity nature of many products, etc. How can branding overcome those issues? If a consumer has certain expectations with a brand, what if the brand can’t deliver on those expectations?

A: My response to your first point is, things are tough all over. Do you think Campbell Soup doesn’t have trouble finding the quality of the tomatoes they want? Everyone has to deal with problems.

Q: That’s true. It’s just that often when you have a processed item, like Heinz ketchup, isn’t it easier to have a consistent and distinguishable taste and flavor profile?

A: If you talked to Campbell’s, they’d argue just the opposite. They’d say, wouldn’t it be nice if we didn’t have to take 10 different things and mix them together? If you’re selling bananas, you’re selling bananas. We can always find excuses. I like the dairy industry. They’ve had 25 years of decline in sales and they just keep blaming it on everyone else.

Q: Why do you think they’ve had 25 years of decline in sales?

A: Because they put mustaches on people. Can you tell me how putting a mustache on someone in any way encourages you or leads you to believe in buying milk? It’s actually a disgrace.

Q: I guess humor can only get you so far, especially if the joke gets old...

A: I want to make something clear. I don’t think it’s easy. You have hurdles to overcome. That’s why people get paid hundreds of thousands of dollars. It’s to overcome hurdles, not to say, it’s a good year. It’s in a bad year that they earn their money.  

The one thing I’ve always said: There is no such thing as commodity products, only commodity marketers.

Q: That’s a memorable quote.

A: Commodity marketers are those who failed to see the qualities in their products. There are some examples of effective branding in the produce industry. More and more people are doing it, but in general we don’t see it. I don’t mean so much the typical concept of branding; I mean just tell people about how good your product is.

Q: In the case of Vitamin D-enhanced mushrooms, you have a unique characteristic to exploit, as opposed to more generic choices…

A: When Hass avocados are fresh in the market, have some signage that says, three weeks only. It could be a motivation that it’s limited; it could be that it’s local. There are all sorts of things we could say about our products, but we don’t say anything, except, asparagus.

Q: Could you walk us through your research and share some insights?

A: We took those six major in-store media and created a lot of signage and examples of each one of those. We had consumers, about 1,000 of them, view pictures with different combinations of those media. We actually used video, which was kind of interesting. From a distance you could see a sign, but then it would zero in exactly on the words on the sign, and then zero back again. It would focus on the floor graphic so you could see the words, etc.

We used a reasonably sophisticated technique, called conjoint analysis. From that analysis, we could estimate how much each one of those media increased the likelihood to buy.

Q: What are the parameters of your research? Did you focus solely on Vitamin D mushrooms and a particular shopper base?

A: Yes. You can have theories, but at some point you eventually want to do research on a single product. Consumers we targeted were the primary food shoppers in their families and had bought mushrooms in the last three months. They had to be mushroom users to begin with.

Q: Could you give us a sneak preview of what you learned?

A: I don’t want to give away the bottom line. I can say three of the media had a significant impact on forecasted mushroom sales. We actually forecasted sales with and without the media.

The bottom line message is not that everyone should go out and use these three exact media things, rather to demonstrate that if you do some of this in-store marketing, it can in fact have a positive effect. For apples, it may be a different combination of these things. The fact is, we showed it worked on at least one fresh produce product.

Q: What happens if the produce company determines the best solution to market its product is having floor signage and other in-store media, but the retailer is not game? After all, the retailer can’t let every produce company do all those media combinations, because the produce department would end up being a cluttered mess.

A: That’s correct, and true for any product category. A retailer could take this concept to increase sales of fresh produce. It’s not a question of branding it, as much as letting people know how good the product is, and drawing attention to the product. If it’s a retailer like Wegmans, it may have a branding effect, but it may not.

Q: What is your assessment of marketing strategies that have worked in the produce department and others that haven’t?

A: For the most part, the produce industry has not kept pace with the other categories of the store, in terms of using signage and in-store marketing to really share the benefits of its products, whether it’s from the producer or from the retailer.

Q: What do you think of these national produce campaigns to boost consumption?

A: Oh, another one. It’s a question of execution. First, if you create a concept, and the retailers and distributors don’t fall in love with it, it really doesn’t matter. PMA is a really good organization, but investing $1 million is a drop in the bucket, even $10 million won’t matter if the concept isn’t right. If you have a generic campaign where you bring in celebrities, what are you going to do, put mustaches on them like they did for milk?

I’m a marketer. I’m focused on getting the consumer to stand in front of broccoli and buy it because it’s really delicious or really local… anything you can say to persuade people, I think I’ll try it. It’s when they’re standing there in the store, in front of the shelf. That’s where you have to hammer people, when they’re shopping, not at 9:00 at night when a celebrity comes on the air and says broccoli is good for you.

Q: Maybe the message sinks in subliminally?

A: It’s at point of sale when you have to grab consumers. That’s why the consumer products industry in general spends over half their marketing dollars on in-store and trade-marketing. Things like displays, or it could be an ad in the circular for the retailer, but it’s the actions in the store. We’re not selling automobiles. We’re not selling something that someone’s going to spend three or four weeks thinking about, looking at, and researching. You’re going to walk in the store, stand in front of the sign and you’re going to buy it or not.

Q: So there’s a spontaneous element. When you go into the produce department, maybe you’ll have some things on your shopping list, but you’ll veer from that list to pick up what appears freshest, in season, looks beautiful or is a good value, etc. Aren’t many of those characteristics quite apparent with minimal signage?

A: But what if there’s a wonderful sign that says why you should buy it, that tells you the benefits of the product, there’s a floor graphic to draw you to the product… If it’s fresh or local you put that sign up. You use the signage right on the shelf that’s going to have the biggest impact on people. It’s what everyone does except the produce industry.

Marketing budgets are not an excuse. A paper sign is not that expensive.

Q: In the case of Vitamin D-enhanced mushrooms, the category didn’t take off at retail. Why? Is it your conclusion it wasn’t marketed properly?

A: That is correct. The mushroom industry did not embrace the concept of Vitamin D mushrooms; and in my opinion the industry has let that opportunity pass, as consumer interest in Vitamin D has slowly waned.

Q: Vitamin D was a hot topic for some time.

A: Part of the issue is, because it’s the antithesis of their particular behavior, it really took the industry a long time to absorb the fact that they needed to promote it, and by the time they did, and some of the companies started to promote it, the spotlight moved. A couple of companies were behind it, but you really needed the whole industry to get behind it.

Q: Monterey Mushrooms and Dole were taking a lead role in research and development and in trying to build enthusiasm at retail…but in the end efforts seemed to fizzle. In Perishable Pundit interviews with company executives, one of the challenges they expressed was in convincing retailers the additional cost for the value-added mushrooms would pay off…

A: Yes. I remember. But what did they expect? It takes a while. Retailers are used to putting a product on sale at a reduced price and selling a lot of product. That’s not marketing. Marketing is getting people to believe this is the product they need and want. That doesn’t happen by just putting two for one and a logo. It takes a little building. They’re not used to that. They’ll say, OK, we’re going to run a promotion. How did sales do last week?

It is a challenge getting retailers on board. I remember when bagged salads came out, and the retailers thought that was the worst idea they ever heard. No one would spend three times more for the same salad, when they could buy a head of lettuce. And we know what’s happened there.

Look what happened to the cheese people. They started selling shredded and grated cheese, and retailers said that’s ridiculous; consumers prefer to grate the cheese themselves. Now it’s hard to find a block of cheese. The mushroom people quit too soon.

Q: That’s a serious point to reflect on…

A: You have to believe in your idea.

Q: And it helps if you can find an innovative retailer to come on board with you.

A: Absolutely. The one thing we know about food retailers; they all want to be first at being second. Really getting one of the big chains to buy in is a major step forward.

Q: To conclude, what are the key points you’ll want attendees to absorb during your presentation?

A: The produce industry, which is distributors and retailers, must make use of the modern technology of in-store marketing. To really be successful in the future, they have to tell people why their product is great, what are the benefits, and that it’s delicious.

Where you see this a lot is at independent grocers. There’s a sign, the freshest asparagus anywhere you can find. I always say, use some adjectives.

Q: Does it relate to what you put on the package as well? Lisa Cork, a dynamic speaker at both the London Produce Show and New York Produce Show, has put forth powerful evidence to that point. It parallels many of the issues you’ve raised.

A: It could relate to the package, but most produce is not packaged. But if it was, that would be important as well. If you asked people in the industry, they’d say they want to put their brand on the packaging. But they’re talking about their logo. I always say to them, it’s not a brand. A brand has to do what the consumer thinks about you, it’s not about you aggrandizing yourself with a picture.

But that’s a whole different issue. I’ve done a lot of packaging research, but I don’t want to get into the packaging part of it for this presentation. But what we say in our packaging research is exactly what Lisa Cork says. It’s of the same ilk. You’re trying to give people reasons to buy. It’s not that complicated. But this industry really hasn’t done it. There are riches and niches, and you need to focus on who you’re trying to sell to. It’s absolutely about good marketing.

********

Professor’s Stanton research and the thoughts that have grown out of it are intriguing and the ideas can impact the industry at all levels.

The first big message is that these things can and should be researched and tested. Does having movie stars, recording artists or athletes say that produce is great lead people to consume more and buy more? And, if so, which one of these categories is better? To what extent? And do these categories have impact on different customer segments? These things can all be researched. If we had to give one critique of virtually every produce promotion program proposed over the last 30 years, it would be that the proposed efforts were not researched and tested.

Second, all marketing is not created equal. So much marketing is, in effect, designed to win awards for the agency. So often, organizations and analysts, in defense of promotions, will point to things that have little to do with increases in consumption. So this presentation out of Berkeley highlights benefits of the “got milk?” campaign:

• The “Got Milk?” campaign did it with humor and suddenly it became cool to drink milk.

• Focused on increasing awareness of milk’s use in losing weight and staying healthy.

• Not only that, the campaign became immensely popular with consumers and “Got Milk? ” became a phrase used in common conversation.

• Items with the “got milk? ” logo printed on them became popular: kitchen items (baby bibs, aprons, and dish towels)

• Outdoor ads along high-traffic commuter routes, television spots, billboards, bus stops, decals on grocery store floors, etc.

• In 1998 the slogan “Got Milk? ” campaign expanded to include the faces, but not the names, of celebrities. By adding the celebrity cachet, awareness of drinking milk has increased 90%. Today the slogan is an international icon and the phrase has been parodied more than any other ad slogan.

But despite this upbeat tone, the graphs speak for themselves:

Professor Stanton’s haunting question — “Can you tell me how putting a mustache on someone in anyway encourages you or leads you to believe in buying milk?” — reminds us that just being cool, increasing “buzz,” even selling towels — may not be enough.

We have heard some of this related to the new FNV program — the program Professor Stanton references that PMA is donating a million dollars to help jump start, which seems to be built around a slogan: “Prepare To be Marketed To.” Is that really something that consumers want and will make them eat more produce?

Third, Professor Stanton points out that what is effective in terms of marketing is product-specific. A lot of the marketing on produce may be more effective if done in store. If you are buying a new car, one might research quite a bit, but the bananas either look good or they don’t.

Fourth, produce vendors at all levels need to move fast to stay on trend. Vitamin D was hot; now it is less so. Though vitamin D-enhanced mushrooms are inherently a good thing, their day may come again – thus showing that one also needs a willingness to sustain an effort.

Fifth, don’t assume that everything is too expensive. In fact, a lot of marketing is quite inexpensive — a sign — yet what that sign says can make a big difference.

We suspect that this message is especially useful in the private-label-dominated UK.

As we mentioned just the other day, one of the problems with private label is that it reduces the amount of money available for marketing and R&D. But the stores then “own” the brand, and they have to invest to grow it. Fortunately they also own the in-house space, so retailers are ideally positioned to use the tools Professor Stanton is going to talk about to boost produce sales.

Professor Stanton is knowledgeable and insightful. Having him join the faculty of The London Produce Show and Conference is an honor and a treat.

Please join us in London and engage with the good professor as he makes his case.

You can learn more about The London Produce Show and Conference right here.

This is a small brochure we created that showcased the event from last year.

Please register at this link.

And, remember, we have a great “better-half” program; you can learn about it here.

You get the most out of the event by staying onsite at the headquarters hotel. It maximizes networking and thus the value you take out of participating. Get discounted rooms at the headquarters hotel right here.

We still have a few booths left if you want to participate as an exhibitor, so please let us know here.

And sponsorship opportunities allow you to position your company as a leader; find out about opportunities right here.

We look forward to seeing you at The London Produce Show and Conference!




Pundit's Mailbag —
On Bruce Peterson And The Importance Of Being Mentored
But Is Mentoring A Dangerous Activity These Days?

Our piece,  Bruce Peterson, Founder Of Wal-Mart Produce Program, Will Urge Industry To Rage Against Mediocrity, Value Experience Over Education, And Merchandise To Wow The Consumer At The London Produce Show And Conference, continues to bring in letters.

We dealt with some in a Mailbag titled, Pundit’s Mailbag: Bruce Peterson Hits 'Nail On The Head' When It Comes To Retailers Hiring Credentials Over Experience, and followed up with a piece titled, Pundit Mailbag — Praising A Forum Where The Industry Can Make Itself Better, but Bruce had an impact on many and a number of personal salutes came in as well, such as this letter:

I had the privilege of working for Bruce at Wal-Mart for a number of years. I saw him recently and realized I never told him how much I appreciated his leadership, so I did. I think I said those years were some of the best years I had at Wal-Mart. 

I learned a ton from him traveling and looking at my business through his eyes. And working for Bruce, it was my business. He applauded my success and rightfully criticized mistakes, all for my development.  

Of course, he deflected the compliment and put it back on the people with whom he worked. Just like Bruce. Reading the article today was both a step back in time and a look forward for me. 

Thanks so much for doing it.

John Butler
Premier Concepts LLC
Bentonville, Arkansas

PS. A BIG congratulations to you and your team on the award for your Lifetime Achievement in the industry from the Eastern Produce Council, the Jesse A. Neal Award for best editorial, commentary and opinion, and on the first place for Best International Event for The London Produce Show and Conference! 

A Triple Crown! Clearly well deserved! 

The letter reminds us of the other side of Bruce’s argument: If one is going to value experience, that experience will vary enormously depending on the quality and willingness of mentors to teach and share.

Bruce has always been focused on this. The very first time we were swimming in Bruce’s pool in Bentonville, he asked the question: Who were the people you learned the most from in your life?

Our sense is that the willingness of people to mentor has declined. Part of it is the mixture of sexes in the workforce, combined with increased fear of litigation.

The National Journal did a study and ran an article titled Why some Male members of Congress won’t be alone with female Staffers:

In an anonymous survey of female staffers conducted by National Journal in order to gather information on the difficulties they face in a male-dominated industry, several female aides reported that they have been barred from staffing their male bosses at evening events, driving alone with their congressman or senator, or even sitting down one-on-one in his office for fear that others would get the wrong impression.

It is not only male/female, it is not even only at work. We know one young man who wouldn’t coach children’s sports because someone might make a false allegation against him.

There is just a general sense today that allegations can be made and that companies will take them seriously and that one is better off maintaining distance.

This is a big loss for young people who don’t gain the knowledge that is often communicated through informal interaction.

It is also a loss for older people who can’t play the important mentoring role they could derive great satisfaction from.

We were lucky and had a highly intelligent and deeply knowledgeable father. For those without that good fortune, it is a tougher world than it used to be.

Of course, John Butler and the Pundit were also fortunate enough to spend time with Bruce Peterson.

Of course you can too! He is heading off to The London Produce Show and Conference — come and let him share some wisdom with you as he has with John and the Pundit.

You can learn more about the London Produce Show and Conference right here.

This is a small brochure we created that showcased the event from last year.

Please register at this link.

And, remember, we have a great “better-half” program; you can learn about it here.

You get the most out of the event by staying onsite at the headquarters hotel. It maximizes networking and thus the value you take out of participating. Get discounted rooms at the headquarters hotel right here.

We still have a few booths left if you want to participate as an exhibitor, so please let us know here.

And sponsorship opportunities allow you to position your company as a leader; find out about opportunities right here.




Pundit’s Mailbag –
Ayn Rand And The Price Of Water
Is It 'Get Wealthy Or Get Thirsty'?
Or Can Markets Function And The Poor Still Be Fed?

We received a letter from Jim Wells, truffle expert extraordinaire and, for a long time, owner of Oregon Wild Edibles. He has contributed to the Pundit before:

Pundit Mailbag: Cause of E. coli

Jim read our piece on the water situation — Water: What Does It Mean To Have A Shortage Of Something That Sells For Less Than A Penny A Gallon? Can We Secure Farmer’s Rights To Ground And River Water? Why Raising Price Is Better Than Restricting Usage — and had this to say:

Water: If water costs more, the wealthier will get a greater percentage of it. In other words, get wealthy or get thirsty. How classically twisted Randian can one get?

—Jim Wells

We will leave aside the critique of Ayn Rand for another day and simply point out that she has sold over 26 million books and that in a Library of Congress survey, her magnum opus, Atlas Shrugged, was ranked as the most influential book in respondents' lives after the Bible and that her vision of man has inspired many:

“In creating her novels, Rand sought to make real her exalted view of man and of life — “like a beacon,” she wrote, “raised over the dark crossroads of the world, saying ‘This is possible.’” For millions of readers, the experience of entering Rand's universe proves unforgettable.”

For now, though, we will stick to water and simply point out that keeping the price on something low both discourages new sources of supply and conservation efforts.

This is why we don’t put price controls on food, but instead give out food stamps.

If we want to help poor people get food, water, clothing, shelter, etc., putting price controls will result in artificial shortages, so the thing to do is let prices rise to market levels, then give out aid sufficient to ensure the poor can live at the standard we consider acceptable.

But artificially depressing prices distorts markets in ways not helpful to anyone, including the poor.

Many thanks to Jim Wells for weighing in on this important question.

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