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Perishable Pundit
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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur

Being Consumer-Focused

We’ve been writing a great deal lately about issues such as the use of cartoon characters to sell more product. And indeed, the use of effective marketing and promotional devices is crucial in selling effectively, yet, it can also be a distraction.

I’ve never met a marketing expert who didn’t make clear the preeminence of the product and the value proposition that is presented to the consumer.

Used properly, marketing is the way by which we demonstrate to the buyer the legitimate desirability of the proposition on order.

The fundamental problem with putting a cartoon character on a food is that it doesn’t fundamentally change anything about the offer. So Brussels sprouts or Limburger cheese won’t taste any differently just because we slap Scooby Doo on the package.

If you want an example of the way marketing should work, let me introduce you to Steve and Barry.

Some of you may remember Steve Shore, as he was the very first sales manager for the Perishable Pundit’s sister publication, PRODUCE BUSINESS when he was fresh out of college. Others will remember Barry Prevor, my brother, who worked along with me in my family’s long-established produce company headquartered on the Hunts Point Terminal Market.

While I fell to journalism, my brother rose to extraordinary heights as one of the master retailers of his day. When the history of retailing is written, I’m confident his name will be written about in the same chapter with names like Woolworth, Roebuck, Wanamaker, Macy and Walton.

If you want an example of what makes a marketer great, take a look at this two-minute video clip of an interview with New York Knicks’ point guard Stephon Marbury, which describes Steve & Barry’s recent introduction of the Starbury One line of "kicks and threads" — that is shoes and clothes if you are not that hip. Even better, look at the web site for the Starbury One line, available exclusively at Steve and Barry’s University Sportswear.

Stephon Marbury saw a need that kids should be able to buy clothes, not just any clothes, but clothes that are "fly" for reasonable prices.

A pair of Air Jordans from Nike retail for around $170 a pair. The Starbury One, not only stylish but of sufficient quality that Marbury will wear it on the court, is available exclusively at Steve and Barry’s for an incredible price of $14.98.

But it is more than just offering a good deal. It is really worth watching the various videos that are on the Starbury web site where Stephon Marbury explains that if you can keep the price reasonable, kids can be expected to earn money to buy their own clothes and that actions like this are what help kids grow up and be responsible.

Marbury grew up in a public housing project in the Coney Island section of Brooklyn. And although his point applies to everyone, he is thinking especially about the kind of kids he grew up with.

Of course, Marbury’s vision wouldn’t mean that much if it wasn’t executed. My brother started in the import department at my family’s company and grew to become perhaps the world’s leading authority on the intricacies of designing clothing to deliver everything the consumer wants while constructing the clothes in such a way that they can be imported economically.

Long before Steve and Barry met Stephon Marbury, they shared the vision of bringing high quality, stylish clothing to the people for affordable prices. What Marbury has added is street cred. Nobody would have believed that their basketball shoes were as good as ones costing ten times the price without Stephon Marbury.

There is a lot of marketing going on — with the web site, the video, a big press conference, Marbury doing appearances, etc. — lots of talent and expertise is going into this launch. But, at its core, the entire enterprise is geared around an idea, a value, a vision — that the world will be better if poor kids who worship basketball stars could reasonably be expected to buy the clothes they want.

At virtually every food industry conference, there are 20 speakers who all repeat, like some kind of mantra, that we have to be consumer-focused, we have to serve the consumer, on and on.

Yet in actual execution, I find that consumers are generally ignored or viewed in a very limiting way. I don’t think it has to be that way. How do we sell better, healthier, more life-enriching foods to the people of the world? How do we help people with diabetes, cancer, heart disease and other illnesses? How do we help people fuel themselves with high energy food so that they can live their lives to the fullest.

It is asking questions like this that really defines being consumer-focused.

We may only sell food, but these guys only sell sneakers.

IDDBA Offers Innovative Scholarship Program

Many times, employees at various organizations see top executives jetting off to conferences, trade shows and board meetings hosted by associations that the company belongs to. They know a lot of company money gets spent on these association activities but may not see any direct benefit for themselves in their companies’ participation in the organization.

Well the International Dairy Deli Bakery Association has an innovative program that addresses that point. It offers scholarships! Here is how the folks at IDDBA put it:

To support employees of IDDBA-member companies, IDDBA is offering academic scholarships. Awards from $250 to $1,000 per semester are available to high school seniors and current or returning college or vocational/technical school students.

There are three basic requirements:

  1. You have to work for an IDDBA-member company.
  2. Have an academic field in business, marketing or a food-related field.
  3. Maintain a 2.5 grade-point average

There are various caveats and whatnot, but it’s a pretty unique program, and it won’t take too much word of mouth for all the associates in an organization to think well of the company’s membership in the association.

You can click here to get more info on the program, apply on line or print a flyer to display in your store’s break room.

Milk And Other Matters

BodybyMilk.com just went live with a new web site geared toward teens. The launch is part of MilkPEP’s "Body by Milk" school program effort to welcome students back to school. The program is built around a health message:

The “Body by Milk” program shares a powerful health message that resonates with teens. Specifically the message is: “Studies suggest that drinking three glasses of lowfat or fat-free milk each day gives teen bodies the nutrients they need, like protein to build muscle. Replacing sugary soft drinks with milk, eating right and being active can help teens stay healthy, lean and looking their best.” This message, in its entirety, will be included on “Body by Milk” materials and featured prominently on the website.

The web site is super impressive, really demonstrating all the involvement devices that are crucial to great web sites today — especially those targeted for teens. Of course, they have a lot to work with since they are able to use many of the stars who participate in the "Got Milk" campaign.

You can upload your own picture and make an image of yourself with a milk moustache, get all kinds of information and, perhaps most compelling, can use bar codes or expiration dates from milk to "buy" stuff on the site.

The process is a little cumbersome for today’s digital generation: you have to save your bar codes or expiration dates and mail them via certified snail mail. Still, it is a start, will get some people involved and, who knows, may even motivate some milk purchases.

My first thought was to mention the site to Elizabeth Pivonka, President of the Produce For Better Health Foundation. As they roll out their new marketing, they will want to look at this web site for teens. In fact every company with a consumer web site that wants to attract teens should look at it.

Which leads to another thought: Right now we have the 5-a-Day program in produce, which will soon be renamed More Matters. The core dairy program is called Milk Matters, and based on the U.S. Dietary Guidelines, we will soon have a variety of other foods declaring that they, too, matter.

The problem, of course, is that people don’t eat commodities, they eat meals and snacks. Perhaps the health message would be more effective if these groups coordinated their efforts into a "Healthy Eating Matters" program.

Winning With Bread

Hurry, get your application right here. The deadline is August 31, 2006.

What are you signing up for?

The Coupe du Monde de la Boulangerie is an international artisan bread baking competition held every three years in Paris, France. Organized in 1992 by Christian Vabret, president of the Ecole Française de Boulangerie d’Aurillac, the Coupe du Monde is the world’s only competition where bakers who practice the craft of artisan baking can compete against the many old-world traditions of the various countries involved. The purpose of the competition is to gather artisan bakers from around the world to celebrate their profession, share knowledge of artisan baking techniques, and reinstate the value and restore the image of the artisan baking profession.

The Bread Bakers Guild of America sends a team and its mission:

  • To foster goodwill and promote education in the field of artisan baking throughout the world.
  • To demonstrate to the world that American professionals have evolved to a high degree of baking ability and have established a tradition based on ethnic diversification while remaining uniquely “American.”
  • To instill pride and to provide leadership and education to artisan bakers and bread lovers all over America.

And they seem to have succeeded since, despite the assumption that Europe has the advantage on artisanal product, the US has won!

What a terrific thing for a supermarket bakery to support its associates who want to try to make this team. What great publicity for it to be announced that an associate in your bakery department is at this level.

Advancing Perishable Logistics

For airports to remain competitive in today’s quality- and food-safety-oriented times, they have to offer dedicated perishable facilities. Houston is on track and has announced such a plan:

The new International Air CargoCentre II — an approximately 60,000 square foot perishable cargo handling facility — will be located on-airport in the IAH CargoCenter and offer direct ramp access for cargo airlines as well as importers and distributors of perishable goods. The International Air CargoCentre II will be designed for the import of perishable products, its future tenants will have the Federal Inspection Services Center — a one stop shop housing all federal inspection agencies — located next to the perishables facility.

Logistics has always been a challenge with perishables, and airports have often been enemies as much as friends. Commitments such as this show that it is starting to change.

Pundit’s Mailbag — Immigration

Some very incisive thoughts in response to our piece on immigration:

On immigration, much to the dismay of my shippers, I’ve long contended that the agricultural community is hooked on the drug of cheap labor. In the 60’s, people were mechanically harvesting certain vegetables for Campbell’s Soup. They had to quit doing it because labor was so cheap — they couldn’t beat the cheap labor rates — and the machine wasn’t efficient enough to overcome it. The point is, it was being contemplated 40 years ago, and it should have been an industry-wide effort ever since.

We haven’t worked on mechanization and automation in this industry because we have had no motivation to do so. Now, with fear of labor shortages, we see a frenetic pace of R&D on mechanical harvesters. I’m already hearing tales of at least four companies that will be mechanically harvesting lettuce in Yuma with less than 50% of the labor previously needed, and they also claim better quality! And this is only the start of an industry revolution.

And we haven’t attributed the correct cost to our cheap labor. Thirty percent of California prison inmates are in the country illegally. There are 20 murders per year in Salinas, a city of 150,000 people. The city spends almost $1 million on a gang task force every year. These are social costs that are borne by all the citizens of the city and state, and aren’t accounted for in the cost of the produce.

Where there’s a will, there is a way. We haven’t had the will because there was no need to abandon our reliance on cheap labor and find a better way of doing things.

This reader, who has extensive experience at the highest levels in our industry, makes the point that often gets lost in all the political battles, namely, that the industry of today is shaped based on the incentives in place today. Only a fool would extrapolate from the current situation and assume in some kind of linear fashion that if we were short 10% of the produce harvesting work force, then ultimately production must decline 10%.

Wages can go up, mechanization can change both the amount and the nature of the labor needed, consumer product preference can shift as higher wage rates lead to differential price changes on various products depending on the difficulty with growing, harvesting and packing.

In the piece we ran last week, I linked to an article by Professor Philip Martin from U.C. Davis, and I’m going link to it again for those who missed it. It is a fascinating piece that talks about what impact guest workers really have on an economy. His basic point is this:

Guest worker programs tend to increase legal and illegal immigration for two major reasons: distortion and dependence. Distortion refers to the fact that economies and labor markets are flexible: They adjust to the presence or absence of foreign workers. If foreign workers are readily available, employers can plant apple and orange trees in remote areas and assume that migrant workers will be available when needed for harvesting. Dependence refers to the fact that individuals, families, and communities abroad need earnings from foreign jobs to sustain themselves, so that a policy decision to stop guest worker recruitment can increase legal and illegal immigration.

In talking about the failure to pursue mechanization, our reader is basically referring to the distortion effect that Professor Martin refers to in his report.

In addition, our reader points to something economists call externalities. Basically this is a cost not paid by the parties in the transaction. Pollution is the classic example. In the absence of regulation or taxation, a seller of product could have a factory that bellows pollution in the air and neither the seller nor the buyer of the goods made in that factory has to suffer the effects of the damage caused by the pollution. That price — bad health, increased medical expenses, closed fisheries, etc. — is paid by an external party, typically the general public.

This reader is pointing out in his note that there are many costs to farm labor and not all of it is reflected in the price of the goods. If there are external costs to hiring the current classification of farm labor and we restrict that classification from entering, from a societal standpoint it means that there will be more resources available to deal with any problems that come about if labor does become constrained due to restrictions on immigration.

The reader’s two points together are astute and point to something problematic about both trade associations and governmental bodies: Both tend to be responsive to the industry only as it is today. The people who are going to work in factories that will produce automated harvesting equipment don’t know it yet, so they can’t lobby for their interests. The only voice that typically gets heard is from those who have something to lose from a change in the status quo.

We are glad to serve as a forum for such unheard voices here at the Pundit.

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