Quality is in the bag, but what’s on the outside of that bag? As private labelling continues to take over the marketplace, can regions retain their potato-growing identities?
Consumers are looking to satisfy many needs as they shop. Affordability has become top-of-mind when it comes to produce, but it’s certainly not the only factor. Confidence in the product, connection to and pride in the brand, visual appeal of the packaging, and more factor into the purchase decision. A key part of meeting all of these needs is a product’s brand, which serves as a foundational piece in the marketing plan for all businesses and organizations and a key connection point to consumers.
Until quite recently, the vast majority of fresh market potatoes were sold in five and 10 pound, mostly regionally branded bags. In recent years, however, private label products have become more popular as wholesalers and retailers use their purchasing power to consolidate product from multiple sources. Though they promote these private label brands as economical options for consumers, the reality is that private labelling first and foremost delivers additional dollars to corporate pockets by building loyalty to their larger brand. Unfortunately for potato producers, that type of promotion brand often elbows out opportunity to promote a grower or regional brand identity. As such, privately labelled potatoes become a store brand without a clear path back to origin, eliminating that point of contact with consumers for Canadian growers.
A decade ago, PEI Potato Board’s general manager Greg Donald spent significant time in the UK and other parts of Europe while he completed the Nuffield Scholar program. He noticed that while here at home only maybe 20 or 30 per cent of sales were private label, two-thirds or more of the potatoes sold in the UK were private label rather than regionally branded. He wondered at the time how the UK potato industry could retain a regional identity.
“Here we are 10 years later, and we’re probably closer to 70 or 75 per cent private label,” he says. “That makes it very difficult to retain your identity. Our strength has always been our brand and our name. With all the changes in our population and also with private labeling, it’s getting harder and harder to differentiate oneself in the marketplace.”
“This has been an ongoing concern for our organization,” agrees PEI Potato Board’s marketing specialist, Mark Phillips. That said, he acknowledges that while private labelling may present difficulties in branding, it does create other opportunities.
“In some cases, we can fill gaps in the marketplace when opportunities arise in regions we would not normally ship to. If those retailers specifically branded based on region, they might not take our potatoes or might need new cost-prohibitive packaging to accommodate them,” he explains. “You lose the opportunity to have a branded product but gain access to consumers who could be far outside of your traditional reach.”
The Power of Partnering
Part of the answer may be in looking beyond ‘either – or’. While private labels aren’t going anywhere anytime soon, some might be willing to partner where a regional label adds value.
“We are trying to work with retailers for a hybrid, featuring our brand or at least geographic area alongside their private label brands,” Phillips says.
“We have a couple cobranding projects we’ll hopefully soon be able to announce,” Donald adds. “[For the co-branding projects], we get our logo on some of the private label bags. We have two projects that are with two different grocery chains that we’re hopeful might materialize.”
Beyond Packaging
A brand or product’s ability to tell its story used to be limited to the information contained on the outside of a bag or package. Today, new media opportunities allow consumers to access, at the snap of a QR code or the click of a social media link, a product’s whole supply chain right back to the producer, and information from production to cooking recommendations to nutritional details, all without information overload on the packaging. This digital access point also offers other benefits for marketers and consumers. Easy to update and share, the information is broadly accessible to a larger audience. The very successful marketing campaigns launched by organizations like PEI Potatoes, BC Fresh, and Peak of the Market show consumers are hungry for information from sources well beyond the bag.
“Consumers want to make informed choices that help them eat healthy and purchase wisely. They want to feel good about their decisions and know where their food is coming from,” Phillips says.
The Regional/Local Brand Isn’t Dead
While major labels are taking over much of the marketplace, there remain opportunities for regionalized branding. Many farms who are part of local cooperatives are using social media for marketing their produce and connecting with consumers at events where people can experience their production first-hand. Open farm days and other farm-based access points can give consumers a touch point to what they see in the store or online.
“With product moving in so many directions, you need to look at your marketing approach carefully,” says Phillips, “Awareness and consumer demand are good, but it is not a linear path to execution.”
For those who do sell under a larger private label brand, know your voice and identity still matter. A label is only one avenue to the customer’s heart. Using the channels where consumers are seeking information before shopping is a way potato growers can be part of sharing their production story, helping educate consumers, bolster a regional and brand identity, and give consumers what they want.
There is also room for differentiation via helping consumers make choices about what table stock potatoes to buy based on their needs (i.e.: providing guidance on what to buy based on how they are going to use them). And share your and your region’s production story openly, honestly and with passion — consumers are further from the farm than ever but want to feel connection to their food. Consumers ultimately speak with their dollars and are influenced by those they feel they can trust, whether that is a celebrity chef, a social media savvy farmer, or a local sharing recipes online.
It’s Complicated
The complex retail marketplace doesn’t look like it will simplify any time soon. There are a lot of moving parts from farm to retailer.
At least as challenging, the politics of branding are only increasing. The reluctance of many to even talk about private labels and differentiation shows just how complicated and, in many cases, emotional this issue has become. As multiple sources told Spud Smart, this is a complicated issue with more downside than up to those who rock the boat. For exactly that reason, organizations have to be strategic, even in how they publicly talk about the challenge of branding.
The biggest challenge with differentiation may have more to do with what’s in the bag than what’s on it. Unlike a product like apples, which is well-differentiated by variety, potatoes are largely sold by colour and size. That’s a problem when it comes to brand differentiation, since it’s more difficult to celebrate your brand’s specific attributes when a customer sees the product primarily in terms of ‘red’, ‘yellow’, ‘white’ or ‘russet’.
What’s Ahead?
Differentiation of one’s region or production in a private label world is complicated but not impossible. More than ever, consumers are looking for information. Brand loyalty may come second to feeding a family on a budget, but consumers want to feel a connection to where their food comes from. For many, that means choosing Canadian when they don’t have the option to show regional loyalty, though even private labels may see a premium from branding regionally and promoting locally sourced product.
The movement towards more online shopping, the desire to know more about products and their origins, and the ease of access to information through digital outreach do make the future for innovation in differentiation brighter. Consumers already have more ways to access key information about products and producers. Expect that to continue in new and creative ways.
