Creating a Geographically Linked Brand for High-Quality Beef: A Case Study
Worldwide, a segment of consumers can afford to pay substantial price premiums for very high quality agricultural products with attributes those consumers value. At the same time, many U.S. farmers are producing these high-quality products but are not using market mechanisms that allow them to take fullest advantage of price premiums. This paper describes a pilot program developed to commercialize an origin-based collective brand for very high quality beef. We hypothesize that, if successful, the program would create potential for cattle producers to take fuller advantage of price premiums often captured elsewhere in the marketing channel. Specifically, the pilot program analyzed two mechanisms for differentiating and marketing very high quality beef: a certification mark (a type of U.S. trademark that links products to their geographic origin) and a USDA Process Verification Program (a federal program that allows producers to provide documented assurances to their customers that a stated set of minimum production standards are met). This paper describes how we identified target markets, defined product specifications and determined potential supply, protected property rights using the U.S. trademark system, prepared documentation for a USDA process verification program, and attempted to commercialize Iowa-80 Beef. We also discuss the costs and feasibility of small firms or producer groups obtaining and maintaining a certification mark and a process verification program. Finally, we discuss the challenges and lessons learned from attempting to brand and commercialize very high quality beef.
Farmer-Owned Brands?
This report lays out the economic arguments in favor of the establishment of farmer-owned brands in Midwestern agriculture and presents four case studies based on successful efforts in this area in the European Union and the United States. The case studies involve Parma Ham, Brunello di Montalcino wine, Vidalia onions, and a third-party verification organization. The case studies show that these brands can be profitable for farmers, and emphasize the importance of restricting the supply of any successful brand. One of the case studies shows that this type of supply control can run afoul of antitrust regulations. [EconLit citations: Q130, Q180, R580.] i¾© 2004 Wiley Periodicals, Inc. Agribusiness 20: 269-285, 2004.
WHY CAN'T VIDALIA ONIONS BE GROWN IN IOWA? DEVELOPING A BRANDED AGRICULTURAL PRODUCT
Declining grain prices, cyclical livestock prices, changing consumer preferences, and intense international competition for agricultural commodity markets have created a need for alternative production and marketing strategies. Iowa producers striving to break away from commodity production and to develop more lucrative value-added and niche markets must figure out how to increase both the consumer appeal and economic value of their products. Even if mild, sweet spring onions were a major cash crop in Iowa, producers could not market them as Vidalia onions. A legislated geographical limitation on supply is part of the success of Vidalia onions as an internationally recognized, branded product that can command a price premium in supermarkets across the United States. Vidalia onions are an example of how responding to consumer demand with a succession of marketing, legislative, and research events has protected a niche market from becoming oversupplied by producers. And, by protecting the name, quality, and image of an agricultural product through state ownership of the trademark, higher values are realized throughout the marketing chain.