Allan Barber traces the challenges, costs, and disappointments of generic country of origin marketing for red meats, and warns that brand building for low margin product is hard requiring long-term patience

The Certified Angus Beef programme has been running for 47 years since the first sale of product under the CAB brand in 1978. Three years later the American Angus Association voted to wind the programme up, if it hadn’t turned a profit within 12 months. Despite not being profitable after a year, it survived by one vote and today 559,000 tonnes of product are sold in the USA and 54 other countries and six million carcases were CAB certified as meeting the 10 specifications for quality.

The programme is 100% producer owned and governed and 100% packer or exporter funded which is hugely significant in the building of the brand.

These basic facts underline why the Angus breed is such a powerful brand today and at the same time how difficult, expensive and time consuming creating a brand is. Contrast this with the New Zealand experience – on the one hand the Lamb Rosette, highly recognisable as the New Zealand lamb brand, and entirely funded by producer levies, was dropped after many years, because the investment was no longer sustainable, at least without matching exporter contributions.

On the other hand, Taste Pure Nature was introduced to the Californian market in 2020, again funded by producers but with some support from processors. Four years later responsibility for governance and investment in the programme was transferred to the MIA with continued assistance from BLNZ, and the short California programme was replaced by China, more specifically Shanghai. Much too short a time to build a brand in any market.

It remains to be seen how willing the exporters will be to support the programme out of their own marketing budgets, especially when not all of them are prepared to commit. I have already expressed my scepticism about the success of this approach which provoked an angry response from the MIA.

This whole issue raises the old question of whose responsibility it is to market red meat and how to cover the cost. BLNZ has clearly signalled its wish not to continue spending levy payers’ money on generic country of origin promotion, while the exporters are not keen on promotion, unless it is tied directly to their brand.

The main problem is our size and budget relative to the amount we export. Critics point to meat exporters’ shortsighted approach to brand building, but thin margins mean there is very little flexibility in their marketing budget.

My long-held view on the appropriate division of responsibility is that the producers’ role is to invest in the New Zealand red meat brand and the exporters are responsible for their own brands, ensuring their brand activity links closely to any country of origin message. However, this will only have hope of success if all exporters buy into the overall red meat brand and are prepared to commit a percentage of revenue promoting their brands using the nationally agreed message on all promotional material.      

The CAB programme has succeeded immensely after slow beginnings because of the determination of all the participants to support it. It is neither an origin nor an exporter brand, but a breed specific campaign to address the declining Angus cattle population in the United States in the 1970s and the deteriorating quality of American beef which had affected consumer satisfaction. It is a success that is highly unlikely ever to be repeated, but the independence of the governance structure provides a suitable investment model.

Silver Fern Farms has committed itself wholeheartedly to building its own brand and, at its recent AGM, stated its value added strategy is ahead of its plans, claiming 5% of its commodity product has moved to the next level of value in a year, enhancing the value of the whole carcase.

Somewhat ironically, this statement came hard on the heels of the decision to take 30 cents per kilo out of the schedule because, in CEO Dan Boulton’s words, the sudden 10% lift in the exchange rate had taken a quarter of the margin. This only emphasises the narrow gap between direct cost and market price which is required to fund administration, finance, marketing, and profits for capital expenditure and dividends.

On the matter of generic country of origin campaigns, I have had contact from an American importer who has expressed frustration with the way TPN was rolled out, saying BLNZ refused to listen to importers that know their market. He insists generic campaigns are “vapid and meaningless to consumers” and money would be better spent on directly promoting individual exporter brands in cooperation with their distributors.

This importer maintains there are only two kinds of marketing programmes: brand development campaigns for which a huge budget is required and campaigns designed to sell product. Because the former is too expensive and takes long-term investment, the affordable alternative is targeted direct marketing programmes that promote sales of specific products and brands. Each market demands different strategies.

While a generic tagline for all meat exports would make sense, it seems logical to leave the branded product marketing to the individual companies.  

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