Not so long ago I attended a technical workshop organized by the Spanish federation of agricultural cooperatives in Granada city (Spain). The journey was about the Spanish fruit and vegetables export diversification featured by high profile institutional and professional speakers.

One of the most interesting moments of the day came at the end with an open discussion between speakers and attendees about the trend among large retailers of using fruit and vegetables as a key differential element of their stores.

This strategy of differentiation based on fruit and vegetables is nothing new. The supermarket chains have long tried to apply it (with different outcomes) while unable to differentiate themselves by selling branded products (if you all sell Coca-Cola, how can you be different?).

bananas

In some European markets this strategy of differentiation has led supermarkets to focus on the core benefits of produce (quality, safety, health, etc.) instead of other possible benefits related to product/market (assortment, packaging, opportunity, life styles, convenience, etc.).

And all this has led to a “hell of certifications” (up to 25 different certifications bodies regarding quality, safety, health, etc.) applicable to all suppliers (and farmers) if they are to sell their products.

So in order to make it possible, the producers are adopting the latest and more restrictive standard while supermarket chains compete each year to make their own standards even more restrictive (widely exceeding the legal requirements established by each European country and by the EU).

It is true that the situation has reached a point of “unjust” that turns its back on the scientific evidence and leads to a restrictive regulatory complexity which generates meaningful increases of production costs (that are not rewarded) and make the complete fulfillment of the protocols difficult to achieve (face very high uncertainty thresholds) by the producers.

The debate ended with the politically correct arguments in our sector; that is: the retailers impose us conditions while the political power does not protect us.

And at this point we are left in the debate (this time again). But I think that we should be “looking beyond”, to understand that things happen not only by “the evil” means of powerful distribution or because our rulers “abandon” the sinking boat. We need to “look beyond”, if we want to make the correct diagnosis to solve the problem.

And this is precisely a debate in which a good analysis is needed because it is a merely marketing issue.

When a retailer establish its own certification (e.g.: TESCO-Nurture Choice) or own Protocol (e.g.: use of pesticides in LIDL Protocol) what it is really trying is to get a “consumer Positioning”.

The retailer tries to create an image in the mind of consumers, enabling it to further develop its sales. In short, it defines a value proposition that is attractive to consumers.

But before, it should be good to remember that a good Positioning needs to be: Relevant, Supported and Differentiated.

And according to the above, we should acknowledge that (believe it or not) retailers do not take all these decisions to “ruin our miserable producers’ existence” on the contrary it has an overwhelming logic for the success of their businesses based on the above features:

  • The safety and healthiness of fruit and vegetables is an extremely important aspect for European consumers. Therefore, it is not surprising that supermarkets compete to secure this Positioning factor.
  • The promise of the value to be delivered to consumers should be supported by real facts. And so all should be ‘true’. And the retailers make supplier to systematically comply through: inspections, external certifications and multiple checks and controls.
  • Since not all producers will be able comply with the most demanding protocols, only the most challenging retailer wins the pursued effective differentiation. And thus it feeds the race for differentiation.

The playing field therefore does not need to be levelled by lobbying rules to be imposed to the distribution, or by the sector confrontation with the distribution. The playing field for our products is clearly set on the minds of the consumers.

And we cannot complain much if from our side (production) many emitted signals put in doubt the safety and healthiness of conventional products. The introduction of organic products and its promotion (prioritized by authorities) put a reasonable doubt in consumers’ perception.

But this debate is older, even, than marketing. It is a classic debate that goes on since the time of the Roman Empire. The eternal dilemma between Auctoritas and Potestas.

We have lost the moral authority (Auctoritas) to convince consumers and now we claim the power (Potestas) to impose our point of view. But the world has changed, and the power is useless if you don’t exert it with moral authority.

Most consumers now trust more an influential blogger (see my article about Vani Hari) that public or scientific authorities. Consumers rather currently listen to initiatives of corporate control deployed by Greenpeace (not only in Europe. See link here regarding the initiative in China), Friends of the Earth or Behind the brands – OXFAM, than to producers or distributors statements.

Therefore, if we want to influence and change the “Positioning Map” it is necessary that, instead of appealing to the authorities (that govern us) or distributors (that buy from us), we rely directly on consumers with emotion and reason (see post of an American farmer) to regain the Auctoritas we deserve.

But to do this well, we are going to need a good communication and marketing budget…