Brands more important than ever in modern agriculture
When we think about brands, we tend to think of major consumer brands such as Coca-Cola, Heinz or Kellogg’s. These are part of our everyday life, and have enabled the companies behind them to deal successfully with the major retailers – despite their increasing power, the diversity of their own brands, and the continuing pressure they put on margins. Today despite all the retailers’ efforts, these brands remain powerful, and consumers are prepared to pay a premium for branded goods, and for the difference in perceived quality.
An interesting additional dimension to the area of branding has come with the increasing power of the high tech brands such as Apple, and the online brands such as Google. Who would have thought that a computer manufacturer could come to dominate the distribution of music, and take a healthy share of the mobile phone market from a standing start? Or indeed that an online search engine could become a name on everyone’s lips, and have a brand that is worth billions of dollars?
In modern agricultural markets, product and corporate brands are, perhaps, more important than ever before. Agricultural distributors, agronomy companies, farmers’ co-operatives and vet groups are wielding more and more financial power. Some of the distributors are now bigger financially than the manufacturers whose products they sell.
To producers of consumer branded products, the agricultural market place would be a familiar landscape. The companies that sell the products are looking for better margins and exclusive deals, whether in terms of price discounts or tailored product offerings. At the same time they want to reserve the right to go elsewhere, and to sell own-label products that undermine the value of the brands.
It is a difficult situation, as manufacturers look to add value without damaging their brand equity. However, if equilibrium is to be maintained the manufacturers’ corporate and product brands must remain strong. One encouraging aspect of this is that farmers like tried and trusted products, and they tend to trust new technology only when it comes from a trusted source or is endorsed by their peers.