August, 1990

Fruits of Thought

Perils Of Produce Marketing

Marketing is an extremely complex subject, and the perils of produce marketing, in particular, are enough to keep anyone on their toes. Though marketing to consumers is glamorous, the successful large produce companies are equally aware of the need to use consumer advertising to get the trade behind the product.

An interesting example of building trade support can be seen in this issue of PRODUCE BUSINESS. Readers in Ohio, Indiana and Illinois are receiving a magazine with a back cover ad extolling the virtues of Chiquita kiwifruit. If you reside in another state, you’ll notice that the back cover ad is devoted to Chiquita bananas. The objective of this “split run,” which is part of a joint program with Chiquita and the New Zealand Fruit Co., is to test the power of brand marketing.

The Chiquita experiment is particularly interesting because it involves a semi-exotic. This raises the question of whether a well known brand name can give normally conservative consumers the confidence to purchase an unfamiliar product.

This experiment will likely tell us a lot about the power of promoting a given produce item strongly. Unfortunately, it is not likely to tell us very much about the power of branding. I am sure Chiquita will sell plenty of kiwifruit. Indeed, sales in the test market should exceed results in other states where the Chiquita program is not running.

But to those quick to point to this result as a triumph of branding, I urge caution. Most tests of branding are unable to distinguish between the branding pull on consumers and the branding push on retailers.

In other words, Chiquita is running kiwifruit ads on television, running in-store promotions and running back page ads in PRODUCE BUSINESS. The Chiquita people are pushing for shelf space and preferential positioning, and urging stores to go on special with the kiwi. The produce directors, buyers, merchandisers and store produce managers all know that a special program is involved.

All of this pushing gets retailers to display more, price more closely, advertise more frequently and pay more attention to the product. So if nothing else happens, the Chiquita kiwifruit campaign clearly demonstrates the concept of using consumer advertising to muster trade support. But is the program really successful? Or do the sponsors of the program – because they crave a favorable interpretation of the results – ignore possible distortions in the market? In fact, they really must examine whether any sales increase actually stems from:

  1. Increased in-store display space and prominence as well as store pricing and advertising.
  2. Increased consumer advertising.
  3. Impact of the major brand supporting the promotion.

The truth is they may never know. If the Chiquita name and organization can bring all these variables to bear in one direction, well, more power to them.

Meanwhile, it seems to me that this whole area of branding and consumer advertising continues to be misunderstood by the trade.

First of all, consumer advertising for produce is enormously inefficient. Very few produce items or brands have universal distribution. This drastically cuts down the possible positive effects from any consumer advertising. Produce brands simply don’t play in the same league as Coke and Pepsi when it comes to impact.

In addition, a major marketing function of branding is to reassure consumers about product quality. This works much less with produce than with most packaged goods.

To illustrate, imagine a row of canned green beans. The consumer cannot inspect the beans within the can. All that can be done is to rely on a given brand to provide the quality desired. Produce is not quite like this. The consumer can squeeze the tomatoes and note the bruises on the peaches. Many stores will even cut a sample for a consumer to taste upon request. The consumer simply doesn’t need to rely on a brand name as an assurance of quality.

In addition, produce is too similar to provide an opportunity for most brand preferences to develop. It is perfectly reasonable for people to say that they prefer to purchase only a particular brand of soup or salad dressing. In fact, people can, and regularly do, refuse to purchase substitute products if their favorite brands are not available. Shoppers regularly switch stores because one doesn’t carry a brand of choice.

Not so with produce. Retailers have found no indication that consumers have strong brand preferences. Indeed, if retailers felt that they were losing customers who were going elsewhere to buy alternative brands of produce, you can be sure we would see the development of produce departments carrying multiple brands of each item.

Of course, the entire produce purchasing system works against the development of brand loyalty. Produce mostly is bought at market prices on market terms. So the same store that has Sunkist oranges today, has Dole next week, Sun World the week after and Paramount the week after that.

Does this all mean that produce branding and consumer advertising of produce doesn’t work? Absolutely not. In produce, consumer advertising is used differently because the realities of the marketplace are different. The fact is stores only carry one brand of any produce item. As long as the quality is good and the brand is not repulsive to people, it’s the one people will buy.  pb