Shanghai Husi Food Co. Ltd., a Chinese meat supplier owned by U.S.-based OSI Group, shut down its on factory on July 20, 2014, after an undercover investigation revealed workers were allegedly supplying its customers – including fast-food giants McDonald’s Corp., KFC and Burger King – with purportedly expired meat.
The international scandal exposed a growing issue about safety in China’s $1-trillion food processing industry. A subsequent poll by Beijing research company Horizon Research and Horizonkey (subsidiaries of Horizon Research Consultancy Group) revealed 80 per cent of its 3,166 respondents from 20 Chinese cities were dissatisfied with the country’s food safety.
As a result, China’s middle and upper classes are opting to pay a premium for what they consider to be safer foreign food imports from countries such as Australia. The National Farmers’ Federation there has put in motion a national strategy to produce a unified agricultural export brand.
Australia is doing it
Australia introduced the “True Aussie” brand into its Asian exports of red meat in the spring of 2014 with great success. Earlier this year other agricultural sectors came forward saying they wanted to reap the same marketing benefits by attaching the True Aussie brand to meat and vegetable exports. The strategy is still in the development stages, but is expected to be in full effect within a year to capitalize on the upswing in Chinese demand – China is Australia’s top purchaser of agricultural products.
But while Canadian branding and agricultural experts believe an increased adoption of a national branding strategy for Canadian food exports could generate better returns for producers, there are significant challenges that would have to be overcome to make it work.
“There are perceptions about Canada when it comes to food: It’s safe, reliable, high quality,” says J.P. Gervais, chief agricultural economist at Farm Credit Canada (FCC). According to the FCC’s report, Canadian Agriculture and Agri-Food in the Global Economy 2013-2014, China is Canada’s second-largest export market for agriculture products.
Massive middle-class growth
“Every year the equivalent of a Canadian population [30 million] joins the middle class in China and when you look at … how much consumers on average in China would be spending on food, they are purchasing as much as 40 cents per additional dollar of income,” Mr. Gervais says. According to consulting firm McKinsey & Co., foreign-branded food and beverages are favoured by 34 per cent of China’s upper-middle-class urbanites.
The federal government has implemented Canada Brand/La marque Canada, which has a maple leaf graphic and the tagline “Quality is in our nature” to help agribusinesses get recognition in global markets. But it is not a requirement for all growers and producers and it is unclear how many food exporters use it instead of their own in-house marketing.
So should more Canadian food exporters adopt a national branding strategy so they get noticed on China’s grocery shelves?
“If you ask me it is a good idea,” Mr. Gervais says. “I totally get some businesses may want to brand themselves differently than having to be under an umbrella, but I really do see the value because there is a lot of capital in that Canada brand right now … especially with the growth that’s coming in the marketplace over the next 10 years from Asia-Pacific.”
A big challenge
The challenge of developing a popular national brand strategy lies in the fact that Canada’s food products are diverse – everything from apples, to meat to dairy and grain. On top of that, the country’s growers range in size from small family-run growers to massive agribusinesses.
“What we would have to do is create an umbrella strategy that is flexible enough that it can be used regardless of the organization that is part of it,” says John Miziolek, president and co-founder of Oakville, Ont.-based Reset Branding, “because there’s no way you could create one singular brand and hope that it would fit everybody’s needs.”
The solution could be creating smaller brands for each of those diverse products and then to develop an umbrella strategy to encompass the smaller classes, he explains. But he emphasizes that making it mandatory would be the strategy’s death knell.
“Just from a branding and marketing perspective that’s a horrible way to start a brand,” says Mr. Miziolek, “forcing people to comply with rules that they’re not very excited about.”
With the caveat that it would have to be managed well to actually succeed, he says increased recognition in the global food market could lead to more stable and solid revenue for the companies that enroll in a national branding program.
“If done correctly, and all of the organizations and producers were managed properly, we could establish ourselves in the global market place as a high-quality exporter of various types of food products,” says Mr. Miziolek.
A 'lofty goal'
“But,” he adds, “it’s a pretty lofty goal, to be honest.”
For Gurprit Kindra, professor of marketing at the University of Ottawa’s Telfer School of Management, the issue with marketing food exports signals a much larger Canadian branding problem.
“Our products are great, but our brand is fuzzy and unclear,” says Dr. Kindra, citing the example of the maple leaf – a common symbol in most Canadian marketing efforts – having countless stylized versions across both private and public enterprises.
He suggests that to be attractive in up-and-coming markets such as China’s middle class, Canada should focus on having one singular brand for every item produced in Canada, across all businesses and government departments. New Zealand has “100 per cent pure,” while the Indians market themselves worldwide as “Incredible India” – “and this could be done in Canada, but right now the message just gets lost,” Dr. Kindra says.
But to work, he says the initial efforts of a national brand would have to come straight from the top – the Prime Minister’s Office – and it would take years to really grab hold.
“A unified brand strategy is not an easy thing to do,” says Dr. Kindra, “but with concerted effort it could happen.”
Editor’s note: Shanghai Husi Food Co. Ltd. shut down its factory after an undercover investigation revealed workers were allegedly supplying its customers with purportedly expired meat. A previous version of the story stated the factory was supplying its customers with expired meat. This is the corrected version.Report Typo/Error
Follow us on Twitter: