The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios de Rabobank, México
12 - 16 de Noviembre de 2007

The World

Using health for positioning: We have seen that over time more and more companies are using healthy products as a strategic tool. Now we are seeing that companies are going beyond “just products" and into "concepts" as a tool to position themselves to consumers. Chipotle Mexican Grill, for example, has announced their intention to go totally rBGH free. This, they say will make them the first national chain to entirely eliminate rBGH "from items on their menu." This is part of what they call their "Food with Integrity" mission, whose objective is "to change the way the world thinks about and eats fast food" or at least how they think about Chiplotel Mexican Grill. Their purpose may be noble, but there is, certainly, a business objective. According to a survey "81 percent of the respondents would prefer to buy dairy products derived from cows that do not receive synthetic hormones". That doesn’t mean, Of course consumers don't want to pay more, but for Chipotle this rBGH free concept positions them as a leader and not a follower. The concept strategy isn't just for large national chains. In the U.S. state of Florida the Pollo Tropical chain is saying that their "entire menu is now trans-fat free." Other chains have said they would or have changed their cooking oil, but not entirely eliminated trans-fat from all their food. Here this trans-fat free strategic concept positions them as a leader, on par with the major players and not a follower.

Buying a chain and then franchising it: Saying that that is what they do best, IHOP which just acquired Applebee’s, the fast casual restaurant in the bar-and-grill category, is building the turnaround strategy for Applebee’s “selling company stores to franchisees”. For the management team this is really nothing new: that is what they did when they took control of IHOP. Having doubled the stock’s value it seems to have been a successful strategy. By moving away from the day-to-day running of restaurants IHOP feels that they can focus on re-energizing the brand, providing “strong marketing and operations leadership”. They argue that the category, in general, and Applebee’s in particular, failed “to stay fresh”, causing consumers to get bored. And with so many other choices available, consumers went elsewhere. To re-vitalize the brand their answer will be to differentiate. That means changes in all areas including “the food, advertising, [the] building – everything the guest sees and touches.” Being different, of course, isn’t enough. The food, even if it is unique, it still has to be good.

Mexico

Stockpiling grain: Responding to proposals from various peasant organizations, the Secretary of the Economy is saying that they will create a strategic grain reserve. The stated purpose is to assure ample supplies of corn and beans for the domestic food market. At the same time, the Secretary of Economy is reviewing the rural employment program in marginal areas. We see these efforts, however, as part of a strategy to deal with potential political and social pressure coming from the transition to an open market, which goes into effect this coming January under the NAFTA. The creation of a strategic reserve converts the government into the buyer of last resort. In other words, Mexico’s peasant farmers will have an outlet for their corn and beans --and jobs -- even as the industry imports duty-free grains.