miércoles, 13 de mayo de 2009

The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
11-15 de Mayo de 2009

The World

Its value that counts. With the economies contracting in a number of markets consumers are looking for ways to cut back on spending. This has taken the form of trading down to similar, but lower cost products, favoring private label products, cutting down on the frequency or just not buying certain food products. For the branded food manufactures the challenge is to keep consumers buying their products. Some analysts have said that in difficult economic times consumers will see branded products as a safe haven in an unknown and threatening environment. Other analysts, however, say that consumers feel “betrayed by the institutions [they] trusted most”, and some of that can rub off on branded food products. One of the strategic responses involves what some are calling “engagement”, i.e. maintaining contact with consumers, making them feel that they have a stake in the product. Even more crucial for the branded food companies have been to promote the concept of value through what is being termed “”performance-based value metrics”. That is, saying that value “goes beyond [just] price”. This means that they have to tell “consumers that their products work better, even if they do cost more.” This involves broadening the concept of value to go beyond just quality and taste to include concepts such as food safety, as well as intangibles, such as social responsibility.

A cartoon treat. Promoting value isn’t the only strategy that companies are following. In some cases, especially in the confectionary market, where it is admittedly hard to sell health, one of the options is to offer fun. That is what Mars is doing with their M&M’s brand candy. A couple of years back they set up a brand extension, MY M&M’s that allow consumers a “personalized printing option” for the candies. That means that consumers can have their own personal messages printed on the candies in 22 different colors and in “a variety of fonts”. Now they have added another element to the personalized M&S’s. Mars has entered into an agreement with Disney Consumer Products. The agreement will allow consumers to order the M&M’s with Disney themes, in order to, as the company says “add a real fun element to celebrations”. There are nine different themes, which are being offered in 17 different colors. That works out to 153 different options, not counting the different fonts. What is also interesting is that to order the personalized candies, you have to go online. This gives Mars the option of developing a data base of clients disposed to their products.


The pigs aren’t sick but the market is ailing. With the outbreak of influenza, improperly named swine flu, the consumption of pork contracted —also due to the emergency measures put in place to contain the spread of the influenza. Now the Mexican Secretary of Agriculture has announced a series of measures to support the swine industry. A key element will be MX$45 million directed towards promoting pork consumption. Additionally, financing will be made available to hog producers, which, among others, should allow for restructuring of existing credits. They are also said to be working on a scheme for factoring that will help to generate liquidity for the market. Meanwhile, meat manufactures in order to support domestic producers said that they will give preference to Mexican hogs over imported pork.

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