The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
6-10 de Julio de 2009

The World

The Colonel hasn’t been kidnapped: Companies will often spend considerable resources on developing a symbol that identifies the company or the company’s product to the consumer. When consumers come to see the symbol and the company as one it has a number of positive benefits, but it can turn into a problem. This is the case for KFC, the fast food chain. The company had their origins selling fried chicken. The founder was an honorary Kentucky colonel; thus the name of the chain Kentucky Fried Chicken. A stylized image of the founder became the symbol of the chain. This gave the chain a personality and consumers identified the chain with the Colonel. This was all well and good until Yum! Brands, the present owners of the chain, decided that they needed to align the image of the chain with the new realities of the consumer market. Kentucky Fried Chicken became KFC. Recently, looking to offer healthier options KFC introduced a grilled chicken dish. As part of the launch they started a “search for the ‘Ultimate Kentucky Grilled Chicken Fan’ to serve as the face for the new product line.” This has caused “a backlash from customers who have told the chain they’d rather the Colonel stay right where he is.” Trying to have it both ways, KFC says the Colonel will continue “to be the face of the brand”, but they are still going forward with the search for the Ultimate Fan. While KFC the Colonel, at least for the time being, you can be sure that they will continue in their efforts to redefine the chain’s image.

A sexy functional package: For food companies packaging becomes part of the end game, particularly for products designed to go to the end consumer. Looking to capitalize on the package as part of food company strategies as well as to deepen their participation and segmentation of the packaging market Tetra Pak just came out with a “new carton for chilled liquid dairy products”. What is interesting is how they are marketing the carton to the industry. First of all they say that the carton’s shape “provides extra space for additional messaging”, which means that the carton has more options for branding. It uses less material and is shelf-ready. The carton is also designed to make it easier to stack, which “results in an efficient use of space”. Having said that the package has something for the dairy company, for the retailer, they go on to say it is also consumer friendly. It is easy to open and pour, particularly for thicker liquids. In other words, the optimum package has something for everybody along the value chain.

Update on organics: Last week we were talking about the relative strength of the organic market. We were told, however, that consumers are not supporting the market for organic milk. In fact, there are some estimates that have total U.S. sales of organic milk falling by 15% this year compared with 2008.

Mexico

A good first cycle and a slow start to the second: Mexican agriculture is comprised of two cropping cycles during the year. The first cycle which is harvested in the first part of the year and largely on irrigated land has enjoyed a growing season. This resulted in total production up by 6.8%. Looking towards the second cycle, which is largely on rainfed land, planting has gotten off to a slow start. At the end of May, the latest date for which data is available, planted area is 1.5% behind the same period last year. It is still too early to say that production will fall, but this should be watched.