In the face of recent food safety scares and increasing international demand for safe, clean food, Australia has become one of the first ports of call because of its reputation for food product safety, quality and integrity. The Australian brand cache, as well as certain individual company brands, has exploded in overseas markets.
But is this a double-edge sword? Can these brand owners keep up with demand without compromising brand integrity? And while some brand owners have gone it alone, others have created a unified front. So, should Australia’s dairy, wine and horticultural industries follow in the footsteps of the red meat sector, consolidating their products under the one Australian brand?
Key drivers of demand
With our lush landscapes and crystal blue skies, there is mistaking why there is an international appetite for Australia’s clean, green products. Australia is renowned for its food safety and integrity. Assisted by organisations like the Australian Food & Grocery Counsel and HACCP Australia, we have impeccable regulations when it comes to the production and processing of food products. Some countries do not have such a strong regulatory framework and foreign consumers are looking to Australia to delivery on its reputation.
The Chinese infant formula contamination in 2008 drove Chinese parents beyond their own borders to safe markets like Australia, where the Infant Nutrition Council provides stringent guidelines to manufacturers of infant formulations, sparking the “white gold rush”. With its gold-standard Australian pedigree, Bellamy’s conquered this market with a strong value-add – being exclusively organic – which is particularly appealing to Asian consumers who are increasingly demanding these food products.
With 16 million babies born in China annually, Chinese parents are paying more than 200 per cent over the recommended retail price for a tin of Australia’s best organic infant formula. A similar phenomenon was seen in Hong Kong and Singapore, although recent changes in China’s food import regulations have caused great impact on dominant Australian companies in the market.
Blackmores is another overseas blockbuster that has leveraged its Australian origins. As Australia’s leading natural health brand, the company’s stock has increased over 1200 per cent in the past 10 years. Blackmores has also aggressively grown in the Asian market, servicing the growing middle class and their wellness needs in China, Malaysia, Thailand and Singapore. Like Bellamy’s, Blackmores experienced “passive” or “grey” (daigou) market sales with foreign consumers travelling to Australia to purchase large quantities of product to re-sell in China.
What's in a brand?
While Bellamy’s and Blackmores products play a vital role in their success, in the eyes of the consumer their brands and other intellectual property help maintain an internationally recognized standard. A brand is a badge of origin to distinguish the goods or services of one company from another. Trade marks form part of a company’s brand and securing exclusive rights to a distinctive logo, slogan or word mark is important, especially in the fast-moving consumer food products market.
Bellamy’s has easily identifiable packaging, branded with “Australian made” and “certified organic”. They have trade mark filings across the world and secured registrations of a suite of marks in Australia, including the slogan “Bellamy’s Organic: A pure start to life”.
Securing intellectual property rights to these trade marks gives Bellamy’s enforceable rights against anyone who uses their trade marks without consent, ensuring they generate the economic benefit and value from their branded products.
One brand, one voice
While the success of Bellamy’s has been extraordinary, Australian companies have also learnt that tackling the international market alone can be very challenging and financially detrimental. The alternative: one sector, one brand, one voice.
Pre-2015, Australian red meat was being sold internationally under 75 different brands. The resounding message was that the overseas market was “confused” and “cautious” – confused as to what products are genuinely Australian and cautious of counterfeit product. Meat & Livestock Australia (MLA) – a producer-owned, not-for-profit organization that delivers research, development and marketing services to Australia’s red meat industry – attempted to address these concerns with unified branding, “True Aussie”. The trade mark comprising a colourful map of Australia and the words “True Aussie” easily identified the Australian origin of the red meat products. The brand is also underpinned by Australia’s red meat sectors stringent food safety and traceability integrity systems.
How are individual companies fared in this unified approach to marketing? It is a two-sided coin.
For companies that have had limited exposure to international markets, it creates new supply opportunities, increased product visibility and improved farm gate profits. For those companies that have spent years building their own successful brand overseas, they must now compete with a unified brand that has greater capacity to meet demand. Companies under a unified brand should also be mindful of the consequences of variations in product quality or a possible food counterfeiting event – these impact the whole brand and all participating companies – whereas a single brand owner has control over its own food standards and will not be tarnished by any quality problems that affect a unified brand.
So, go it alone or join forces? If as a brand owner of Australian produce you have the opportunity to move into an international market, you need to think about your branding strategy and the pros and cons of going alone or joining forces. But one thing is for sure – the “Australian brand” is trusted throughout the world.
First published in Food Australia magazine, May\June 2017 Volume 69. Issue 3. Republished with permission.
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Author - Renee White, Associate