Retail grape prices in a recent survey were $1.68 pound.
So, would you pay $16.80 pound? How about $168 a pound?
Frankly, some people do every day.
Wine-making is a value-adding process to grapes, of course, and it deserves to receive a premium price for converting grapes to wine.
But, depending on where the grapes were grown – Napa Valley, for example, instead of Chester County, PA, or Virginia’s Central Valley – they command a distinct premium at the market when bottled, sometimes 10x, sometimes even more.
Branding. That’s the fundamental cornerstone of higher prices for commodities. Find a differentiation – even a modest one – and exploit it into
a USP, a Unique Selling Proposition. This is how and why the product –
or service – is different.
It’s the basis for a cachet, the halo effect that allows premium pricing. Hence the basis for the cover story in the Delaware Business Times on Food Innovation Districts.
In some instances, the differentiation may not even be healthy.
In work for DuPont, in 1986-87 I began to track the movement East from California of organic-grown produce, that is, produce on which farmers actually save input costs – e.g., the cost of pesticides – to produce farm commodities grown without them.
The industry suggests that it’s well known that some fruits shipped without fungicides can develop and grow fungus that make consumers ill, but aficionados of organics preferred the risk of illness on principle over the use of carefully evaluated fungicides.
In ongoing legal action, the State of Georgia actually has gone to court to fight to protect what it says is the $150 million value of its Vidalia-branded onions, which says something about
the value of the Vidalia brand.
Delaware also has known about branding.
“Home of Tax-Free Shopping,” our signs advertised to passers-by, although it’s not true.
Delaware’s gross receipts tax, passed as a “temporary” emergency tax measure about 1976, is nothing other than a sales tax, because it’s based on total sales, not on profits.
Subsequent action in Delaware made it a crime to tell shoppers about that tax, to “break out” the gross receipts tax on receipts and show consumers they’re being charged such the euphemistically named “gross receipts tax.”
Delaware’s attorney general even filed civil charges almost 20 years ago against a Sussex County businessman who did just that. Hence survival of the façade, “tax free shopping” in Delaware.
Now, this year, Delaware has a new branding slogan, “Endless Discoveries.” While it has predictably attracted its share of critics, Delaware’s Tourism Director Linda Parkowski makes a great case that it will do what it’s intended to with its target market segment, the non-Delawareans who the State wants to attract here to visit, tour and spend money. She’s right.
At the Delaware Business Times, we have confidence that the officials like Linda charged with growing Delaware’s tourism will use this to put forward the State’s best foot and grow that sector of our economy.
That brings it back to FIDs, Food Innovation Districts.
In this issue, Christi Milligan – herself a Lower Delaware native, a Milford HS grad – explains what Kent County is doing to brand its agriculture under the FID concept.
I’m no branding expert, although I’ve been involved in more than my share of branding in my career, helping rename businesses, non-profits, even “grass-roots” movements.
Aspects of successful branding mean connecting the attributes of the company, organization, region, individual, whatever, to the needs, wants and value of the targeted audience(s).
Some branding is done with a blank slate, e.g., Google, creating a made-up name, or adopting one, and then defining the USP around it.
Some branding is done by convention, with little regard for marketing, e.g., law firms and accounting firms which simply rely on the names of the founders, or the practitioners.
Some branding is driven by function, e.g., wealth management, restaurant. What makes McDonalds different from Wendy’s? Well, they’re different restaurants with different approaches, and each attempts to define and communicate its own differences, often in “where’s the beef?” creative ways.
Branding often requires “refreshing the brand,” which is what the State of Delaware set out to do with its “Endless Discoveries.”
But, in a society that’s increasingly glutted with communications, whether one-way or dynamic, all messages compete, and it’s up to branding to find a way to create that USP, that Unique Selling Proposition, and leverage it.
Good luck to our friends in Kent County. We’re all invested in hoping it works!