What Makes a Brand? The Aberdeen-Angus Experience

Two news clippings caught my eye last week. One, in the Times, told us that French gastronomes have selected Aberdeen-Angus beef for La Bocuse d'Or, apparently the world's most prestigious cooking competition. The director of the competition said "We need to have very great quality for our competitors and Aberdeen-Angus is a dream product". It's difficult to imagine a higher accolade. The other clipping announced that the Aberdeen-Angus Cattle Society has appointed a brand development manager whose task is to "enhance the society's current press, pr, and marketing programme", and grow brand awareness and market share.

Marketing textbooks define a brand as a distinctive product offering, differentiated from its competitors. And what is so good about strong brands is that their specialness means they generally command premium prices, which in turn leads to higher profits.

Aberdeen-Angus is a great example of branding. It is a recognised, top quality, premium priced product from farm to fork.

Headlines such as "Record 30,000 guineas hit for AA female at Perth" (October 2007), and an even more eye popping 32,000 guineas paid for Penguin Mr. Elevate in February indicate that fine AA breeding stock regularly commands very high prices in the auction ring.

When it comes to selling the finished animal, beef processors are willing pay a premium, and at the final, and probably most important stage in the chain, those shops and restaurants who sell Aberdeen-Angus always charge more for it because consumers feel that when they buy Aberdeen-Angus they are buying the best.


There are many branding lessons to be learnt from the Aberdeen-Angus story. If branding is all about distinctiveness, then Aberdeen-Angus gets off to a flying start with its instantly recognisable black-coated cattle.

To that can be added its distinctive marbled meat, it's taste and tender texture. The meat's excellent eating qualities are not just in the imagination but have been confirmed in blind product taste tests. (See DEFRA report Is0102)

Branding is also about having a good reputation, and Aberdeen-Angus meat enjoys a reputation which has been built over decades, and is still being reinforced by stores such as Waitrose and Marks and Spencer who feature it in their shops, and restaurants such as Burger King with their heavily advertised Angus burger.

Finally, the strength of the brand means that it can be sold for that bit more. Both Marks and Waitrose sell their Aberdeen-Angus meat at a premium to the rest of their range, and the Angus sells at 50p more than the standard Whopper. And premiums are always useful.

Footnote

There are of course some downsides to farming the Aberdeen-Angus breed. They tend to finish lighter than continental cattle, and can run to fat. Both can reduce the return that finishing farmers get for their stock. A trade off has to be made between these issues and any price premiums achieved.

Food Buying Habits - How, When, and Why Did It All Change?

Food shopping habits have changed. Consumers are changing where they shop, how they shop, and what they buy.

Morrisons, home of low prices, and Waitrose at the premium end of the scale, both published half year results a couple of days ago. Morrisons grew like for like sales by 7.6%, (like for like meaning sales in stores open at least a year), and profits by 19%. Waitrose grew sales by 2.5%, a third of the rate of Morrisons, were forced to cut some prices to compete and hold market share, and saw profits fall by 8%. ALDI, viewed as having the cheapest prices of the lot, is now said to be growing sales at about 30% versus last year. A confident statement from ASDA a few weeks ago indicated that they are doing just fine because they offer really low prices. And Sainsbury and the once the once invulnerable Tesco are losing out.

Consumers are changing what they buy. We know that organic sales are struggling, reportedly down 20% in August versus last year, that meat consumption is down 5% according to the latest figures published on the British Pig Executive website, and DairyCo says that milk consumption is down. Consumers are also buying more products in retailer's Value ranges. Morrisons showed a chart at their results presentation illustrating that across the whole of the grocery trade Value ranges were growing at about 8% in the spring, but have now rocketed to a growth of nearly 30%. By contrast Premium ranges growth has fallen from a high of 15% in March 08 to around 3% in August.

Other startling changes are happening. Sainsbury tell us that between July and August sales of tupperware containers have grown by 36%, and sandwich bags by 35%, as more people take sandwiches to work instead of buying ready made.

All in all, it seems that beleaguered Brits are leaving no stone unturned in an effort to spend less. The interesting thing though, is that although the credit crunch started almost a year ago with the Northern Rock wobble, the big changes in what and where people buy only started in the spring. Going back to Waitrose as an example, they were sailing along quite nicely until early summer.

Why the drop since then? Because that's when consumer confidence started to plummet,worn away by headlines about food price inflation, spikes in oil prices, mortgage worries, and warnings of rising energy bills Another chart from Morrisons shows that in March, consumers confidence levels were down by 18%, in August they were down by 40%. Or to put it another way, nearly half the country thinks things are going to get worse, much worse. If they are that worried, it's no wonder people are changing behaviour, battening down the hatches, and bracing themselves for what might be around the next corner.

What is clear though, is that doom mongers who say they always knew that all people want is cheap food are wrong. Despite the belt tightening, Premium sales are still growing albeit at a slower rate than previously. It does not look either as if shoppers are ditching ethical principles altogether. Waitrose says that consumers are still supporting welfare friendly food but choosing free range rather than organic to save some money. ASDA says its sales of organic produce have grown by 25%, and Morrisons reported that their sales of both Fair Trade and organic sales are growing.

As ever, it does seem as if those who offer good quality combined with good value (which is not the same thing as price) will ride out the storm, ready for an upturn in confidence.