GIs: Market Potential & Players’ Strategies in the EUGIs: Market Potential & Players’ Strategies...
Transcript of GIs: Market Potential & Players’ Strategies in the EUGIs: Market Potential & Players’ Strategies...
GIs: Market Potential GIs: Market Potential & Players& Players’’ Strategies Strategies in the EUin the EUJeanJean--Louis RastoinLouis RastoinMontpellier Montpellier SupAgroSupAgro / UMR / UMR [email protected]@supagro.inra.fr
Cal-Med Consortium Workshop IIIMediterranean Products in a Global Market PlaceEuropean Mediterranean InstituteBarcelonaApril 26th-27th, 2007
OutlineOutlineResearch question: Research question: What strategy based on the GIs What strategy based on the GIs Market in the EU ?Market in the EU ?3 key points:3 key points:
-- The The ““Food LabelingFood Labeling””-- Food Market SegmentationFood Market Segmentation-- Strategic analysisStrategic analysis
EU : multiplicity of labelingEU : multiplicity of labelingOfficial Quality Official Quality SignsSigns
PDO / PGIPDO / PGIGTSGTSPCC (France)PCC (France)National labels National labels ((e.g. Label Rouge e.g. Label Rouge in Francein France))ISO Norms ISO Norms 9000/14000/220009000/14000/22000
Private SignsPrivate SignsCommercial Commercial Brands Brands ™™Collective Collective BrandsBrandsNorms (IFS, Norms (IFS, EurepGapEurepGap, , BRC, GFSI)BRC, GFSI)
Registered GIs in the UE in 2006Registered GIs in the UE in 2006
Fruits, vegetables and cereals 162 22,8%Cheeses 154 21,6%Fresh meat and lights 100 14,0%Oils and fats 94 13,2%Meat-based products 79 11,1%Mineral waters 31 4,4%Other products of animal origin 23 3,2%Bread, pastry, cakes 18 2,5%Other Annex products 18 2,5%Beers 18 2,5%Fish, molluscs and crustaceans 9 1,3%Essential oils 3 0,4%Natural gums and resins 2 0,3%Hay 1 0,1%Total PDO + PGI 712 100,0%Total PDO 414 58,1%Total PGI 298 41,9%Source : EU-DGARD, Agriculture in the EU, Statistical and Economic Information 2006, Bruxelles, 2007
Total PDO+PGI
EU List of Quality Wines Produced in EU List of Quality Wines Produced in Specified Regions (QWPSR), 2007Specified Regions (QWPSR), 2007
Country / GI Number ShareSlovenia * 540 29%France 472 25%Italy 374 20%Spain 103 6%Romania * 52 3%Bulgaria 51 3%Portugal 49 3%Slovakia 47 3%Greece 43 2%S/Total, 9 countries 1 731 93%Other 8 countries 129 7%Total UE 1 860 100%Brasil 1 Vale dos VinhedosUSA 1 Napa Valley* Without Official registrationSource : EU - List of quality wines produced in specified regions, 22/03/2007 - (Published pursuant to Article54 (4) of Council Regulation (EC) No 1493/1999)
EU Production of quality wines (QWPSR), EU Production of quality wines (QWPSR), 20052005
2002-2005
Change
Total (M.hl)
QWPSR (M.hl)
QWPSR share
QWPSR
1 France 51 635 27 907 54% 6%2 Italy 48 882 15 000 31% 20%3 Spain 38 031 12 860 34% 13%8 Germany 12 469 9 514 76% 11%
11 Portugal 6 816 3 287 48% -21%18 Austria 2 500 2 221 89% 10%31 Czech Republic 532 470 88% 97%13 Greece 4 226 401 9% 19%
EU-25 169 821 73 068 43% 11%Sources: FAOSTAT , 01 April 2007 and EUROSTAT, 15 April 2007
2005
Countries
World rank
(Total prod.)
The rise of EU PDOThe rise of EU PDO--PGI registration numberPGI registration number
Number of PDO + PGI 2000 2006 ChangeOther Annex I products (spices) 8 18 125%Bread, pastry, cakes 10 18 80%Fish, molluscs and crustaceans 5 9 80%Essential oils 2 3 50%Meat-based products 54 79 46%Oils and fats 65 94 45%Fruits, vegetables and cereals 117 162 38%Other products of animal origin (eggs, honey, etc.)
17 23 35%
Beers 14 18 29%Fresh meat and lights 82 100 22%Cheeses 142 154 8%Mineral waters 31 31 0%Natural gums and resins 2 2 0%Hay 1 1 0%Total PDO + PGI 550 712 29%Source : EU-DGARD, Agriculture in the EU, Statiscal and economic information 2006 and 2000,
Distribution of GIs by EU countries, 2006Distribution of GIs by EU countries, 2006
Countries / Products
Animal origin
Vegetal origin
Beverages
All products
PDO % Total
Italia 63 92 0 155 68%France 103 44 0 147 47%España 44 53 0 97 58%Portugal 68 25 0 93 58%Elláda 22 62 0 84 73%Deutschland 19 7 43 69 54%UK 22 4 3 29 45%Österreich 8 4 0 12 67%Total EU 25 365 298 49 712 58%Med countries 300 276 0 576 60%Med/Total 82% 93% 0% 81%Source : EU-DGARD, Agriculture in the EU, Statiscal and economic information 2006, Bruxells, 2007
Segmentation: The 3 Food MarketsSegmentation: The 3 Food Markets
INNOVATIVE MARKET
Segment : HealthProduct : « Nutraceutics »Value : Technological
advance
NICHE MARKET
Segment : High qualityProduct : « authentic »Value : Place of Origin, organoleptic & cultural attributes
MASS MARKET
Segment : day-to-dayProduct : basic, safeValue : price, segmentation
French Food Retail MarketFrench Food Retail MarketSegmentation & Trends Segmentation & Trends -- 20042004
SegmentRetail sales (€ Bil.)
Market share
Annual average
growth rate for the last 10
yearsMass Market 104 79% 0 -1 %
Innovative Market 6 5% 15-20 %
"Quality Label" Market 21 16% 5-10 %
Total 131 100% 1-2 %
Source : Rastoin, 2005
Quality labeling as a driver for economicQuality labeling as a driver for economicdevelopment (France, 2004) development (France, 2004) -- 11
ProductsQuality labels
(number)
Farmers (number)
(€ Bil.) %
Wine and brandies 467 49 000 8,6 55%
Other PDO 74 120 000 1,7 11%
Total PDO 541 169 000 10,3 66%
Red Label 348 1,4 9%
PCC 208 2,8 18%
Organic food 1 11 000 1,2 8%
Total 1 098 180 000 15,7 100%
Total agri-food firms 6 000
Source : Agreste, Enquête 2004 sur les produits agroalimentaires sous SOIQO
Producers Sales
Quality labeling as a driver for economicQuality labeling as a driver for economicdevelopment, 2004 (France) development, 2004 (France) -- 22
2004 - France
Products with quality and place of origin labels
(PDO, RL, PCC)Total Mean
Quality label
(number)
Average Price
(€/kg)
Meat 2 772 7 408 3,36
Cheese 1 652 27 59 8,04
Meat preparations 644 17 37 14,44
Fruits, vegetables & cereal 531 5 107
Other products 207 7 29
Butter and creams 73 24 3 3,95
Eggs (price/unit) 45 7 6 0,16
Total 5 924 9 649
Source : Agreste, Enquête 2004 sur les produits agroalimentaires sous SOIQO
Revenue (M.€)
The EU Market for GIs Products (excl. Wine), The EU Market for GIs Products (excl. Wine), 20042004
Countries € Bil. ShareItaly 3,8 30%France 2,4 19%Spain 1,4 11%Portugal 0,3 2%Greece 0,3 2%5 Med countries 8,2 64%EU - 25 12,7 100%
PDO share in total food consumptionMed countries 2,3%Other EU countries 1,1%Total food consumption EU-25 (€ bil.) 776Source : nos estimations d'après Eurostat et Insee, 2007
Economic Size of « Terroir » Private Labels of Large retailers– France -
NANANANA100 M100 M€€305 M305 M€€Sales Sales (2002)(2002)
140140250250180180300300Items Items (2003)(2003)
PatrimoinePatrimoineGourmandGourmand
(Cora)(Cora)
Savoir des Savoir des SaveursSaveurs
((SystSystèèmemeU)U)
NosNos RRéégionsgionsontont du Talentdu Talent
((LeclercLeclerc))
RefletsReflets de de FranceFrance
(Carrefour)(Carrefour)
Source: Linéaires N° 178, Février 2003
TM (at INPI) with “Terroir” in France: more than 1000 in 2000
3.3. Suppliers in the EU Suppliers in the EU market : market : strategic analysis & strategic analysis & performancesperformances
The place of the GIs in firm The place of the GIs in firm strategies : Theoretical basisstrategies : Theoretical basis
Individual strategies : RBVIndividual strategies : RBV (Barney, (Barney, WernerfeltWernerfelt, , ArrArrèèglegle et et QuellinQuellin))Collective strategiesCollective strategies : : «« agglomeratedagglomerated »» or or «« federativefederative »»strategies (strategies (AstleyAstley & & FombrunFombrun, 1983, , 1983, BresserBresser & & HarlHarl, 1986) = competing , 1986) = competing firmesfirmes coming closer on common coming closer on common objectives on a territorial basisobjectives on a territorial basis=> => ““TerroirTerroir strategiesstrategies””
The The ““TerroirTerroir”” EffectEffectSeveral definition (agronomists, Several definition (agronomists, economists, managers, sociologists, economists, managers, sociologists, anthropologists, geographers, anthropologists, geographers, historians,historians,……))
«« Local products based on a strong Local products based on a strong territorial identity and reputation, and/or territorial identity and reputation, and/or typical products based on specific typical products based on specific modes of production and whose quality, modes of production and whose quality, reputation or any other characteristics reputation or any other characteristics are attributable essentially to their are attributable essentially to their geographic origingeographic origin »» ((SylvanderSylvander, EU Dolphins project, final , EU Dolphins project, final report, 2004)report, 2004)
““TerroirTerroir”” as an individual strategy support: as an individual strategy support: Resources, competencies, Resources, competencies, capabilitiescapabilities
Specific assets
-Tangible-Intangible
-Know-how-Creativity-Relationship (social capital)
-Territory-History-Brand-Networks•Vertical•Horizontal
Knowledge-Technology-Marketing-Management-Finance
R
C
Basic Distinctive
Performance
Capabilities
Market
““TerroirTerroir”” in in SMEsSMEs Strategic and Strategic and Governance Models: an empirical Governance Models: an empirical
surveysurveyGovernance Structure
400 SMEs (Languedoc-Roussillon) Patrimonial / Independent
Entrepreneurial / Open
Stokholder’s equity
Managerial / Financial
Market access
Sub-contracting - - - ( +/- ) + + +(9%) Basic
Geographic closeness + + + (25%) ( +/- ) -
Sub-contracting - ( +/- ) + + +
Geographic closeness + + +(38%) ( +/- ) -
Stra
tegi
es
Differentiation "terroir"
Focalization - - - + + + (28%) ( +/- )
+: Governance/Strategy adequacy
-: Governance/Strategy conflict Source: Couderc J.P., Falque A., Rastoin J.L., Remaud H., 2002, Configurations stratégiques de la petite entreprise agroalimentaire, XIème conference de l’AIMS, Paris, 5-7 juin
SMEsSMEs Brands and Performances in Brands and Performances in Languedoc Roussillon Region (1998)Languedoc Roussillon Region (1998)
Source : Aurier P., Couderc J.P., (2000), DADP, Inra, Montpellier
Label AV/Employee (K.€)
AV/Sales (%)
Terroir (Brand or PDO/PGI) 133 49 Owner’s Name Brand 50 37 Other 51 27 Total 400 SME 100 43
Milk Price Differentiation, 2004, France
28
29
30
31
32
33
34
35
36
37
38
Label PDO PCC Other QS Without QSSource: Desbois and Nefussi, 2007
119
115
102 101100
Index
Sample : 670 Dairy farmsrepresenting 37 400(RICA/FADN)
Dairy Farms EBITBA, France, 2004
0
5
10
15
20
25
30
35
Label PDO PCC Other QS Without QSSource : Desbois et Nefussi, 2007
132
114
92 95100
Index
Dairy Farm, Return on investment, France 2004
24
25
26
27
28
29
30
31
32
33
PDO PCC Other QS Without QSSource : Desbois et Nefussi, 2007
Source : adapted from Sylvander B, (2004), Final Report, Dolphins Project, EU-FPR 5th, Inra-Urequa, Le Mans, p. 26
Collective Strategies Parameters / Rationales
Individual strategies (Firms’ rationale) Territorial rationale Sectoral rationale
Characteristics One enterprise
Several enterprises & Institutions in a given geographic area
Several enterprises in the same sector
Dynamic Competitive market Spatial co-operation Vertical co-operation
Objective Profit maximization, market value
Create value for the territory
Supply Chain growth (product orientation)
Production model Specialized Diversified Specialized Intensification level High Low (sustainability) High/Low
Code of practice Integrated Negotiated Negotiated Player’s organization Autonomous Regional coordination Vertical coordination
Patrimony Portfolio & Brands (Goodwill)
Territory (geography & history) Product
Flexibility High Impossible Regular
Agri-Food Strategic Models
Relevance of Relevance of ““TerroirTerroir”” labeling in labeling in PlayersPlayers’’ StrategiesStrategies
entreprise
Customer 1
Customer 2
Customer 3
Terroir 3 (Country)
Terroir 2 (PGI)
Terroir 1 (PDO)
Different Territorial Anchorage, depending on :
• Customer’s perception
• GI notoriety
• Perceived “Terroir” specialization
Source: Benkhira-Fort, 2005
Concluding remarksConcluding remarksVery High GI and Quality Labeling density Very High GI and Quality Labeling density in the EU (risk related to Consumers getting in the EU (risk related to Consumers getting confused)confused)
The market share of GIs in the EU Food The market share of GIs in the EU Food Market is low except in Med CountriesMarket is low except in Med Countries
An important growth potential for An important growth potential for SMEsSMEs““TerroirTerroir”” based strategies (Economic based strategies (Economic performances and Sustainable performances and Sustainable Development requirements)Development requirements)
Uncertainty on institutional framework Uncertainty on institutional framework (WTO dispute, EU policy)(WTO dispute, EU policy)
Distribution of GIs by countries, excluding Distribution of GIs by countries, excluding the EU in 2004the EU in 2004Country Frequency Percent
1 USA 42 22,0%2 India 16 8,4%3 Ethiopia 14 7,3%4 China 12 6,3%5 Togo 9 4,7%6 Turkey 7 3,7%7 Mexico 6 3,1%8 Peru 6 3,1%9 South Africa 6 3,1%
10 Japan 5 2,6%11 Morocco 4 2,1%12 Argentina 3 1,6%13 Cameroon 3 1,6%14 Ghana 3 1,6%15 Korea 3 1,6%
Total Top 15 139 72,8%Total 49 countries 191 100,0%
GIANT Database, http://www.american.edu/ted/giant/global_analysis.dJim Lee and Tamara Dorabawila, American University, 2004
Consumption pattern
- festive eating- Cooking,
recipes
Local referencesTradition &
Region Know-How
Production pattern
- natural, safe- pesticides
free
Packaging - material- colors- design
Accessibility- marketing
channel- willingness
to pay
Terroirproduct
Key Factors for defining Consumer’s Behaviour
What What ““TerroirTerroir”” Labeling for Labeling for enterprises ?enterprises ?GI and Label Complementarity(Brandade de Nîmes Raymond Geoffroy)GI alone (Pélardon des Cévennes, Cassoulet de Castelnaudary)GI in the product label (Porc du Pays d’Oc, Grisettes de Montpellier, Cap Camargue)GI in the corporate label (VigneronsCatalans, Provence Régime)
Source: Benkhira-Fort F., 2005, EFFETS PRINCIPAUX ET DE CONGRUENCE DE LA RÉGION D’ORIGINE, DU PRODUIT ET DE LA MARQUE SUR L’ÉVALUATION DES PRODUITS : UNE APPLICATION AUX PRODUITS ALIMENTAIRES DE TERROIR », PhD Thesis, Université de Montpellier II - CREGO