Developing and managing a certification program as an agricultural marketing tool

              Developing and Managing a Certification Program
as an Agricultural Marketing Tool
Research Report 780
J.M   Lillywhite and J.E. Simonsen1
SBB
1—
INTRODUCTION
Traditionally, agricultural crops have been considered
commodity goods; that is, once crops from multiple
farms were combined, they became indistinguishable.
Today, however, some producers are exploring the possibility of branding their agricultural products. Branding
is a popular marketing technique that allows consumers
to identify—and build a demand for—a good based on
perceived or real differences that make it "stand out"
from the competition. Consumers in the United States
are often willing to pay more for a product that contains
attributes that may not be available in the generic commodity version of the product. For example, traceability
and certification of the product's origin or quality have
become selling points for many foods ("Real California
Cheese" and "Certified Angus Beef" marketing campaigns both imply quality and traceability claims).
Branding an agricultural commodity allows producers to develop a reputation with consumers. Marketing
adds value since it allows consumers to relate a particular brand with a quality standard or benefit that is
important to them; by adding value to the product in
the form of a brand, producers may be able to increase
margins compared to the non-branded version of the
commodity. Many agricultural commodities have used
branding with varied amounts of success. For example,
the pork, chicken, and beef industries have utilized a
branded product (e.g., Tyson Selects, Certified Angus
Beef) to attract consumers. A number of branded fruits
and vegetables have appeared in the market. For example, Texas Ruby Red grapefruit, Vidalia sweet onions,
and Kona coffee command premiums above commodity
prices (e.g., Clemens, 2002; Major, 2004; Teuber, 2007)
due to perceived or real differences highlighted by the
commodity's branding campaign.
For agriculture industries faced with competition or
other marketing challenges, developing a certification
may be an appropriate marketing tool. This publication
focuses on three agricultural industries in the United
States that have successfully developed and implemented
a variation of a certification program to distinguish their
product from the competition: Vidalia onions, South
Dakota certified beef, and California olive oil. These
case studies highlight the different avenues and administrative structures that may be used to create and manage
agricultural certification programs. The successes and
challenges faced by these programs provide valuable
insight for industries considering a certification program
of their own.
VIDALIA ONIONS
Overview
The Vidalia onion, a trademarked sweet onion grown
in a specific region of Georgia, has long been known for
its unique flavor. The onion is protected by both a state
trademark and a federal marketing order, mostly due to
the efforts of farmers who created several layers of protection in order to defend the value of the Vidalia name.
While these layers of protection work together in the Vidalia program, it would be possible for another industry
to create a certification program without the marketing
order component of Vidalia's program.
Program Development
While Vidalia onions were grown as early as the 1930s,
Georgia farmers (as well as others mislabeling their onions in order to receive the Vidalia premium) used the
name without legal representation for many decades.
When several lawsuits ensued over the mislabeling of
non-Vidalia onions, precedent was set that the Vidalia
name was not protected, and area farmers united to protect the name and its brand recognition.
In 1986, the state of Georgia created the Vidalia
Onion Act (see "Vidalia Onion Act" entry in References section for URL to full text), which created a state
trademark for the term "Vidalia Onion" and restricted
'Respectively, Associate Profess
d Senior Research Specialist, Department of Agricultural Economics and Agricultural Business, New Mexico State University.
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