Written by Matt DiLeo
It’s 3 am local time and I’m wide awake, fixated on the challenge of brand differentiation in ketchup…
I recently spoke with one of the ketchup tomato breeders I know. Among other topics, he lamented the consumer’s irrational fixation on price. He pointed out that most of us won’t hesitate to grab a generic bottle of ketchup over a trusted brand for a difference of only 20 cents – which breaks down to no difference over the months it sits in your fridge: How do you sell a better product to a customer who’s not willing to pay 1 cent more per week?
It’s the advantage (and burden) of major brands that they specialize in making a high-quality, consistent product over years and decades. (If there was an outbreak of botulism in a Campbell’s or Del Monte, would you ever buy that brand again?) Meanwhile, generic food companies can just grab whatever ingredients are cheapest at the moment, throw them together and ship them out. A less than ideal batch may sneak its way into various supermarket generics once in awhile, but even if one generic brand gets associated with poor quality, they can just come up with a new (equally generic sounding) name. So how can a branded food company make a profit when they have to put all this extra effort into product quality and consumers nonetheless treat it like a commodity? And, of course, it doesn’t help when consumers perceive your product as a low-rent item in the first place…
This probably sounds like a “who cares? / too bad for them” type of problem but it has repercussions outside of the ketchup game. People have the same attitude towards all products – including fresh fruits and vegetables. Now I, as I imagine many of you would, quickly protested this idea. Unlike ketchups, I perceive huge difference between “high” and “low” quality apples and oranges. I won’t touch anything that looks like a Red Delicious and I don’t even buy tangerines (let alone oranges) unless they’re specifically labelled as clementines.** He took my point and then asked if I cared what variety my apple was (so long as it exceeded my stated threshold). I said “no” and he elaborated on the problem – that although I have a threshold for apple quality, the likelihood of the apple product I would buy on a given week (or whether I’d buy apples at all) was very strongly linked to what was on sale at the time.
So how does all this relate to transgenic food? People like myself have been flogging the idea that the public resistance to transgenic food is due in part to the lack of a consumer benefit – all the traits so far benefit the farmer (by yield, convenience and lower risk). This will all change, so the story goes, when transgenic Botrytis-proof strawberries hit the supermarket shelves. “Ah!,” the customer will shout, “Look at these beautiful strawberries surrounded by ones gray with mold!” This only works though if customers are really dedicated to buying strawberries when they head to the supermarket. If instead the customer doesn’t really care whether he can get strawberries on any given day, he just won’t buy strawberries on the days when the choice is between gross molded “generics” and expensive transgenics.*** Maybe he can just buy strawberries another day.
The breeder definitely had a point, but I immediately brought up the hordes of people I know who gladly hand over extra cash to get perceived superior quality (or merely philosophy) from the Trader Joe’s and Whole Foods of the world. But, he emphasized, these are the same people who are most opposed to GM foods.
It was a disheartening series of arguments. Though, of course, if you can find a way to make a consistent profit branding something as ordinary as ketchup, it seems like there should be a place for a slightly more expensive fresh market (out of season) tomato that still tastes like a tomato…
* “Food” brands that are actually vertically integrated enough to do their own breeding include Campbell’s, ConAgra (Hunt’s), Heinz, Land’O Lakes, Frito-Lay and Orville Redenbacker.
** Well, when I’m too far from the West Coast, that is.
*** Although a difference in price will be less inevitable if regulations get pared back
Written by Guest Expert
Matt DiLeo has a PhD in Plant Pathology from UC, Davis. During his postdoctoral research at Boyce Thompson Institute, he researched unintentional effects of genetic engineering. Matt builds R&D teams and biotech platforms: genome editing, gene discovery, microbials, and controlled environment agriculture.