Regional Branding - some new perspectives

R. F. Brown

4 September 2000

Australian Project Developments Pty. Ltd.
Phone/fax 02 - 6231 7261, Email apd@orac.net.au

Background

Regional branding is increasingly important in assisting regions to marketing their products, capture value added and build supply chains to access international markets.

My interest started in my formative years in Warragul, where despite its rich dairying heritage based on substantial competitive advantage in fertile land and water (rain!), most of the milk was trucked to Melbourne and even beyond (ie. to Shepparton) for further processing. However, due to a combination of small triggers, some progress has been achieved over the last five years:

• Bonlac has opened a $100m plus in a processing facility just outside Warragul,
• a dairy products plant (yoghurt etc.) opened in the Latrobe Valley (further east), and
• a range of boutique cheese manufacturers have sprung up within the region (Yarragon, Neerim South etc.)

However, from a national or international viewpoint, there is no recognition of the region's capability or products. Will this come with time? Would a regional brand have helped attract investments during the former years of very modest zero value adding? How much more value added is possible, and can regional branding help unlock it?

By contrast, there is King Island. In 1996, Wendy Craik (NFF) and I met with farmers to discuss their success in building the King Island brand applying to cheese and beef. Their action strategies have been well-documented. However there is new information now available through Mr. Michael Dimock of Sunflower Strategies, USA, who is an expert in regional branding.

The Dimock experience

Mr. Dimock's expertise came to light on 29 August 2000 when he addressed a seminar for Commonwealth officials in Canberra. The seminar was arranged by the BRS/AFFA.

His address was stimulating. Outlined below are the main subjects covered. (The full report is available to clients).

• The goal of Sunflower Strategies is to restore health and wealth to rural economies challenged by globalisation, urbanisation and the devaluation of agriculture.
• Consumers do not understand the value of food - there is a need to develop and implement strategies to add value.
• There are three main methods - refer full report.
• Product differentiation based on regional branding works.
• Regional identity is one of the few authentic differences between products
• Time is on our side - as arable land is lost, population grows, the value of food increases.
• Cooperation is essential - firm-firm, government-firm, government-firm-community.
• Regional branding is not easy - it takes time, flexibility, cooperation, capital and belief by producers in their own values.
• The need is to know your target market - knowledge, speed, together with connectivity and alliances are important.
• Each niche seeks its own qualities built around regional branding and/or eco-labelling
• Eco-labelling is designed to capture consumers concerned by personal and planetary health by confirming - on packaging or point of purchase (POP) - that earth friendly production practices were used. Organic labelling is a sub-set.
• Biologically Integrated Farming Systems (BIFS) is also part of the eco-labeling agenda. Its goal is to confirm a sustainable approach with a large reduction of inputs - involves soil building, bio-control for pests, elimination of hard materials - toxins and carcinogens, efficient water use.
• Mr. Dimock referred to seven case studies - MPS, MBT and Millinova (all Netherlands) and the Food Alliance, California Clean, Core Values Northeast and BIOS (all USA).

Additional points

Further points raised by Mr. Dimock and seminar participants include:

• California is a high cost producer - $65k per acre for production land. This is why value adding is important.
• Multinationals and supermarket chains that serve mass markets may not be immediate supporters.
• Small companies are those with the drive to innovate.
• Regional branding is closely linked to cluster agendas eg. builds on competitive advantage and collaboration.
• There is a need to think about brand hierachies - local, regional, State, National. It is wrong to believe that overseas customers can only recognise the Australia label. State-based labels can be the product of State-based bureaucracies (eg. marketing boards). There is a role for government to facilitate the uptake of regional branding.

The Way Forward

At the conclusion of the seminar, I asked Mr. Dimock to consider returning to Australia in the near future to conduct further workshops in regional Australia.

He was enthusiastic about this, provided appropriate arrangements could be put in place. Representatives of Commonwealth and NSW government agencies present at the seminar agreed to liaise with my company to this end.

Should you be interested in taking up this offer, or know of another group that would, please contact me as soon as possible.