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Image-Building In A Consumer-Driven Market

We always have the tendency to think the present situation will persist. As many pork producers, discouraged over low prices, exit the industry, those who remain may wonder whether to stick it out. If they do, will they end up as contract growers for the large integrators?What makes the structural issues of the pork business more challenging is the growing disenchantment U.S. consumers have for modern

We always have the tendency to think the present situation will persist. As many pork producers, discouraged over low prices, exit the industry, those who remain may wonder whether to stick it out. If they do, will they end up as contract growers for the large integrators?

What makes the structural issues of the pork business more challenging is the growing disenchantment U.S. consumers have for modern food production methods.

A recent New York Times story (March 29, 2000) described pork production this way: "Raised in close quarters inside enormous buildings, the hogs foul the air for miles around, and their meat is bland, dry and tough when cooked." Is this why pork consumption is stagnant?

Consumer Attitudes Consumers are distancing themselves from their food supply and are becoming more skeptical about how their food is produced.

A cartoon that appeared in a recent issue of Barron's magazine displayed consumer ignorance about the food supply quite well. A family is going for a ride in the country with their children. The children see Holstein cows in a pasture, point and say: "Gateway!"

It's not much better in the U.K., where surveys show 25% of children think that cotton grows on the backs of sheep. Or, more recent concerns brought about by bioengineering, when consumers ask: "Will hogs that eat this corn and soybean meal be safe?"

Because consumers are skeptical and ignorant about their food supply, they don't think very positively about people who produce their food, if they do at all.

Farmers and farm animals have become such a rarity in urban Americans' real life, they are put on display. The Minnesota Zoo introduced a new feature this spring - a "traditional" farm where families can come to see and touch farm animals.

In a political sense, the farmer has no constituency and thus no real political powers. Food prices are low. The only thing that would move the public to really care about their food source would be if prices rose substantially, such as gas prices recently did.

Today's environment is dynamic, but not necessarily negative. To deal with it, and eventually profit from it, requires dedication, focus and common sense. A pork producer can do many things to reinforce a positive image.

Industry Structure While it may seem that the growth of large integrators cannot be stopped, the point will come when it simply becomes uneconomical and managerially impractical to run such large operations. Major integrators have solid management in place and a willingness to add more as needed. Can they sustain that commitment?

If you look at the history of large integrated operations in any business, I really doubt it. We may have thought that IBM would always been on top, but then came Microsoft - and then it was surpassed by CISCO. Business models will keep changing, and the pork business is not unique.

Be aware of the e-economy and how it can fit into your operations. But don't be too awed by its business models. The first of these models, Peapod, just crashed. The on-line grocer had employees shop at local stores and then deliver to the consumer.

Those who want to keep producing pork cannot wait for the e-economy companies and large integrators to get tired or make a mistake. Pork producers must do something positive now.

Iowa Premium Pork is one such initiative, which is running an integrated pork production system within the core competency of its members. Can the co-op find a chief executive who will play no favorites and run the business in a hard-nosed fashion? It can help pork producers in marketing, hedging, recordkeeping and information sharing services. The question is, can the co-op process and then market pork more efficiently than the large companies? If not, can it market its products differently because it is owned by farmers? Do consumers care, or do they just want low prices?

The key thing to remember in all of this is to stay true to what you know how to do best.

Consumer Perceptions With checkoff funds, the pork industry can affect consumer views. "The Other White Meat" campaign has shown some favorable results.

Nonetheless, we are up against a skeptical public and dedicated critics in an urban nation where politicians no longer need your vote, and where food production and processing are perceived to be in the hands of big business. The public is less averse to taking risk and more likely to buy into junk science and believe the claims of critics.

Finally, the general broadcast and print media are more interested in emotions than facts. Reporters generally lack understanding of the dynamics of the agriculture and food industries.

In the future, the pork industry will have to exert more effort informing the public of what it does. Here's a checklist of actions that the industry must take:

* Use and rely on images and emotions to influence opinion;

* Establish strong alliances; * Respond to every attack; failure to respond makes it a part of the perceived truth;

* Learn to position and reposition products;

* Look less to Washington and more to New York and Hollywood to set the public agenda for pork; and

* Find a credible spokesperson for the industry. Not an actor but one of the industry's own who can speak effectively in public.

Effective Marketing As we create a more favorable environment for food and agriculture, we can further develop some new marketing approaches.

A walk through any frozen food counter will reveal very little pork product development. Products that used to be identified with pork, such as Jimmy Dean's pork sausage, are now just called Jimmy Dean sausage.

An operation in Spain is an example of how to uplift the name of pork. It raises 60,000 hogs annually and markets its products very effectively.

This example also reinforces that all hog operations do not have to be the same. The following quote about a specialty pork product is Gully Wells' reflection on the true perfection of Jamon Joselito in "Pig Heaven It Is!" published in Conde Nast Traveler, April 2000. It reads: "We picked up the ham with our fingers, we sipped the wine, and I marveled, for the second time in my life, at the total simplicity of true perfection."

This article goes on to illustrate just what it takes to set the average pork producer apart, offering a product that consumers crave.

Typically when you go to buy a ham you have two choices: smoked or regular. Jamon Joselito is neither. This specific type of ham is only available in Spain and greatly sought by discriminating connoisseurs.

The Iberico pigs that become Jamon Joselito are raised on acorns, grass, roots and bulbs and spend the first year of their lives roaming around their owners' estates. At 18 months of age, the pigs are sent to slaughter and the curing process begins. The hams are piled on top of one another with a layer of extra coarse sea salt in between each layer and left for 10 days. Next they are rinsed with cold water, skinned and hung to "settle." The climate provides the perfect atmosphere for natural curing - exceptionally dry cold winters, very hot summers and a wide range of humidity. After a year of settling the hams are moved and grow penicillium, a soft gray mold that gives a complex bouquet of flavor. The entire process takes two years. Then, the Jamon Joselito is shipped to great restaurants in Spain, gourmet stores and the Casa Real - King Carlos' household.

Can this be done here? Probably. The important point is that pork producers need to open every marketing niche and use every marketing technique for their products.