Season 1 Episode 5 –
30 years and still learning - Having spent most of my career post leaving the Royal Navy working in consumer goods, primarily in the perishable food sector. I find it fascinating that I still learn every day, sometimes it’s a reminder of what I have forgot but for the most part, I learn something new every day… Today’s episode is about Brand versus Commodity and their differences.
Is there a difference and what is it?
Yes, there is and no its not simple to explain.
However, to simplify a very deep and meaningful debate and subject.
Brands should be very focused on adding value to a category and making a healthy margin to re-invest in consumer trial and repurchase, think of Coke, they are on TV somewhere in the world every day, they have billboards and sponsorships globally, that is what a brand does, it should drag customers into to a location because it is there. (obviously that is the extreme of a brand, but it makes the point)
Commodities generally are high volume products usually originating from a raw material that are produced and traded locally and globally, such as milk, soy, flour, corn, general produce and meat. Although many raw materials end up in finished products as an ingredient, they are not usually the key component. In cases where there are products that are both, commodities and brands such as cheese, the producers differentiate by creating unique and exclusive flavors or styles which are produced with more focus on the aesthetics rather than volume produced at the lowest possible price.
Using Cheddar Cheese as the example:
Cheddar as a commodity is traded and sold over the Block Market (Chicago Mercantile Exchange) or over the milk cost in per lb / 100 wt / ton / liter values. And Sold in bulk 40 lb blocks, no fancy labels and sold in truck load quantities, throughout the industry.
Cheddar as a brand, such as Cabot / Tillamook / Hooks / Westminster (keeping the East, West, Midwest and the UK happy here) are all made with specific milk, using specific cultures and enzymes, aged to different flavor strengths in different aging conditions and labeled and packaged with consumer attractive packaging. Sold in smaller 8oz pre-cut pieces in cases of 6 to 12 pieces.
Where should your product sit?
Unless you want to be a trader, watching the market daily and speculating on the futures having invested millions of dollars in the latest production facility, you want to have a brand, a brand is what will make your passion come to life and realize your dream.
Does a brand mean I won’t have mass appeal?
No, that is not the case, your brand can be as successful and mass market as Coke or as niche as Humboldt Fog which is also everywhere in the US, I use Humboldt Fog as an example because it has been internationally recognized as an iconic cheese image, way before the company, Cypress Grove Cheese was bought by Emmi.
Now it’s all clear as mud, need more, please ask.
In our next episode, we will be talking about Branding, thanks for reading and continuing your journey from Creator to Consumer.
Interested in reading or finding out more about selling your passion or our Creator to Consumer series please visit our Chatter page at www.beachcitysales.com/blog and click on Creator to Consumer or our general site at www.beachcitysales.com, for more direct interaction please e mail us at email@example.com
Remember, whatever you know “good luck keeping up”