MANAGING

FOOD & BEVERAGE COMPANIES

Local and
Global
1

KEY
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AGENDA

! The Globalization of F&B
! Leverage on Origins
! The Variety of Consumption Practices
! The Role of Origins in the Company Positioning
! The Go-To-Market Decision
! The Value Proposition Management
! The Place Branding
3

THE GLOBALIZATION OF F&B

Food is traded and marketed globally with the value of imports reaching US$1
trillion in 2009 (WTO, 2010)
Insch and Jackson, 2013

Food & Beverage has always been a global business:

Flow Trade Exchange
of F&B products characterized all eras and places

And Today
today F&B
local?
F&B are
are global
globalor
orare
local?
Local and global is a matter both of companies approach and market.
4

THE GLOBALIZATION OF F&B

The largest COFFEE
Producer
worldwide is
Brazil
(45.342.000 bags per year).
The second one is
Vietnam
(27.000.000 bags per year)

The country with the highest

per-capita CHOCOLATE
Consumption is Switzerland
(9 kilos per year)

The largest MILK

Exporter worldwide is
New Zeland
(1.818.520 tons per year)
5

THE GLOBALIZATION OF F&B

Within Japan there are
45,000 SUSHI restaurants,
while outside there are
16,000.

The largest COCOA BEANS

Producer wordwide is Ivory
Coast
(1.720 thousand tons
per year)

The city with the highest number of

Michelin star-awarded restaurants in 2015 is
Tokyo with 12 ***, 53 **, 161*,
followed by Paris with 9 ***, 14 **, 74 *
6

AGENDA

! The Globalization of F&B

! Leverage on Origins
! The Variety of Consumption Practices
! The Role of Origins in the Company Positioning
! The Go-To-Market Decision
! The Value Proposition Management
! The Place Branding
7

THE CONCEPT OF ORIGIN

Global or Local is an apparent dilemma that can be overcome
exploiting the concept of origin

the demographics of a brand are often its most salient personality

characteristics - Batra et al, 1996, p. 84
We consider brand origin to be a demographic variable, and part of a brands
personality, in the sense that brands can be described in terms of their origins much
as a person may be identi!ed in terms of place of birth. - Thakor, 1996

THE CONCEPT OF ORIGIN

Origin is a very powerful concept:
consumers value the origin as an important signal
of product quality.

The concept can be seen from three di!erent perspectives :

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TIME-BASED ORIGIN
It is important for a company to have a birthday and communicate it
to the market.

Why is it so important?
Survival: birth means having a role in the history and surviving along that

history. This means the company is worth it and that it developed competences
and expertise. It shows the ability to change over time and adapt to the market.

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$<)&0+.%)-.<+=)

Source:http://theinspirationroom.com/daily/print/2009/12/coca_cola_christmas_truck.jpg

10

e.g.

TIME-BASED ORIGIN
How can a company show the origin in terms of time?

It can declare
it in some of
the visuals of
the brand.

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>&$%+OPA>0$#4AQRSJTSTRASDDSAQJ:UAVUDWA,:OTAQPJTA,JCWAIWUUARWIQAN9"LX=GY7.+92YIJJOY<%$(&Y5$2=K#1)

11

PLACE-BASED ORIGIN
Territory is a very important issue

Why do consumers value a territory?

Territory is the history of competences and network of subjects that
together are able to produce a certain product category of a certain
quality.
The territory transfers its entire essence to the product.

12

CULTURE-BASED ORIGIN
Origin means culture, that is, a set of values and beliefs that
characterizes a group of people.
Each culture has its own lifestyle that can be trasmited through the
consumption of its typical products.
Drinking cachcaa
makes consumers
feel the Brasilian
lifestyle.

Drinking Corona
reminds consumers
the Mexican way of
life.

Sensations go beyond the drink itself.

Source: http://ruydantas.com.br/media/uploads/images/cachacaTambaba_tropicalissima_.jpg https://ideasinspiringinnovation.!les.wordpress.com/
2010/02/corona-beer_mexico-4.jpg

13

ORIGIN-BASED POSITIONING
Do consumers value origins?
And if so how can a company leverage on this?
How can it build a positioning in the market?

Origins acquire value only through a clear positioning.

To be strong, positioning should be built on characteristics that are
di!erent from competitors and relevant for consumers.

14

AGENDA

! The Globalization Of F&B
! Leverage On Origins

! The Variety of Consumption Practices

! The Role of Origins in the Company Positioning
! The Go-To Market Decision
! The Value Proposition Management
! The Place Branding
15

TASTE
Going global and entering di"erent markets means
dealing with di"erences in terms of habits, culture, and tastes.
Taste is a very ambiguous concept.

What does taste mean?

Taste is more than a preference.

16

TASTE
Taste is a bundle of sensitivity, ability, and expertise that change the way
through which consumers approach the market.
!Taste can be educated
Therefore, for companies, it is important to understand
how consumers taste can be in!uenced and educated.
! Taste is rooted in certain cultural habits
Companies have to understand them
and !gure out what there is behind them.
17

CONSUMPTION PRACTICES
! Taste is related to consumption practices.
Consumption practices are activities that consumers put into place
to extract a value from a product or brand (see module 1, slide 57)
Companies should be able to distinguish between:
the common rooted
practices

and

practices implemented by
chance

In fact, only by adapting to the habits of the target market

can companies create value for their consumers.
18

e.g.

CONSUMPTION
PRACTICES

Breakfast Pasta:
SpaghettiN Eggs with Tomato
Paprika Sauce

Poland: Kawa Parzona

Ceviche peruana

Co"ee habits

source: http://pasta!ts.org/pasta-recipes/breakfastpasta/
http://www.budgettravel.com/slideshow/photos-a-ca"eine-addicts-guide-to-the-world,7970/#pic=47
http://1.bp.blogspot.com/-5lcz12eugZw/VB7r_lYa27I/AAAAAAAAAmY/bq1i2gckyro/s1600/ceviche%2Bperuano.jpg

19

CONSUMPTION PRACTICES
Consumption practices can be classi!ed into 3 big areas:

SENSEMAKING
Categorizing

INTEGRATING

SHARING

Assimilating

Communing

Producing

Socializing

Personalizing

Communicating

Associating
Evaluating
Appreciating

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CONSUMPTION PRACTICES
SENSEMAKING
Consumers use sense making to attempt to assign meaning to a product.
Preparing for consumption involves placing the product in a category
(categorizing), which brings up a number of cognitive and emotional
associations (associating). Then consumers evaluate and judge the
experience by comparing the content with certain norms and conventions
and with their previous experience. Last comes appreciating, both in terms
of type and intensity of their emotional response. Clearly sense making
activities are often done subconsciously.
Avocado is a fruit or a
vegetable?
How do consumers
categorize it?
Source: http://www.betrosbros.com.au/wp-content/uploads/2013/04/avo.jpeg

21

CONSUMPTION PRACTICES
INTEGRATING
It refers to processes that make the product a part of ones consumption
system and lifestyle. By repeating these processes, assimilating, consumers
lessen the cognitive and emotional distance between themselves and the
product, and gradually make the product part of their consumption systems.
The phase is followed by a more operative component called producing,
which refers to actual products use. This is when the consumer tries out his
or her competences in using the item such as preparing a meal.
Consumers are also used to ignore standard product use, and give the item
in question a unique, distinctive, and idiosyncratic meaning. This is called
personalization.
A big trend nowadays is integrating
new and many types of cereals
in the diet.
Source: http://www.tecnologia-ambiente.it/wp-content/uploads/2013/06/semi-ortaggi.jpg

22

CONSUMPTION PRACTICES
SHARING
Many consumption experiences, rather than taking place individually,
happen through interactions within social contexts of consumption, and
involve sharing practices regarding the product. One such practice,
communing, takes place when consumption is part of an interaction with
a social context, but here the product isnt central to the social experience.
Another practice is socializing, when the consumption experience is
deliberately done in conjunction with others, the social aspect being
essential to the experience. Last there are practices involving
communicating through the product, when the item in question is
intentionally used because of its communicative function within social
relationships, becoming an expression of social identity.
23

CONSUMPTION PRACTICES
SHARING

24

BeFood Interviews

Making Local Products / Rituals Global

Good products are like good music and art: Everlasting.
Niccol Branca
Owner
F.lli Branca Distillerie

25

AGENDA

! The Globalization of F&B
! Leverage on Origins
! The Variety of Consumption Practices

! The Role of Origins in the Company

Positioning
! The Go-To Market Decision
! The Value Proposition Management
! The Place Branding

26

ORIGIN
The real managerial decision that the company has to make regarding the
origin is what role should the origin play in the positioning of the
company, the product, or the brand in a certain market.
Positioning can be built on primary associations - that are directly
connected to the brand - and secondary associations - that are linked to
third parties that have a link to the brand.
Origin is a secondary association
and this entails that its value is not under the full control of the company
(e.g. a company that shares the same origin of another could a"ect it misbehaving in
some way)
27

ORIGIN IS A PoP OR PoD?

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It depends on companys competitors.
When the origin is shared among several companies, it becomes a PoP and
so it cannot be using as a di"erentiating charactestic for the brand
positioning. On the other hand, if the origin is something peculiar to a
certain company, it rapidly becomes a PoD and the company could exploit
it for building a strong positioning.
In light of the above, it is fundamental for companies to understand
whether origin can be de!ned as a PoP or PoD.
28

ORIGIN POSITIONING
Why origin is valuable?
It is a quality clue.
First of all, companies should understand the current value of the origins
for its target market, whether consumers associate value to a certain type
of origin and or if they associate the brand to that origin.
Once understood, companies have to identify which components of the
origin should be used to build the positioning? Time, territory, or culture?
A combination of them?
29

ORIGIN POSITIONING
Whichever the components, positioning should be communicated
through brand visuals (See module 2, slide 63)! those elements of the brand
that represent it visually
Brand visuals should be combined in a way to vehicle the brand essence.
All the visuals
(name, logo,
package)
should be
consistent with
the brand
positioning
Source: http://polinigroup.com/polini-uploads/tequila-torito-ritagliata.jpg http://greatcheese.com/pub/le-cambert-01297950449.jpg

30

e.g.

ORIGIN POSITIONING

Lindt condenses all the information related to the origin and the value of
the origin in its positioning and in its brand visuals.

Source:https://thechocolatebars.!les.wordpress.com/2013/10/lindt-logo.jpg

31

BeFood Interviews:

The Value of the Country in the Global Competition

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)

Guillermo Ariztia
Chile Pavilion Director
Expo Milano 2015

32

AGENDA

! The Globalization of F&B
! Leverage on Origins
! The Variety of Consumption Practices
! The Role of Origins in the Company Positioning

! The Go-To Market Decision

! The Value Proposition Management
! The Place Branding
33

DISTRIBUTION NETWORK
A big issue that companies which want to go global have to face is
distribution.
Companies have to take the Go-To Market decision, including:
- Distribution Network: The network of partners o"ering services. It has
both !nancial and competences implications.
- Distribution Channel: The path through which goods and services travel
from the producer to the consumer.
- Channel Design: The decision regarding how many steps there should be
between the producers and the end-user. It can result in Direct or Indirect
channels (retail managament).
34

DISTRIBUTION NETWORK
1. DIRECT CHANNEL: When no intermediaries are present. The products
go directly from the producer to the end-consumer. In this way the
producers has to bear all the investments alone, but they have full
control of the products route.
PRODUCER

ENDCONSUMER

2. INDIRECT CHANNELS: When intermediaries take the ownership of a

product and the responsibility for its sale and distribution. In this way
investments are shared among the partners, but the producers control
decreases.
PRODUCER

WHOLESALER

RETAILER

ENDCONSUMER
35

e.g.

DISTRIBUTION NETWORK
DIRECT CHANNEL

Source:http://thumbs.dreamstime.com/z/instant-noodles-supermarket-shelves-28390076.jpg

INDIRECT CHANNEL

36

DISTRIBUTION NETWORK
Since partners mean services, companies should decide whether they want
to internalize or externalize them.
One example of services is the assortment strategy (i.e. depth and width).
Based on it, distributors can be classi!ed into:
"! Specialized: focusing on selling a particular product category and
associated items
"! Generalist: o"ering several products categories (e.g. supermarket)

37

DISTRIBUTION NETWORK
For choosing which type of distribution to exploit, companies should
choose between competence and high image specialized and high
availability of the product.
On the other side, the criteria on which distributors base their decisions of
including or not in the assortment of certain products (Listing decisions)
are:
Financial
Image
Ability of building a new market
Consistency with their positioning
Competition
38

BeFood Interviews:

IL CAVALLANTE

Building an Assortment in Specialized Wine Retail

Assortment decisions are based for 60% on my taste.

Sergio Morpurgo
Owner
Il Cavallante srl

39

DISTRIBUTION NETWORK
In the Food&Beverage industry, distributors and producers are used to
have a good relationship based on reciprocal esteem and a shared
vision of how a good should be produced and sold.
We do interact directly with our producers, we know how they work and viceversa Eataly

40

AGENDA

! The Globalization of F&B
! Leverage on Origins
! The Variety of Consumption Practices
! The Role of Origins in the Company Positioning
! The Go-To Market Decision

! The Value Proposition Management

! The Place Branding
41

VALUE PROPOSITION STRATEGY

Going global, companies get in touch with di!erent markets
each of which has its own speci"city.

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It is a matter of both operational and strategic decisions.
Standardization !using the same value propostion in all markets.
Adaptation ! adapting some components or the entire value proposition
to the speci!city of each market.
COMPLETE
ADAPTATION

FULL
STANDARDIZATION
42

VALUE PROPOSITION STRATEGY

STANDARDIZATION
Advantage: Increasing E#cency ! companies can exploit
communication, production and commercial sinergies and do not have to
bear the cost of changing.
Disadvantage: E"ectiveness ! the company implicitly asks consumers to
adapt themselves to the speci!city of the company value proposition.
ADAPTATION
Advantage: Increasing E"ectiveness ! changing the o"er lets a
compnay to match itself easier to consumers needs.
Disadvantage: Losing E#cency ! changing components implies
!nancial and temporal costs.
43

ADAPTATION
Companies that decide to adapt can choose to modify all the
components of their value propositions, such as:

"!Product
"!Communication
"!Distribution strategy
"!Brand
Sometimes it is the speci!city of the market that imposes it on
companies to adapt certain components.

44

e.g.

ADAPTATION

PRODUCT
Ingredients

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A6<6@*

Source:http://farm1.static.$ickr.com/212/513520654_120581bdd9_o.jpg http://i.kinja-img.com/gawker-media/image/upload/s--Ls44lFFo--/
c_!t,$_progressive,q_80,w_636/vumi9v2adfhepdcndzhn.jpg

45

e.g.

ADAPTATION

PRODUCT
Occasion of Usage

Source:http://farm1.static.$ickr.com/212/513520654_120581bdd9_o.jp0g http://www.italgrob.it/public/BlogFoto/6062/Varie/HK-3D-cluster-8x15cl.jpg

46

e.g.

ADAPTATION

DISTRIBUTION STRATEGY: Many countries are di"erent in terms of

distribution system and format.
BRAND: Languages and cultures are di"erent from country to country.
Maybe the name has a di"erent meanings and changing the name can
make it more acceptable and appreciated.

Source:http://goodlogo.com/images/extended.info/o/ola/ola_good-humor-heartbrands.gif

47

e.g.

COMPARING
THE STRATEGIES

COMMUNICATION
KitKat decided to adapt the
communication campaign: although
the message remains the same Have
a break, the way in which it is given is
completely di"erent.

Lindt decided to keep the communication

campaign standard across the di"erent
countries . The issue is de!ning one
positioning and keep it consistent across the
di"erent markets.
48

BeFood Interviews:

Making Pasta A Global Product

It can be all over the world, but its name remains Past.

Giuseppe Morici
President of Barilla Europe

49

VALUE PROPOSITION STRATEGY

BC65)*$"#$(+(&4)40$9-6)5+)DC6@8?;^))
There is not a right or wrong answer.
It depends on the habits of the target market into which the companies
want to enter.
Each decision in terms of stardardization and adaptation should be
consistent with the companys objectives and strategy.

50

AGENDA

! The Globalization of F&B
! Leverage on Origins
! The Variety of Consumption Practices
! The Role of Origins in the Company Positioning
! The Go-To-Market Decision
! The Value Proposition Management

! The Place Branding

51

TERRITORY
A territory can be a component of the brand / product positioning.
A territory can be a quality clue.
A territory can be a secondary association.

16@*6*5?==953=E*F?*6*<=3;GD5*9@*6@;*3H*954?7H^))
Who is the target market of a territory?
Investors for building an economic engine,
Tourists for traveling and
Stakeholders such as the community for enhaning their homeplace.
A territory can be sold and promoted on the market like any other
products.
52

PLACE BRANDING
Like any other brand, a territory should be managed in terms of
positioning.
How can a territory build a positioning basing on its typical food and
beverage products?

53

PLACE POSITIONING
How can a territory be unique (PoDs)?
As with all other other brands, it should have characteristics that are
relevant, di!erent and favorable.
A territory should entail and communicate:
Heritage
All the intangible
attributes linked such as
history and reputation

Competence
A set of speci!c
competences and
know-how

54

PLACE POSITIONING
As with all other brands, a territory should have clear brand elements:
visual elements that distinguish the brand from competitors ones.
Brand elements should be carefully de!ned and communicated.

Source:http://www.newswire.ca/en/story/1106081/wine-country-ontario-wins-coveted-international-tourism-marketing-award
http://www.tourism.australia.com/documents/TNLA-Cape-Leveque_lge.jpg http://www.creativereview.co.uk/images/uploads/2012/04/bittany_en_0.jpg http://
www.creativereview.co.uk/images/uploads/2012/04/pays_de_la_loire_en1_0.jpg

55

LINK
Cola Cola adv
Alessi sauce
HelloFresh
Co"ee consumptions
Vizeat
Branca
Chile - Expo 2015
KitKat video 1
KitKat video 2 (youtube)
KitKat video 2 (vimeo)

Lindt video 1 (youtube)

Lindt video 1 (vimeo)
Lindt video 2
Barilla
Collio
Pinterest board

56