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Adding Value to Agricultural Products

Columnist: Scott Gerien
July, 2012 Issue
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Scott Gerien
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As a trademark lawyer, my daily business is about brand protection. While I don’t create brands (that’s a job for those imaginative marketing people), the legal concepts and philosophy underlying trademark protection require that I have a certain understanding of how products are branded and how this motivates consumer behavior. This is particularly intriguing in the area of agricultural products, so I thought some further discussion might be appropriate in this, our agribusiness issue.

Some basic Trademark 101: A trademark is any symbol (name, logo, package design) that tells a consumer that a product comes from a particular source. If a consumer is satisfied or dissatisfied with a product, that trademark acts a signal to that consumer to influence future buying decisions related to that product. Assuming the consumer is satisfied with the product, the trademark represents the consumer goodwill that attaches to the product. Trademark law is concerned with protecting this goodwill so the trademark owner receives the benefit of such goodwill, and so the consumer isn’t deceived by other producers that might try to misappropriate this goodwill by using a confusingly similar trademark.

The overwhelming majority of products sold in America are branded with a trademark. However, this isn’t the case with agricultural products. While most consumers wouldn’t consider purchasing a pair of running shoes that weren’t branded with Nike, Adidas, Reebok or some other well-known trademark, those same consumers wouldn’t think twice about going to the supermarket and buying lettuce or strawberries that are sold as commodities without any brand name.

On the one hand, this isn’t surprising, as many agricultural goods, such as produce, are sold fresh in bulk without any packaging. This is certainly more convenient for consumers and suggests a higher level of freshness than packaged produce. However, in recent years, the safety of the agricultural food supply has been called into question with outbreaks of salmonella and E. coli. When a consumer purchases a commodity product, there’s a much lower degree of accountability. If there’s a problem with an unbranded commodity product, or if the consumer is dissatisfied with it in some way, there’s no signal for the consumer to remember in order to reject the product in the future. There’s also no incentive for the producer to ensure the quality of an unbranded commodity product—since there’s no accountability, the product is essentially anonymous. As a result, the product is also usually sold at a lower price.

There are, however, numerous exceptions to the commodity standard in agriculture, and many here in the North Bay. Riddle me this: What North Bay dairy Clo-operative long ago recognized the value of a fanciful character mascot in selling milk and establishing brand recognition in the minds of consumers? Why, Clover Stornetta Farms, of course. While the ubiquitous image of Clo the cow on billboards throughout the North Bay is good branding, it also represents something else to consumers. Clo serves as a symbol of milk that’s locally produced by family farms pursuant to sustainable farming practices. While Clover milk will usually cost a bit more than milk produced as a commodity by larger agribusiness concerns from inside and outside California, the accountability and goodwill that attaches to the Clover brand will make this worth the extra cost to consumers [See “Cream of the Crop,” July 2012].

The growing trend of consumer interest in the origin and treatment of their foods, particularly agricultural products, is also supporting an increase in the use of certification marks by producers. While a trademark tells a consumer about the source of the product, a certification mark tells the consumer that some particular standard of production or growing, or geographic origin of the product, has been satisfied by the product. A certification mark is owned by a certifier that doesn’t produce the product being certified, but instead acts to objectively ensure the standards established by the certifier are being met by the producer.

For instance, there’s much consumer uncertainty as to what “organic” means when it’s attached to an agricultural product. In response to this, the U.S. Department of Agriculture established a special “USDA Organic” design certification mark that can be used by producers on the agricultural products they produce, provided the producers have submitted to the standards for the USDA Organic certification mark for the particular goods being produced.

Another example of an agricultural certification mark is “Demeter Certified Biodynamic.” The owner of this mark is a private, nonprofit association called Demeter USA, which certifies numerous agricultural products and verifies the growers use methods such as crop rotation, composting and homeopathic sprays to cultivate the long-term health of the soil. More consumers today are concerned with the impact that farming has on the environment, and a certification mark such as “Demeter Certified Biodynamic” informs them that the product is produced pursuant to biodynamic production standards. This adds value in the minds of consumers and the certification mark thereby lets the producer charge more to recoup the cost of the quality-oriented treatment and production of the agricultural goods.

With some agricultural products, there’s added value resulting from the fact that the goods emanate from a particular place. Napa Valley Vintners offers certification of wine and winery properties under the mark “Napa Green” for wineries located in Napa County that demonstrate sustainable winery practices that protect the environmental quality of the region. This certifies to consumers that the wine emanates from the appellation of Napa and also meets certain sustainability standards.

There are winds of change in consumer expectations related to information as to the source and qualities of the agricultural products they buy. Consumers are turning away from commodity agricultural products and are willing to pay more for products that inform them as to the identity and accountability of the producer, as well as the product quality and characteristics. Trademarks and certification marks provide consumers with such necessary information and provide producers with a valuable marketing tool to increase the value of their products.


 

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