Second Look: Why don't we brand Canadian pork?

Sunday, April 5, 2009

Many challenges would face a Canadian branding campaign, including getting a commitment by the entire value chain. But why not keep value-added production and processing in Canada?

by MARY LOU McCUTCHEON

During a recent conversation about the U.S. mandatory country-of-origin labelling (MCOOL), a colleague suggested that it was a marketing program. I immediately suggested that MCOOL is not an industry marketing program designed to build market share, but rather a consumer labelling program put in place through legislation.

That conversation got me thinking that an aggressive branding campaign for Canadian pork aimed at American consumers might be an appropriate response to the legislation.

When I first started looking into the COOL legislation many years ago (it has been on the books since 2002), I contacted some U.S. colleagues to evaluate what the legislation might mean for Canadian producers. They thought that there might even be some advantages for Canada since American consumers consider a few products – such as Canadian bacon – to be superior. Of course, a couple of calls to the United States only provide anecdotal evidence. But when you combine that response with the current MCOOL situation, it begins to have merit.

U.S. Agriculture Secretary Tom Vilsack recently called on processors voluntarily to provide more label information and label more products than the MCOOL legislation requires. Compliance with this voluntary request will potentially limit access to the United States for pigs of any age from Canada. Vilsack's comments mean more uncertainty for exporters of weaner pigs and live market hogs.

Right back to 2002, the impact of MCOOL on Canada has been uncertain, creating a roller-coaster ride for producers as they try to develop appropriate business responses. First, producers had to deal with MCOOL legislation which passed with the Farm Bill during the first half of 2008. Then came the regulations announced by the U.S.

agriculture department last August, next the final regulations just published in January,  then the rumours and rumblings after the recent inauguration which cast a broad net on all regulations passed within the last few weeks of the Bush administration, and now Vilsack's request. In an industry with a production cycle of many months, it is impossible to adjust to market dynamics which change that frequently.

While each farm or processing business is considering its options on an individual basis, I wonder if we shouldn't be looking at this as an entire industry. The biggest issues with MCOOL relate to the export of live animals since exports of Canadian pork products will require a label that clearly states "Product of Canada." Labels for pork born or raised in Canada and processed in a U.S. plant are far more complex.

The first response to the idea of a Canadian Pork brand is likely to be that we don't have the processing capacity to handle our current production. Or that there is a competitive advantage to finishing Canadian hogs in the U.S. Midwest rather than Canada.

These are both good reasons for Canada to do what we can to maintain an open border and an integrated North American industry, but never before has this market been so uncertain. I admit that many challenges would face a Canadian branding campaign, including getting a commitment by the entire value chain. But why not keep the value-added production and processing in Canada?

Think about products that have succeeded on their good name and high product standards: German beer, New Zealand lamb, Belgian chocolate, Swiss cheese. So why not Canadian pork? BP

Mary Lou McCutcheon is a strategic consultant with Issues and Insights in Guelph.