Collaborative relationships and branding policies: successful strategies for small size farms

Extended Abstract by Antonella P. Vastola The demand for food products appears to be polarizing towards two categories of goods: safety-guaranteed, standardized products, sold at very convenient prices; and quality goods, that consumers are willing to buy at a premium price. In this environment, product differentiation and branding become crucial to allow agro-food producers to adjust successfully their supply to changing consumer needs. Individual farmers, however, cannot implement, all by themselves, effective brand policies for standardized or quality goods (except maybe for niche brands). Effective forms of coordination among producers, on the one hand, and between producers and processors and distributors, on the other hand, emerge therefore as a necessary condition to create and manage collective brands enabling product differentiation and the satisfaction of quality and safety assurances requested by consumers, through chain cooperation agreements on traceability, food control systems, application of ISO norms, etc.. If it is possible, collective brand should be managed as a firm brand by a producer association. This solution, that has already been successfully applied, is able to exalt decisional autonomy of agricultural producers, putting them on an equal foot with large industrial firms, and to maximize producer’s revenues. When horizontal coordination is difficult or unstable and products do not lend themselves to differentiation, vertical coordination between producers and distributors, aimed to concentrate supply and to decrease logistic costs, may be more effective. In this case, the vertical coordination organization would develop its own brand, that would be put beside the brand of firms participating in the organization; the brand of the vertical organization should enhance the perceived value of firm brands, guaranteeing: (i) that the structure of the production chain has been agreed on and therefore it is the result of the cooperation among all agents; (ii) the distinctiveness of the product, coming from the features of the production process and inputs; (iii) the constancy of quality over space and time. The aim of this paper is: (i) to review the relevant theoretical literature, in order to identify the foundations on which it is possible to build up a collaborative relation among the agents operating in the agro-food system, able to manage effectively and efficiently a collective brand; (ii) to analyze three case studies of brand policies developed by producers associations and vertical coordination organizations in Italy.