Why Farming Out Branding Is A Good Idea
If you go back to the 1960s and 1970s, supermarket own label brands were almost universally the equivalent of today’s value brands and the Tesco Delamare and Golden Ring brands were seen as relatively poor quality but very low cost. A reflection of the Jack Cohen “pile it high sell it cheap” ethos.
Since then, Tesco have led the way in revolutionising and differentiating own label branding, segmenting by price and quality into the Everyday Value, Tesco own brand and Finest ranges, adding healthy variants such as Tesco Healthy Living and Tesco Goodness, they have even played with celebrity brands running a Ken Hom range of Chinese chilled meals. With around 50% of Tesco sales coming from well over 10,000 own label products, brand strategy from the world’s 4th largest retailer has historically been a real strength.
Then in March of this year, as part of its strategy to take on discount brands such as Aldi and Lidl, Tesco launched a new range of farm brands with names like Redmere Farms and Boswell Farms offering “great quality fresh food and outstanding value.” What could possibly go wrong? But the decision to use fictitious farm names to provide products sourced from a number of countries at a time when Tesco was also claiming to be supporting British farming attracted immediate derision on social media. And the National Farmers’ Union (NFU) questioned the use of “fake” farms with British sounding names given how many real ones there were. Tesco responded by saying that some of the names such as Nightingale and Rosedene had been operating farms and were selected in partnership with its suppliers.
Since March the clamour against Tesco has grown, culminating in the NFU issuing a formal complaint to trading standards this week about the fake British brands. At the same time, Aldi have wrong footed Tesco by saying it will only source from Britain for its competitor “fake” farm brands. This leaves Tesco with the choice, moving forward, to either rebrand or change its buying strategy to presumably more expensive local sourcing.
Is there is a lesson to be learned from this? At face value the strategy of mixing UK and international sourcing to keep prices competitive, while reassuring customers of quality with British sounding brand names, might seem a clever squaring of the oxymoron. But is it entirely honest? At Grain, our guess is Tesco did not involve a third party agency with this brand strategy. If they had, that agency would have pointed out that brand attributes start with trust. OK, we have the benefit of hindsight, but if you can’t trust a brand to be what is essentially its core proposition, then trust is lost. And you might just end up with Trading Standards breathing down your neck.
Our recommendation is if you want to develop a farm brand, then farm out your brand strategy!