Brand-led agricultural growth is needed – Companies

Agriculture plays an important role in the development of an agrarian country like Pakistan. The sector contributes more than 37.44 percent of total employment and more than 19% of the GDP of the national economy. More than 63% of Pakistan’s population is rural, earning at least part of their income from agriculture or its sub-sectors. Since most of them are small farmers, any increase in the value of the basic products they produce can help reduce the level of rural poverty in the country.

One hitherto ignored way of increasing the value of commodities is by branding them to create additional consumer demand and give producers leverage in negotiations with buyers. This also allows producers, whether they are individual farmers, companies or countries, to reach a wider audience and make the most of selling their products under a distinctive brand.

Several studies suggest that consumers are influenced 25% by price and packaging and 25% by communication and promotions, while a product’s quality, positioning, availability and origin have an impact. 12.5% ​​in consumers. That means consumers are more influenced by branding and marketing than by product quality.

Market players say that lack of awareness on the part of producers, a certain mentality of consumers, escalating costs and government apathy towards creating an enabling environment are obstacles in the ways of promoting brand culture. , particularly in the agricultural sector.

Based on estimates, Pakistan stands to earn at least $100 million per year more compared to the current volume of agricultural product exports if the shipments are shipped as branded products.

“The lack of awareness on the part of the producers and/or sellers about the positive impact of the brand on sales is more to blame than any other factor for the absence of this important marketing tool in the country,” says Shehzad Ali Malik, CEO of Guard Agricultural. Research and Services.

“There was no such thing as a produce brand when we entered the market with our rice brand about three decades ago. Merchandise used to be sold loose back then. But we challenged consumers’ mindsets about packaged goods and they now claim a significant share of the local market.”

However, building a brand requires a constant investment of time and money. Many producers lose patience and sell their products without any brand at the expense of their premium.

Ahmad Jawad of the Pakistan Business Forum argues that a small expenditure on attractive packaging to enhance product presentation can help earn a premium price for the same quantity of a product because jo dikhta hai woh bikta hai (what you see sells) .

Highlighting the growing importance of packaging, it quotes Statista, a market data statistics portal, as stating that the global agricultural packaging market is expected to cross the $5 billion mark by the end of 2023. It assesses that Pakistan can earn at least 100 million dollars per year more against the current volume of export of agricultural products if the shipments are sent as branded products.

“But branding is not just a name or symbol where you spend a small amount to design a logo and put on a label to differentiate one’s products from others,” says Mr. Malik. “Rather, it is more about achieving and maintaining high standards in production and processing and ensuring product consistency. Only then can the seller claim a higher price,” he explains.

“It takes years and a valuable financial investment to establish a brand. But most people prefer to make easy money by selling individual products instead of the hard work in terms of time and money required to build their brand.

The impression among consumers that branded products cost more is another factor that discourages producers from choosing the brand. Consumers are mostly unwilling to pay the premium price for the guaranteed quality of a product and that is a dilemma for producers.

“Branded products cost more because advertising campaigns and printed packaging have their price, and then there is the margin we have to pay to distributors because self-distribution is almost impossible,” says Mr. Malik. “But consumers have to be convinced that the benefits they get from paying the premium are worth it, that is, a guaranteed quality and quantity of the product and all the other established attributes. A brand will do anything to save its reputation, while ordinary producers/sellers can give in on these fronts because they have nothing to lose in the trade.”

Unlike the local market, cost is not a factor for exports, says Jawad. “The product cost of an export shipment cannot be more than 45% and the rest will be logistics (maritime or air), packaging costs and labor. Attractive packaging, such as a 10kg pack, costs no more than a dollar and can be easily adjusted.”

National branding is the first and inevitable step before reaching international consumers, says Malik, complaining that there is no official support available to tap global markets unlike in neighboring India, where the government has set up a $100,000 fund. crores to provide technical, marketing and branding support. support for food micro-enterprises to modernize their production techniques and brand their products.

New Delhi is also launching the Brand India Campaign to boost exports of services and products in new markets, it says.

He suggests the government should restart the Ayub-era export bonus coupon scheme as a way to encourage branded exporters. Under the plan, exporters can be allowed to import raw materials and machinery at zero duty for an amount equal to their export earnings. He argues that developing a brand also means branding a region and a country.

Since the financial status of growers always plays an important role in branding, some believe that the government should offer easy loans to local growers and farmers that allow them to focus financially on marketing. “The growers, most of them small owners, are financially weak people who cannot afford to allocate funds for brand development. The government should incentivize them by offering low-markup, if not interest-free, loans on favorable terms,” demands Aamer Hayat Bhandara, a progressive farmer.

Other areas where the government should, and could, play a proactive role include creating a supportive regulatory environment, guarding against foreign competition and domestic overproduction, working to award geographical indicators, and introducing classification and certification systems for quality as an aid to those who want to establish their brands, he says.

Published in Dawn, The Business and Finance Weekly, August 8, 2022

About William G.

Check Also

From Plows to Drones India’s Agricultural Journey and the Way Ahead

While India is eager to move forward in terms of technological development, it is essential …