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Brussels Briefing 53: Winston Stona '' Jamaica Jerk Branding - Concept Note ''

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The Brussels Policy Briefing n. 53 on ”The next generation of farmers: successes and new opportunities” took place on 20th November 2018 (ACP Secretariat). It was co-organised by CTA, the European Commission (DG Devco and DG Agri), the ACP Secretariat and CONCORD.

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Brussels Briefing 53: Winston Stona '' Jamaica Jerk Branding - Concept Note ''

  1. 1. Jamaica Jerk branding – Concept note Creating a branding strategy for an iconic Jamaican product © Windward Strategic Ltd www.windwardcommodities.com Page 1 1. Overview This document outlines a strategic approach to branding Jamaica Jerk that builds on the Geographical Indicator recently agreed in order to drive consumer awareness, reinforce authenticity, increase processing volumes and margins for Jamaica producers and drive wider social impacts through sustainable sourcing in Jamaica. The key issue that this approach looks to address is that there is a very large gap between creating a new Geographical Indicator (GI) and creating commercial value from it. While consumer awareness of Jamaica Jerk and existing local brands is high, leveraging a new GI requires significant investment, commercial partnerships and effective branding in export markets. Windward Commodities has wide experience in creating this sort of value from intellectual property in commodity categories across Africa and the Caribbean. It’s regional experience includes the establishment of Plantation Reserve sugar, a joint venture with the government of Barbados that has introduced branded sugar into over 2,000 stores across Europe and the Caribbean. Plantation Reserve will deliver just over $2m to the Barbados sugar industry above the world price in 2014. The following approach has been developed following regional meetings with the World Intellectual Property Organisation as part of Windward’s wider work across the Caribbean. This draft document is for discussion purposes only and is one of a number of regional projects that Windward is currently looking at. 2. Rationale Agricultural commodities contribute to over half of total employment and more than a quarter of GDP in developing countries, where over 1 billion farmers derive at least part of their income from their production. Most of these farmers are smallholders and therefore adding value to basic commodities has enormous potential to reduce poverty. According to the Jamaican Ministry of Agriculture, 6% of GDP is derived from agriculture; whilst over 17% of the Jamaican workforce is engaged in the sector and the jerk industry based on exports has a significant potential impact on the agricultural sector and particularly on pimento and chilli production. Effective communication and commercial implementation of GI’s with partners creates consumer and therefore business demand that gives producers and partners leverage with major manufacturers and retailers, drives security of supply, grows margins and mitigates long term pricing volatility. The challenge is that it also requires marketing expertise, brand investment, effective category management and strong customer relationships. Windward Commodities would look to provide this expertise in conjunction with the Jamaica Jerk Association and its members. 3. Objectives Windward Commodities will look to create a brand for Jamaica Jerk that: • Builds on existing initiatives: Create a brand that supports the on-going initiatives and planning of the Jerk Association to establish a GI, in additional to any sector-wide strategies related to Jerk and the required ingredients. • Increase commercial volumes: Generate higher volumes and associated margins for Jerk association members
  2. 2. Jamaica Jerk branding – Concept note Creating a branding strategy for an iconic Jamaican product © Windward Strategic Ltd www.windwardcommodities.com Page 2 and their suppliers through increased penetration of export markets and direct sales to foreign manufacturers and retailers who wish to use the GI. • Establish leverage: Provide a clear point of difference for end consumers and therefore major manufacturing and retail customers in order to secure access for the GI. • Enforce the new GI: Build capacity where possible so that the Jerk Association has sufficient knowledge and access to police the GI. • Reinforce sustainability: Create a direct, quantifiable impact on increased incomes and poverty reduction that in turn creates strong consumer and media interest in authentic Jerk . 4. Approach Windward Commodities builds sustainable, profitable brands based on principles used by Fast Moving Consumer Goods companies. These have been used to successfully establish premium brands across a wide range of primary products including Supima cotton, V-Power gasoline, Plantation Reserve sugar, Pink Lady apples and Chiquita bananas. This approach takes consumers as the starting point and builds brands that give producers leverage when dealing with major manufacturers and retailers in traditional commodity supply chains. In all cases, the end consumer is the focus of investment as a means of adding intellectual, rather than physical, value to commodity products. Windward Commodities uses its relationships with global advertising groups, sustainability bodies, retailers and manufacturers in order to mitigate the up-front risk of branding through a focused approach to New Product Development. 5. Jamaica Jerk The case of Jamaica Jerk serves to illustrate both the process and potential impact of commodity branding in the Caribbean. The approach below is an example only for discussion with the Jamaica Intellectual Property Office (JIPO), the Jamaica Jerk Manufacturers Association and the World Intellectual Property Organisation (WIPO). (a) Market opportunity Unlike most commodities that Windward brands, Jamaica Jerk already has very significant consumer recognition both in Jamaica and in US and UK export markets. This has helped to increase total sales from Jamaican producers to US$14.5m in both domestic and export markets, higher than equivalent revenues derived from Blue Mountain coffee. However, the largest single sector of the export market, particularly in the US, is taken by external brands such as McCormick (the largest spice company in the world) as well as smaller manufacturers who sell ‘Jamaican Jerk’ products (illustrated here) without any Jamaican ingredients, or production. With the introduction of a formal Geographic Indicator for ‘Jamaica Jerk’ by Jamaica and an associated brand, this represents an opportunity to capture significant value onshore in Jamaica for the Jerk Manufacturers association, which includes large companies including Grace Kennedy. It also provides an opportunity to create renewed interest in purchasing ‘authentic’ Jerk products for both the tourist and export markets.
  3. 3. Jamaica Jerk branding – Concept note Creating a branding strategy for an iconic Jamaican product © Windward Strategic Ltd www.windwardcommodities.com Page 3 (b) Industry implications Creating additional volumes and value for Jamaica Jerk also represents an opportunity to make a fundamental impact on commodity input suppliers in Jamaica. It demonstrates the opportunity to recapture production and value in Jamaica, whilst at the same time requiring a range of different agricultural ingredients and therefore presenting a strong case for developmental impact amongst farmers supplying to processors. Jerk seasoning and paste primarily relies on two ingredients: allspice (widely known as pimento in Jamaica and making up 85% of the sauce) and scotch bonnet peppers. Other less fundamental ingredients include scallions, cloves, cinnamon, nutmeg, thyme, garlic and salt. However, as part of the Geographical Indicator (GI) discussions that have already taken place, it has been agreed that “Jamaica Jerk’ cannot be produced with less than 75% Jamaican ingredients, processed in Jamaica. For the purposes of illustration a simplified Jamaica Jerk value chain is located below. Jamaica was the top global exporter of allspice throughout the 1990s, though has now lost this market position to Mexico, which exported 408 MTs in 2010, as opposed to Jamaica’s 318 MT. This is largely due to Mexico’s proximity to the US, lower costs and ability to produce at great scale. Jamaica however is still perceived as producing premium grade allspice, which is reflected in its higher price per MT (almost double that of Mexico). Guatemala and Honduras now produce allspice and scotch bonnet peppers on a commercial basis, with a 30% market share. These geographic changes in production, coupled with the absence of protected intellectual property (specifically Geographical Indicators) has led to a string of unauthentic Jamaica Jerk sauces being sold in retail outlets. There are over 200,000 workers engaged in Jamaican agriculture with a total of 8% production being dedicated to jerk ingredients. Approximately 16,000 Jamaican farmers directly generate their income from providing ingredients for jerk sauce, with close to 3,000 of these being women. (c) Geographical Indicators The issue with creating Geographical Indicators is that, unless executed effectively and supported by a comprehensive supply chain, legal and communications strategy, it can have no additional value to producers or farmers. For every well- established GI with high value (well known examples include Champagne and Darjeeling) there are thousands that have little additional value. Windward is looking to support the Jamaican Jerk Association to develop and execute a GI and any other associated IP required (e.g. trademarks) with a focus on turning a mark into a valuable commercial property. This strategy would be developed, along with an implementation plan, with technical input from WIPO, JIPO and the Jamaican Jerk Association. For the initial pilot phase of this, we would work to create incremental sales representing 5% of the current market. This would look to create an ingredient brand and associated campaign that is applicable both to external manufacturers and existing genuine Jamaican brands. (d) Branding illustration Branding would be based on a small, but iconic ingredient brand (an example illustrated here). As with all ingredient branding, this needs to be simple enough to Farm Suppliers (Allspice, scotch bonnet, peppers, scallions etc.)! Retailers ! Jerk Processors ! (e.g. Grace Kennedy & Walkerswood) ! Logistics & Distribution!
  4. 4. Jamaica Jerk branding – Concept note Creating a branding strategy for an iconic Jamaican product © Windward Strategic Ltd www.windwardcommodities.com Page 4 stand out on other brands packaging but not so simple that it fails to communicate the key messages (in this case, Jamaica and authenticity). The three options above are for illustration only and simply serve to show a range of potential possible executions that could be developed for Jamaica Jerk. (e) Branding application Key to an effective GI strategy for Jamaica Jerk is the clear targeting of the brand to distinct groups in order to maximise its value to the industry: • Foreign brands - rather than threaten large US companies with legal action, Windward would look to develop a programme with the Jerk Association that allows us to approach manufacturers in the US and EU and introduce the brand to them with clear public relations, corporate and CSR benefits if they use the logo on one of their product portfolio with sourcing from Jamaica. While we most would not be interested, we believe that there is enough potential participation to create incremental volumes of around 100,000 cases per annum (just over 15% of the total volume) with an additional value for the industry of around US$ 2m per annum. • Jamaican brands - would be given the opportunity to benefit from investment in a generic “Make it Jamaican” message that would look to drive both domestic tourist sales of existing brands and reinforce authenticity credentials in key export G ENUIN E JAM A I C A J ERK G ENUIN E JAM A I C A J ERK G ENUIN E JAM A I C A J ERK the ORIGINAL JAMAICA JERK the ORIGINAL JAMAICA JERK
  5. 5. Jamaica Jerk branding – Concept note Creating a branding strategy for an iconic Jamaican product © Windward Strategic Ltd www.windwardcommodities.com Page 5 markets including the UK and EU. Given the expense involved in marketing to export markets, the focus would be on seeding the GI and branding in a tourism environment with a direct promotional link to repurchasing when back at home as a means of creating additional retail sales for producers and seeding the GI to potential future consumers in their home US and EU markets. This has the potential to create incremental volumes of 50,000 cases per annum (7% of total current volume) with an added value to producers of at least US$1m each year. This authenticity would also support existing Jerk brands in competition with established spice categories (e.g. Chilli sauce) and marinade and rub equivalents from other origins. Brands would be given the option of a range of applications from the small logo by itself to a larger ‘Make it Jamaican’ stamp with marketing and social media support. Example for illustration only below 6. Business model Windward has offices in Barbados and the UK and acts as a social enterprise. This means that everything we do has a social impact and benefits producers in the countries in which we operate. As such, we are supported by institutions including the Shell Foundation (the charitable arm of Shell Oil) and the Common Fund for Commodities (a UN organisation). We operate in three main ways: (a) On a ‘gain-share’ model; Where producers have limited financial resources or do not want to take the risk of branding we invest our own funds up-front to create a brand. This typically ranges from US$250k to US$500k. If the brand does not generate a commercial benefit to producers we do not get a return on this investment. If the brand succeeds, we take a fee based on a percentage of the additional value generated. So if a producer in Africa was selling sugar for US$1,000 per tonne before branding and was able to sell it for US$1,500 per tonne as a branded product, we would take a percentage of the US$500 per tonne of added value generated. This means that we take on the up- front risk and make a return only if the brand is commercially successful. (b) On a consultancy basis Where producers are willing to take the up-front financial risk we are paid for the time we spend in supporting them to create and implement brands. (c) As an investor We invest to take a shareholding in the producer (e.g. in Barbados we established a joint venture with the government there for branding Barbados sugar).

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