GIs: market and players' strategies in the European Union

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GIs: market and players’ strategies in the European Union

Jean-Louis Rastoin, . Institut Européen de la Méditerranée

To cite this version:

Jean-Louis Rastoin, . Institut Européen de la Méditerranée. GIs: market and players’ strategies in the European Union. 3. CAL/MED Worshop Mediterranean Products in a Global Market Place, Apr 2007, Barcelone, Spain. 32 p. �hal-02815804�

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GIs: Market Potential

& Players

’

_’

Strategies

_Strategies

in the EU

Jean

-

Louis Rastoin

Montpellier

Montpellier SupAgroSupAgro / UMR / UMR MoisaMoisa rastoin@supagro.inra.fr

rastoin@supagro.inra.fr

Cal-Med Consortium Workshop III

Mediterranean Products in a Global Market Place

European Mediterranean Institute

Barcelona

(3)

Outline

Research question:

What strategy based on the GIs

Market in the EU ?

3 key points:

--

The

“

Food Labeling

”

--

Food Market Segmentation

_{Food Market Segmentation}

(4)

•

(5)

(6)

Registered GIs in the UE in 2006

Fruits, vegetables and cereals 162 22,8%

Cheeses 154 21,6%

Fresh meat and lights 100 14,0%

Oils and fats 94 13,2%

Meat-based products 79 11,1%

Mineral waters 31 4,4%

Other products of animal origin ₂₃ _3,2% Bread, pastry, cakes 18 2,5% Other Annex products 18 2,5%

Beers 18 2,5%

Fish, molluscs and crustaceans 9 1,3%

Essential oils 3 0,4%

Natural gums and resins 2 0,3%

Hay 1 0,1%

Total PDO + PGI 712 100,0%

Total PDO 414 58,1%

Total PGI 298 41,9%

So urce : EU-DGA RD, A griculture in the EU, Statistical and Eco no mic Info rmatio n 2006, B ruxelles, 2007 Total PDO+PGI

(7)

EU List of Quality Wines Produced in

Specified Regions (QWPSR), 2007

Country / GI Number Share

Slovenia * 540 29% France 472 25% Italy 374 20% Spain 103 6% Romania * 52 3% Bulgaria 51 3% Portugal 49 3% Slovakia 47 3% Greece 43 2% S/Total, 9 countries 1 731 93% Other 8 countries 129 7% Total UE 1 860 100%

Brasil 1 Vale dos Vinhedos

USA 1 Napa Valley

* Without Official registration

Source : EU - List of quality wines produced in specified regions, 22/03/2007 - (Published pursuant to Article54 (4) of Council Regulation (EC) No 1493/1999)

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EU Production of quality wines (QWPSR),

2005

2002-2005 Change Total (M.hl) QWPSR (M.hl) QWPSR share QWPSR 1 France 51 635 27 907 54% 6% 2 Italy 48 882 15 000 31% 20% 3 Spain 38 031 12 860 34% 13% 8 Germany 12 469 9 514 76% 11% 11 Portugal 6 816 3 287 48% -21% 18 Austria 2 500 2 221 89% 10% 31 Czech Republic 532 470 88% 97% 13 Greece 4 226 401 9% 19% EU-25 169 821 73 068 43% 11%

Sources: FAOSTAT , 01 April 2007 and EUROSTAT, 15 April 2007

2005 Countries World rank (Total prod.)

(9)

The rise of EU PDO

-

PGI registration number

Number of PDO + PGI 2000 2006 Change Other Annex I products (spices) 8 18 125% Bread, pastry, cakes 10 18 80% Fish, molluscs and crustaceans 5 9 80%

Essential oils 2 3 50%

Meat-based products 54 79 46%

Oils and fats 65 94 45%

Fruits, vegetables and cereals 117 162 38% Other products of animal origin

(eggs, honey, etc.) 17 23 35%

Beers 14 18 29%

Fresh meat and lights 82 100 22%

Cheeses 142 154 8%

Mineral waters 31 31 0%

Natural gums and resins 2 2 0%

Hay 1 1 0%

Total PDO + PGI 550 712 29%

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Distribution of GIs by EU countries, 2006

Countries / Products Animal origin Vegetal origin Bever ages All products PDO % Total Italia 63 92 0 155 68% France 103 44 0 147 47% España 44 53 0 97 58% Portugal 68 25 0 93 58% Elláda 22 62 0 84 73% Deutschland 19 7 43 69 54% UK 22 4 3 29 45% Österreich 8 4 0 12 67% Total EU 25 365 298 49 712 58% Med countries 300 276 0 576 60% Med/Total 82% 93% 0% 81%

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2.

2. Food Market

_{Food Market}

Segmentation

(12)

Segmentation: The 3 Food Markets

INNOVATIVE MARKET Segment : Health Product : « Nutraceutics » Value : Technological advance NICHE MARKET Segment : High quality Product : « authentic » Value : Place of Origin,

organoleptic & cultural attributes MASS MARKET

Segment : day-to-day Product : basic, safe

(13)

French Food Retail Market

Segmentation & Trends

-

2004

Segment

Retail

sales

(€ Bil.)

Market

share

Annual

average

growth rate

for the last 10

years

Mass Market

104 79%

0 -1 %

Innovative Market

6 5%

15-20 %

"Quality Label" Market

21 16%

5-10 %

Total

131 100%

1-2 %

(14)

Quality labeling as a driver for economic

development (France, 2004)

-

1

Products Quality labels (number) Farmers (number) (€ Bil.) %

Wine and brandies 467 49 000 8,6 55%

Other PDO 74 120 000 1,7 11% Total PDO 541 169 000 10,3 66% Red Label 348 1,4 9% PCC 208 2,8 18% Organic food 1 11 000 1,2 8% Total 1 098 180 000 15,7 100%

Total agri-food firms 6 000

Source : Agreste, Enquête 2004 sur les produits agroalimentaires sous SOIQO

(15)

Quality labeling as a driver for economic

development, 2004 (France)

-

2

2004 - France

Products with quality and place of origin labels

(PDO, RL, PCC) Total Mean Quality label (number) Average Price (€/kg) Meat 2 772 7 408 3,36 Cheese 1 652 27 59 8,04 Meat preparations 644 17 37 14,44

Fruits, vegetables & cereal 531 5 107

Other products 207 7 29

Butter and creams 73 24 3 3,95

Eggs (price/unit) 45 7 6 0,16

Total 5 924 9 649

So urce : Agreste, Enquête 2004 sur les pro duits agro alimentaires so us SOIQO

(16)

The EU Market for GIs Products (excl. Wine),

2004

Countries

€ Bil.

Share

Italy

3,8

30%

France

2,4

19%

Spain

1,4

11%

Portugal

0,3

2%

Greece

0,3

2%

5 Med countries

8,2

64%

EU - 25

12,7

100%

PDO share in total food consumption

Med countries

2,3%

Other EU countries

1,1%

Total food consumption EU-25 (€ bil.)

776

(17)

Economic Size of « Terroir » Private

Labels of Large retailers– France

-NA

NA

100 M

€

305 M

€

Sales

(2002)

140

250

180

300

300 Items

Items

(2003)

Patrimoine

Gourmand

(Cora)

Savoir des

Saveurs

(

Syst

è

me

U)

Nos

R

é

gions

ont

du Talent

(

Leclerc

)

Reflets

de

France

(Carrefour)

Source: Linéaires N° 178, Février 2003

TM (at INPI) with “Terroir” in France: more

than 1000 in 2000

(18)

3.

3. Suppliers in the EU

_{Suppliers in the EU}

market :

strategic analysis &

performances

(19)

The place of the GIs in firm

strategies : Theoretical basis

Individual strategies : RBV

(Barney,

Wernerfelt

,

Arr

è

gle

et

Quellin

)

Collective strategies

:

«

agglomerated

»

or

«

federative

»

strategies (

Astley

&

Fombrun

, 1983,

Bresser

&

Harl

, 1986) = competing

firmes

coming closer on common

objectives on a territorial basis

(20)

The

“

_“

Terroir

_Terroir

”

_”

Effect

_Effect

Several definition (agronomists,

economists, managers, sociologists,

anthropologists, geographers,

historians,

…

)

«

Local products based on a strong

territorial identity and reputation, and/or

typical products based on specific

modes of production and whose quality,

reputation or any other characteristics

are attributable essentially to their

geographic origin

»

((SylvanderSylvander, EU Dolphins project, final , EU Dolphins project, final report, 2004)

(21)

“

Terroir

”

as an individual strategy support:

Resources, competencies,

capabilities

_capabilities

Specific assets -Tangible -Intangible -Know-how -Creativity -Relationship (social capital) -Territory -History -Brand -Networks •Vertical •Horizontal Knowledge -Technology -Marketing -Management -Finance R C

Basic

Distinctive

Performance Capabilities Market

(22)

“

Terroir

_Terroir

”

in

SMEs

Strategic and

Governance Models: an empirical

survey

Governance Structure 400 SMEs (Languedoc-Roussillon) _{Patrimonial /}

Independent Entrepreneurial / Open Stokholder’s equity Managerial / Financial Market access Sub-contracting - - - ( +/- ) + + +(9%) Basic Geographic closeness + + + (25%) ( +/- ) - Sub-contracting - ( +/- ) + + + Geographic closeness + + +(38%) ( +/- ) - Stra teg ies Differentiation "terroir" Focalization - - - + + + (28%) ( +/- ) +: Governance/Strategy adequacy -: Governance/Strategy conflict

Source: Couderc J.P., Falque A., Rastoin J.L., Remaud H., 2002, Configurations stratégiques de la petite entreprise agroalimentaire, XIème conference de l’AIMS, Paris, 5-7 juin

(23)

SMEs

Brands and Performances in

Languedoc Roussillon Region (1998)

Source : Aurier P., Couderc J.P., (2000), DADP, Inra, Montpellier

Label

AV/Employee

_(K.€)

AV/Sales

_(%)

Terroir (Brand or PDO/PGI)

133

49 Owner’s Name Brand

50

37 Other 51

27

(24)

Milk Price Differentiation, 2004, France 28 29 30 31 32 33 34 35 36 37 38

Label PDO PCC Other QS Without QS

Source: Desbois and Nefussi, 2007

119

115

102 ₁₀₁

100 Index Sample : 670 Dairy farms

representing 37 400 (RICA/FADN)

(25)

Dairy Farms EBITBA, France, 2004 0 5 10 15 20 25 30 35

Label PDO PCC Other QS Without QS

Source : Desbois et Nefussi, 2007

132

114

92 95 100

(26)

Dairy Farm, Return on investment, France 2004 24 25 26 27 28 29 30 31 32 33

PDO PCC Other QS Without QS

(27)

(28)

Source : adapted from Sylvander B, (2004), Final Report, Dolphins Project, EU-FPR 5th, Inra-Urequa, Le Mans, p. 26 Collective Strategies

Parameters / Rationales

Individual strategies

(Firms’ rationale) Territorial rationale Sectoral rationale Characteristics One enterprise

Several enterprises & Institutions in a given geographic area

Several enterprises in the same sector Dynamic Competitive market Spatial co-operation Vertical co-operation Objective Profit maximization, _{market value} Create value for the _territory Supply Chain growth _{(product orientation)} Production model Specialized Diversified Specialized

Intensification

level High Low (sustainability) High/Low Code of practice Integrated Negotiated Negotiated

Player’s

organization Autonomous Regional coordination Vertical coordination Patrimony Portfolio & Brands _(Goodwill) Territory _{(geography & history)} Product

Flexibility High Impossible Regular

(29)

Relevance of

“

Terroir

”

labeling in

Players

’

Strategies

entreprise Customer 1 Customer 2 Customer 3 Terroir 3 (Country) Terroir 2 (PGI) Terroir 1 (PDO)

Different Territorial Anchorage, depending on :

• Customer’s perception • GI notoriety

• Perceived “Terroir” specialization

(30)

Concluding remarks

Very High GI and Quality Labeling density

in the EU (risk related to Consumers getting

confused)

The market share of GIs in the EU Food

Market is low except in Med Countries

An important growth potential for

SMEs

“

Terroir

”

based strategies (Economic

performances and Sustainable

Development requirements)

Uncertainty on institutional framework

(WTO dispute, EU policy)

(31)

Distribution of GIs by countries, excluding

the EU in 2004

Country Frequency Percent

1 USA 42 22,0% 2 India 16 8,4% 3 Ethiopia 14 7,3% 4 China 12 6,3% 5 Togo 9 4,7% 6 Turkey 7 3,7% 7 Mexico 6 3,1% 8 Peru 6 3,1% 9 South Africa 6 3,1% 10 Japan 5 2,6% 11 Morocco 4 2,1% 12 Argentina 3 1,6% 13 Cameroon 3 1,6% 14 Ghana 3 1,6% 15 Korea 3 1,6% Total Top 15 139 72,8% Total 49 countries 191 100,0%

GIANT Database, http://www.american.edu/ted/giant/global_analysis.d Jim Lee and Tamara Dorabawila, American University, 2004

(32)

Consumption pattern - festive eating - Cooking, recipes Local references Tradition & Region Know-How Production pattern - natural, safe - pesticides free Packaging - material - colors - design Accessibility - marketing channel - willingness to pay

Terroir

product

Key Factors for defining

Consumer’s Behaviour

(33)

What

“

_“

Terroir

_Terroir

”

_”

Labeling for

_{Labeling for}

enterprises ?

GI and Label Complementarity

(Brandade de Nîmes Raymond Geoffroy)

GI alone (Pélardon des Cévennes,

Cassoulet de Castelnaudary)

GI in the product label (Porc du Pays

d’Oc, Grisettes de Montpellier, Cap

Camargue)

GI in the corporate label (Vignerons

Catalans, Provence Régime)

Source: Benkhira-Fort F., 2005, EFFETS PRINCIPAUX ET DE CONGRUENCE DE LA RÉGION D’ORIGINE, DU PRODUIT ET DE LA MARQUE SUR L’ÉVALUATION DES PRODUITS : UNE APPLICATION AUX PRODUITS ALIMENTAIRES DE TERROIR », PhD Thesis, Université de Montpellier II - CREGO

GIs: market and players' strategies in the European Union

GIs: Market Potential

GIs: Market Potential

& Players

& Players

’

’

Strategies

Strategies

in the EU

in the EU

Jean

Jean

-

-

Louis Rastoin

Louis Rastoin

Cal-Med Consortium Workshop III

Mediterranean Products in a Global Market Place

European Mediterranean Institute

Barcelona

Outline

Outline





Research question:

Research question:

What strategy based on the GIs

What strategy based on the GIs

Market in the EU ?

Market in the EU ?





3 key points:

3 key points:

--

The

The

“

“

Food Labeling

Food Labeling

”

”

--

Food Market Segmentation

Food Market Segmentation

•

Registered GIs in the UE in 2006

Registered GIs in the UE in 2006

EU List of Quality Wines Produced in

EU List of Quality Wines Produced in

Specified Regions (QWPSR), 2007

Specified Regions (QWPSR), 2007

EU Production of quality wines (QWPSR),

EU Production of quality wines (QWPSR),

2005

2005

The rise of EU PDO

The rise of EU PDO

-

-

PGI registration number

PGI registration number

Distribution of GIs by EU countries, 2006

Distribution of GIs by EU countries, 2006

2.

2.

Food Market

Food Market

Segmentation

Segmentation: The 3 Food Markets

Segmentation: The 3 Food Markets

French Food Retail Market

French Food Retail Market

Segmentation & Trends

Segmentation & Trends

-

-

2004

_’

_Strategies

_{Food Market Segmentation}

_{Food Market}