Cattlemen in South Dakota have figured it out. They're using marketing savvy, combined with well-reasoned, forward-thinking ideas about branding (frequently called “labeling” in some circles) to establish a new South Dakota beef label that will be of value to consumers worldwide.
A bill, passed last month in the South Dakota Legislature and signed into law by Gov. Mark Rounds, established a seal of approval for high quality beef products from cattle raised and processed in the state. Participants are subject to state-imposed standards, licensing fees and careful recordkeeping on the cattle they raise. The idea should serve them well when it comes time to market the beef from their animals.
South Dakota's tourism and economic development secretary, Jim Hagen, says the seal “will be recognized worldwide as a safe, wholesome and quality product.”
Although it's a voluntary program, what dedicated South Dakota producer wouldn't want to participate? The state is known for producing high quality beef. Creating a label with the standards and certification to back it up should carry a very strong message to consumers looking to purchase beef.
COOL vs. quality-based
Compare the new South Dakota program to the half-baked, mandatory national country-of-origin labeling (COOL) law, which has obvious flaws and demonstrates a lack of marketing savvy.
Mandatory COOL forces high quality producers to share a label with the lowest quality producers in the country. While it's true the U.S. produces some of the world's best beef, it has its share of clunkers, which would enjoy the use of a “born, raised and processed in the U.S.” label regardless of quality or wholesomeness.
For instance, up to 20% of beef produced in the U.S. comes from dairy animals. Producers of these animals have completely different priorities.
There are also individuals who raise cattle not as a business, but as a lifestyle or hobby. There are more than 200,000 farms with less than 10 head of cattle. This represents more than one million animals.
While the beef from these cattle is probably fine, there's no way to ascertain its wholesomeness or quality. Still, no matter how it's raised and by whom, these cattle would not just be allowed, but required, to share the “born, raised and processed in the U.S.” label in U.S. grocery stores.
In fact, all products labeled “born, raised and processed in the U.S.” could be saddled with an image generated by the attributes of the lowest quality products under that label. That isn't fair to the higher quality producer.
Supporters of mandatory COOL are depending solely on the jingoistic tendencies of beef consumers to increase marketing potential of their products. Worse, they're pandering to safety fears of beef buyers, losing sight of the fact that safety in the marketplace should be a given, not a marketing claim. (No one should be allowed to sell an unsafe product, regardless of source.)
With national animal ID just around the corner, direct costs for producers to participate in a mandatory COOL program are probably immaterial. But how much would you pay for a bullet to shoot yourself in the foot? Add to that the indirect costs associated with labeling billions of packages yearly, which producers would share, and it becomes significant.
It shouldn't be hard to understand why this country's elected officials have embraced legislation to make COOL mandatory. It's a great opportunity to wrap themselves in the flag, pat their constituents on the back and talk about what a wonderful job we Americans do.
But political savvy is no replacement for business intelligence. While patriotism is a tried and true tool in the political arena and a wonderful sentiment, it has yet to prove successful as a universal means of increasing the value of products in today's global marketplace.
Mandatory COOL may give some U.S. producers a sense of pride, but flawed marketing logic on the designers' part will assure that it does nothing to put money in their pockets. They should take a cue from South Dakota producers and design a program that actually means something.
Walt Barnhart is president of Carnivore Communications LLC, Denver, CO, and a former communications director of the National Cattlemen's Beef Association.