Rapport nr - SIFO

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32roir® store brands changed the organisation of prices on local food. Store brands are always cheaperthan national brand for most products commercialised in these large stores. The association between alabel and an appellation raises the price of local products. This is also the case between a Terroir®store brand in association with a label and a national brand without a label or appellation. A study ofHassan & Monier-Dilhan underlines this fact and which price consumers are willing to pay for a nationalbrand or a store brand with or without a label. The store brands allow a large distribution areafor their products, not only for the region of production but also for the whole of France and exportation.To advertise, store brands prefer to communicate about the brand rather than about the product,which allows, for example, “Reflets de France” to use one advertisement for more than 300 productsand they can share the price of promotion in each product. The cost of communication per product,often more than 20% of the total price, is reduced and allows store brands to be cheaper than normalbrand.French consumers are not always ready to pay more for quality. A study by the CREDOC (Centre ofResearch for the Study and the Observation of life Conditions)-INC (National Institute for Consumption)in 2001 reveals that consumers with a low purchase power are not ready to pay more for healthrisk or quality. This is not surprising, but it is interesting when we analyse the types of products forwhich consumers are ready to pay more. For example, some consumers will pay more for a qualitylabel in meat (75% of consumers interviewed agree to pay more a quality assurance label) or poultry(71% of consumers interviewed agree). Concerning eggs and cheese, only the half of consumers areready to pay more for a quality signs, and only 30% for milk. The high consumption of labelled poultryseems to support these results.Concerning prices, as we can see with the example of the PDO Ossau-Iraty and the brand Etorky(which doesn’t use the PDO), and Etorky is more expensive than the “traditional PDO product”, Ossau-Iraty.To understand this difference we have to look at the beginning of this PDO and the interactionbetween the brand Etorky and the Union managing the PDO. In 1980, there were three regionswhich produced sheep milk, Aveyron, Corsica, and South West. The most Important Company manufacturingsheep cheese was Roquefort and Lactalis, in Aveyron. Roquefort bought the milk also in theSouth West to produce its cheese. Those Producers who have more independence and a better valorisationof their products choose to create a new PDO, l’Ossau-Iraty based on traditional know how ofthis region (grouping two valleys of two different departments). The creation of this PDO was an initiativeof producers but also of a big company member of Bongrain Group. At the beginning Bongraincommercialized their product with the PDO but after a short time they noticed that with a brand managementand not only a global PDO promotion, they could raise the valorisation of their product. Afterfew years, Etorky, the brand of Bongrain a competitor company of Lactalis was better known than thePDO Ossau-Iraty and its price was also higher (16€/kg for Etorky and only 13€/kg for the traditionalPDO). Moreover, the participation and the financing of the PDO appeared too high for Bongrain , aswell as the conditions of the PDO too strict to have a brand management: they could then left the PDOUnion, their brand was sufficient to sell their product but they don’t want to leave the PDO becausefor us it can represent a good way to buy quality milk directly with the producers of the Union. In thiscase the brand management and the strength of an international brand allowed being more efficient inthe creation and the valorisation of this new product.
5 Distribution Areas and Networks5.1. Types of sellersA French particularity on local food commercialization is the possibility to have different scales ofdistribution, and currently there are approximately four different scales : direct sale at farm, open market,small shop and supermarket The first one is direct sales at a farm, which is a real success supportedby citizen interest. The second one involves small shops like butchers, bakers, etc. This meansof distribution allow the sale at a farm to have a direct interaction between the seller and consumer,where the farmer can explain the product(s) and interests the consumer. This is why local food wasfirst sold in small shops and farms, which ensured a direct promotion of the product, in contrast to industrialproducts. Small stores maintain the proximity and interaction between the consumer andseller, including stores where the owners are also the producers. The most important percentage ofadded value is created by the producer, but with respect to importance, however, it is created by theseller. This is the reason why some producers create their own store while keeping their job as a producerand at the same time also recuperating added value created by the sale. Some butchers in medium-sizedcities and localised in rural regions, relatively close to campaign efforts, were created withthis store model where the owners are also the producers (Agreste Primeur, N°128, May 2003). Theapparition of producers’ network or associations of producers have also changed the environment ofthe commercialisation of local food. The association AMAP (“Association pour le Maintien d’une AgriculturePaysanne”, Association for the Defence of a Peasant Agriculture) contributes to help thesmall producers, creating proximity partnerships between a group of consumers and a farm. This associationtakes often place near an important city, in an urban periphery, functioning by subscription anddirect sale. This association is excellent for the commercialisation of lot of products as especially fruitsand vegetables.The third type of distribution scale is composed of supermarkets in close consumer proximity, such asa town where there is still contact with the consumer. Finally, the last type of distribution is the hypermarket distribution. It has appeared since the early ninety’s and has risen significantly since the beginningof this century. The part of these hyper markets in the local food distribution is currently risingvery quickly. Today, hyper markets are the largest sellers of local food, even when all types of networkare considered. This seems to be the result of the store brand success (Reflets de France, Nosrégions ont du talent, etc), whose owners are the main chains of hyper markets (Leclerc, Carrefour…).5.2. Influence areas of labels and appellationsThe PDO and PGI are especially distributed on a national scale, due to the SME’s (small and mediumcompanies) system of commercialization, even if this is totally compatible with a regional commercialisation,especially for the small appellations. In reference to the product quality, CCP is used moreon national or international commercialisation scales. Furthermore, a reduction of the distribution networkalso involves labels which are sold more in a regional area. The previously described pieces ofinformation are all extracted from the Agriculture Ministry (Agreste n°128, May 2003). Concerning
Page 1 and 2: Project note No.10-2006Nicolas Ferr
Page 3: Project Note No. 10 - 2006Title Ant
Page 9: AknowledgementDr Virginie Amilien -
Page 13 and 14: SummarySince the food crisis of 199
Page 15 and 16: RésuméLa France produit de nos jo
Page 17 and 18: 1 Introduction“We cannot govern a
Page 19 and 20: 2 Agro-food industry2.1 Presentatio
Page 21 and 22: Agro-food industry 192.4 Terroir®
Page 23: Agro-food industry 212.5.1 The Prod
Page 26 and 27: 24Figure 3.1: Table LabelPDO in 200
Page 28 and 29: 26Figure 3.2Demand of PDO by union
Page 30 and 31: 28is mentioned on every bottle, tha
Page 33: 4 Management and Costs of Official
Page 37 and 38: 6 Promotion6.1. AdvertisingThe mean
Page 39 and 40: Promotion 37Even though Terroir and
Page 41 and 42: 7 SuccessTo evaluate the success of
Page 43: Success 41combined with a very larg
Page 47: 9 ConclusionThe presence of a stron
Page 50 and 51: 48Agriculture and Human Values, Sum
Page 53 and 54: Appendix1. French safety regulation

Rapport nr - SIFO

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