Marketing the Vermont Brand

1. Marketing the Vermont Brand Jane Kolodinsky, Chair, Department of Community Development and Applied Economics Director, Center for Rural Studies

3. What is the Vermont Brand Worth? What did the anecdotes say? Origin Labels as Consumer Information: The Case of Vermont Specialty Food Products—Elizabeth Skinner • A former Secretary of Agriculture mused 10%-15%--early-mid 1990s • There was no evidence of that • First empirical research was in 1998!

4. Cheddar Cheese • Maple Syrup • One of the first studies to show that having an association with Vermont is a key driver of preference for VT labelled products • For cheese, believing that the VT product is higher quality increases purchase • What about paying a premium? • Believing that Vermont products are unique or different drove the premium for BOTH maple syrup and cheddar cheese—2 times more likely to pay at least a 10 percent premium

5. A sample of Vermont logos… But what does UNIQUE and DIFFERENT mean?

6. Who actually BOUGHT the products? • For both maple and cheddar • Believing VT has a higher quality • Having an association with Vermont

7. Might it be worth protecting the Vermont Brand?

8. Across all labels: • Over half of respondents perceived that the “main ingredients come from Vermont.” • Over half of respondents perceived that the “company is based in Vermont.” • Over half of respondents perceived that the “product is made in Vermont.” • On average, for labels that place the word Vermont near a specific ingredient (Vermont apple cider, Vermont blackberry jam, Vermont pine chest): Over 67% perceived that the “main ingredients come from Vermont.” • On average, for labels that place Vermont near a company name (Vermont Muffin Company, Vermont Dairy Company, Smith’s of Vermont, Vermont Maple Company, Vermont Sweaters Inc.): Almost 73% of respondents perceived that the “company is based in Vermont.” • On average, for labels that place the word Vermont in some other relationship to the product (Rosa’s Vermont salsa, Vermont specialty, Vermont gourmet jam, Vermont cider): Over 50% of respondents perceived that the “company is based in Vermont.”

9. Might it be worth it to PROTECT the VT Brand? • Vermont Origin Rule-CF120-2006 • In general, the rule prohibits the use of “Vermont” or similar terms in connection with the advertising or marketing (in the words of the rule, any representation”) of certain “non-Vermont products” except that when a “Vermont” company name is used in close association with a product, specified disclosures may suffice. “Vermont Fudge Pecan Roll,”-2010 2011 2008

10. Q: How does the rule define a “Vermont product”? • First, any company name that appears in connection with the product must be “based in Vermont” (as defined above). • Second, if substantially transformed, the product must be made in Vermont. • Third, the product’s primary or prominently identified ingredient must come from Vermont.

11. What are the Attributes that People Care About? • Consumer Willingness to Pay for Credence Food Attributes: Determinants and Implications—Minghau Li, 2013 • 9 of 15 food attributes command a price premium above 15% with all between 15 and 25 percent • Having an association with VT matters

12. Fair wages • Environmentally friendly • Family farm • Preserve open land • Seasonal (special) • Coop • Taste of place • Local*** 1.20 • Made in Vermont • Not important: • Traditional, new, consistent, organic, high quality import, brand name

15. Take Aways • Looking back at almost twenty years of research—the anecdote was right!—15% premium on average • Having an association with VT is important • Many ways to do this and you don’t even have to be here (but tourism is nice) • Tradition must also be contemporary

16. Contact …resources and expertise to support rural people and communities Jane.Kolodinsky@uvm.edu