National brands:You get what you pay for.
By George Carageorge | Torino Food Distributors

In years gone by, when national brand names for most kinds of food items were household names, everyone recognised the security of buying these brands. In my business national branding for local products is given sourcing priority. There are many advantages. We have become a society of people who know the price of everything but the value of nothing. A brand name meant complete integrity of the product. From weights, contents, packaging, price and above all quality, whether you were a household or a restaurant you relied on and believed in the brand and the ability to have recourse to a supplier of repute if it is not.

In most cases the product was always uniform and honest. The chocolate was not diluted with emulsifiers, the milk had plenty of cream in it, and the butter had no artificial colouring and so on.

In other words there were no real tricks in the production process to lengthen the life of products artificially in any major way that was evident and because there was less competition, with fewer suppliers and manufacturers, turnover was quicker, so stock was fresher and so on.

Modern consumerism, with the proliferation of no name brands and boutique manufacturers (boutique doesn’t mean they are better by the way, just smaller), the freeing up the international trade world, increased awareness of the public to food varieties and qualities and the expanding opportunities in restaurant dining has meant that more and more products that save time in food preparation are coming on to the market. This applies to the domestic and commercial market. Pre- prepared foods of any kind tend to be shortlifed unless frozen.

This type of preparation often can compromise quality. Where once you bought fresh and prepared it immediately before cooking; now we now use frozen, preserved products. These products and their brands are no longer dominated by the large local and international food companies. In fact, the market is dominated in numbers with small localised manufacturers, suppliers, importers, and distributors and alike. Brands that were dominant years ago are still there in some cases, but the profiles are only higher in retail markets where people buy mostly by name first, then price secondly (although that is changing too). Foodservice markets (restaurants, etc.) are overwhelmed by smaller brands. From garlic bread made by the local Chinese bakery to garlic paste done in the back shed of someone’s house (not kidding). Canned legumes now come from countries like Peru, China, Chile, and Thailand. Once upon a time all our canned veggies were either Aussie, grown in Tasmania, or the Riverland. Not now! Not saying it’s no good, just different. These goods have to pass Australian quarantine laws and inspections. We even have them testing the brine in Greek Kalamatta olives. Why is this so? Why are we now so diversified in sources of food? Answer: Economics. Economy... Cheap!

Product integrity will always come at a price.

Here’s a classic example: canned salmon and tuna. Next time you get your canned salmon or tuna check the label for water content and the texture. Texture is important. If you can see the flakes of fish it’s good. If you just see mush when you open the can it’s the scraps of the catch. It should be dirt cheap and suitable for sandwiches only. If you’re buying a no frills brand it’s often loaded with water and that’s why it’s cheap. If you’re buying a good brand, like say Heinz or John West, the water content is much lower than the cheaper ones. It’s not rocket science is it?

While there are exceptions to this generalisation, in the main, companies that are multi nationals have reputations to preserve and brands to protect. Usually they don’t muck around with net weights and quality, but it comes at a price. In most cases the yield is higher, so in fact the net price is the same.

It’s really hard to get some clients to understand that, especially when small, undercapitalised distributors can secure the cheaper stuff and offer it at lower prices. It’s the same in almost all categories of food. We buy flour, for example, from the fertile wheat belts of the country where water, sunshine and pests are optimised or minimised. This flour is strong, uniform and consistent, but more expensive than the stuff that comes from the semi arid western plains. Low water and poor growing seasons produce poor wheat and flour; therefore it’s cheaper and inconsistent. Hey, but if it works for you great! I try not to sell this stuff anymore.

I can go even further with smallgoods like ham, pepperoni, salamis and other cooked meats can be synthetically infused with smoke flavours instead of using the good old fashion method of real wood smoking. This old fashion way adds time, reduces weight and increases costs, but the flavours, yields and quality are incomparable. By using the traditional smallgoods products your invoice costs go up, but as you can use less because the flavours are better your costs are the same more or less. Some customers can’t get it through their thinking that cheaper is not always better. There is no substitute for quality.

Product integrity: Sometimes the places where these products are made will pass, initially, the health codes for manufacture, packing and preparation, but as they must sell cheap to get into the market, profit suffers and short cuts are taken in the costly observance of these health codes, in the quality of the ingredients used and the supply chain and above all, especially maintenance of clean premises.

Distribution integrity: Unless you’re a fair dinkum food distributor, often affiliated with a national buying group with food safety codes in place and audited regularly by the food safety standards codes, you won’t usually get an account from national brand type manufacturer.

This is where the bottom feeders of distributors come in and sell on price and to hell with the safety of the customer or consumer when it comes to product integrity. I have seen deliveries done in unrefrigerated vehicles, I have seen chips been delivered by food packaging specialists in vans.

Some years ago the food industry sought self regulation through observing certain types of food safety disciplines. This was called HACCP. To get this certification you had to pass an audit by an independent auditing body. The protocols included are, pest control, sales and purchase tracking of goods from cradle to grave. That is from the time of manufacture to the sale to the end user just in case there is an issue. All of this requires fairly sophisticated software to track use by dates, manufacture dates and dates of sales to customers.

Some clients will make mistakes with rotation of course want us to give them a credit. We know who got what when and have ways to prevent unreasonable requests for credit. We make mistakes too from time to time, but can track it as soon as we find out.

Dairy products in our industry are really important and key products in food ingredients. Over the years this industry has been racked by government interference, regulation, deregulation, droughts floods and goodness knows what else. Yet this industry is still dominated by only a few major multinational players, such is the capital requirement for production and distribution. One would think that this would predicate some stability in marketing, price and quality. Nothing can be further from the truth.

The failure of these companies to recognise the value of our markets has led to leakages into a secondary production and distribution network, from suppliers who will buy product on the wholesale market at bulk prices for lots in hundreds of tons then value add to the product by shredding, or repacking. Then in turn come into the market and undersell against their own multinational supplier.usually one of the big boys. The problem with all of this is the unreliability of the consistency of the ingredient product. Sometimes it’s the same as before sometimes it not, sometimes it’s short coded or out of production specification. There will always be a reason why it has not been sold to the good markets. That is retail or the top level food service or restaurant market by the big boys.

If you’re happy to risk your business for a few dollars a week savings then it’s good for you.

We won’t carry any of this stock for all these reasons of unreliability and inconsistency of product specification. Just remember you get what you pay for.

Tomatoes in any form are the same story, be they peeled, crushed, diced or whatever. So much can be done to them to make them look a million dollars. Thickeners, colours and other tricks all add to the mystery. There is only one real yardstick after the source of the product and that is the amount of solids in the can. Solids can be varied to arrive at a price. Next time you open a can of peeled tomato’s count the pieces of whole tomatoes. Less should mean cheap. More means less water and more cost. Large multinational companies normally won’t let a distributor have an account unless haccp food safety programs are in place.

In summary then, let us recap some of the advantages of buying national brands.

• Products are usually of consistent quality.

• Product integrity is secured by food safety audit programs.

• Net weights are usually accurate and fillers like water or minimised.

• Distribution is usually through recognised HACCP accredited distributors.

• Food safety recall programs are in place for national alerts. Regular laboratory testing of production.

• Products are usually marketed through national advertising campaigns, supported by large budgets and point of sale brochures.

• Sales and marketing representatives are available for in store demonstrations, expert product advice and general support at end user levels.

• Products are the same for national distribution. This is especially advantageous for companies that have national networks and require uniformity.

As a final overrider to this attack on nonnationally recognised brands, there will be some products that this does not apply to. This will of course apply to products not available in Australia in marketable quantities. For example: artichokes, some olive varieties, anchovies, Italian whole peeled tomatoes (beware of tomatoes canned in Italy, but grown in other countries). You get my drift.

Australia used to be a great country for agricultural produce. Times have changed. Our leaders have badly managed and planned our water resources and costs of production at the farm gate have risen above our foreign competitors. We have a level playing field approach to international trade. Given choice consumers will go for the cheaper imported product in the main. I don’t see us turning the corner with present or alternative national leader ships. But buy Australian national brands where you can!