The Egg & Clean Labeling

It’s natural!
An American Egg Board briefing (white paper) on the relevance and importance of eggs in today’s clean label marketplace and their power to enhance and protect your food product’s market share

• Buying trends increasingly lead to natural and clean label products
• People want to see ingredients they recognize and trust
• Clean labels more often make the difference in purchase choices
• 85% of consumers view eggs as a nutritious, wholesome choice for their families¹⁰
• Eggs are a key ingredient in making products better 
• Egg products used in food manufacture are indistinguishable from fresh eggs in flavor, functionality and nutritional value
• Cost-effective, appealing, always 100% natural. Eggs can make all the difference in the marketplace
• Eggs are not a genetically modified (GM) food. This includes shell eggs and eggs used for processed egg products  

It’s a fact – nothing is more natural than the egg. And for consumers who look more and more for clean labeled natural products with recognizable ingredients, eggs can make an important difference in their buying decisions.

Consumers are demanding natural products because they equate natural with healthy, attracted to this “natural nutrition” they see as inherently good, fresh and wholesome.¹ According to Mintel’s Lynn Dornblaser, director of CPG Trend Insight, consumers desire transparency in their food. “They are very suspicious of things they don’t understand and this translates into being afraid of chemical names they can’t understand.” For this reason, they are attracted to clean labels, which have a relatively small number of identifiable ingredients. In addition, consumers will often pay more for natural products.¹

And consumers aren’t wrong, particularly when it comes to eggs. As a registered dietitian and culinary instructor at the Institute of Culinary Education in New York put it, eggs are a “nutritional powerhouse.” Eggs provide some of the highest quality protein of any food on top of being one of the few nondairy sources of vitamin D. Eggs are a naturally nutrient-dense food, containing varying amounts of 13 essential nutrients in a package with a relatively low number of calories.

Egg products are a valuable tool in meeting diverse formulation requirements while providing the clean labels consumers crave. These products come in a variety of formats, such as refrigerated liquid, frozen, dried and specialty products.

With more emphasis today on nutrition and added protein in the diet, people have come to recognize the nutritional value of eggs. Most healthy people can include eggs in their diet. And that's good news, because as consumers become more health-conscious, they are choosing foods with minimal ingredients and fewer synthetic additives. There’s ample proof that people like their eggs.

According to McDonalds^®, its breakfast items, including The Egg McMuffin^®, represent 15% of its business. In 2012, Americans consumed 223.70 million cases or nearly 80.5 billion eggs.

Eggs are an essential part of making the foods we enjoy every day even better. And putting them on your label can be an economic asset.

Eggs: Much more than natural

Eggs assuredly give consumers a good, familiar feeling about buying products made with trusted, recognizable ingredients. But that’s not the whole story. Eggs are also a key ingredient in making products better.

One of nature’s most perfect foods improves other foods as well. Egg products contribute more than 20 functional properties, such as the ability to foam, leaven, bind, thicken, coat, color, emulsify, plus control crystallization andmoisture which make many food formulas possible – naturally. Most egg products are virtually indistinguishable from fresh eggs in nutritional value, flavor and most functional properties. Eggs are priced competitively and sourced domestically, qualities important to both manufacturers and consumers.

Targeting the natural market

Designed to meet the increasing demand for healthy food products at a great price, Target has introduced Simply Balanced™, a new food collection within its own brand portfolio. The Simply Balanced collection is crafted to be free of artificial flavors, colors and preservatives – giving guests more of the simple, recognizable ingredients they know and want – and a food label they can understand. The Simply Balanced collection offers nearly 250 products across snacks, pasta, beverages, frozen seafood, dairy and cereal.⁸

Eggs possess unique properties and attributes unequaled by any single egg alternative. Research supports findings that eggs require more than a simple 1:1 substitution with an egg alternative to acquire similar ingredient functionality in many prepared foods.² It takes more than one ingredient to replace the multiple functionalities of eggs, running the risk of increasing costs, while losing the eggs’ natural appeal. It’s simple – adding eggs adds value.

‘Aware Shoppers’ shape clean label trends

More and more consumers are redefining the qualities they value in the foods they eat and taking healthy diets and eating habits into their own hands. Fresh, safe, natural, healthy and chemical free are now the key words people use to describe what they’re looking for. People are increasingly aware of health concerns and the nation’s expanding waistlines. To be continually relevant in today’s market, these concerns must be addressed.

Topping the list of Innova Market Insights’ food and beverage predictions for 2013 is “The Aware Shopper.” Described as informed and knowledgeable about health and value, “Aware Shoppers” are key drivers in shaping the clean label trend.

These shoppers, with support from consumer advocacy groups, lobbyists, non-governmental organizations (NGOs) and politicians, are pushing the food and beverage industry for simplicity, transparency and credibility. Answering their concerns isn’t difficult, according to Innova, “Simple, clear labels on products send the transparency message to consumers.”³

What does ‘clean’ mean?

It’s simple, while industry has struggled to analyze clean labeling; consumers have their own clear definition. According to Food Navigator‘s Elaine Watson, it’s simple – “Today’s informed and aware consumers are looking for ingredients they recognize and have at home.”⁴

Results from the 2013 International Food Information Council “Health and Wellness” annual survey showed 93% of consumers prefer to see common names for ingredients on their labels. A 2011 American Egg Board survey shows that 94% of American households have eggs in their homes.

Beyond the definition, clean labeling means opportunity. From 2011 through the first four months of 2013, nearly 6,000 (5,928) products with “All Natural” as a label claim have been introduced, a clear indication of the rising demand for these foods. Clean labeling with familiar ingredients is also important in influencing the crucial Millennial market, where 58% of respondents said they would be willing to pay more for natural products.⁵ There are 26 million American “healthy consumers” 50+ who “seek out natural products in supermarkets” representing $1 trillion in aggregate household income.⁶

Clean labeling also reflects the rise in demand for simple comfort foods, made from simple ingredients commonly found in the kitchen. It also encompasses the fresh and locavore movements, along with the nationwide surge in local farmers markets. Throughout the country, eggs continue to be associated with products that are fresh and local.

Large retail corporations, like Target, which closely follow consumer trends in packaged foods and groceries, are turning toward natural products with clean labels. If you want to be part of this growing market, you need to take a close look at your ingredients.

It’s proven that consumers’ level of familiarity and comfort has a distinct psychological effect on likes and dislikes. In a government study, respondents liked a product significantly better when it came in a familiar package than when the identical product was served from an unfamiliar package.⁷ Think about it this way – people mistrust what they don’t understand. For some consumers, seeing ascorbic acid on the ingredient statement might bring thoughts of skepticism, while vitamin C is more easily identifiable. Everyone understands an egg.

5 ingredients for success

Not only are consumers seeking out products with natural claims, but companies are also using clean labeling to enhance premium products. A prime example is Häagen-Dazs Five^® ice cream, made with just five simple, natural ingredients – sugar, eggs, cream, milk and flavoring. The Five brand was introduced in 2009 and since has outperformed all other Häagen-Dazs brand ice creams.¹

Webinar focuses on clean labeling

In a June 26, 2013, Food Navigator webinar, Natural & Clean Label Trends 2013, presenters discussed research data and trends involved in the growing clean label market. According to participants, manufacturers should carefully consider market drivers, consumer perception and ingredient choices.

The clean and natural labeling movement continues to gain traction, not just in the U.S. but globally, with fully 17% of new food and beverage launches around the world now positioned as natural, additive-/preservative-free or both. Innova research indicates clean label product launches in the U.S. from 2007 to 2012 constituted 18% of the market.⁹

Tom Vierhile, innovation insight director, Datamonitor, London, discussed clean and natural versus organic and consumer opinions about ingredients’ titles. He said no matter how small a change is instituted, companies manufacturing almost any product type could take advantage of this trend, “even something like clear packaging to show the ingredients a product contains, telegraphs to consumers their products are more wholesome.”

Vierhile and other presenters warned attendees that consumers can be skeptical of natural claims and authenticity is one key to success.⁹ Eggs are real and authentic by nature.

Natural trends by the numbers

A survey of product trends over the past three years paints a picture of what it may take to remain competitive in a changing food market.

• Since 2010, approximately 14-15% of new food products introduced in the U.S. market had a claim of “no additive,” while approximately 26-31% of new food products introduced in the UK made a “no additive claim.” – (Dornblaser, 2013)¹⁰
• 61% of consumers believe that a product is healthier when it is labeled as “all natural.” – (Dornblaser, 2013)¹⁰
• Products with clean labels are perceived as Natural, Pure or Premium and can generally retail for a higher pricethan similar products without a clean label. – (Dornblaser, 2013)¹⁰
• Consumer demand for clean labels has a major influence in the development of new food products in Europe. – (Saltmarsh and Insall, 2013)¹³
• 57% of shoppers were reported by Health Focus International to be interested in food formulated with ingredients that they could recognize. – (Gibeson, 2012)¹¹
• Häagen-Dazs Five ice cream has turned its five recognizable ingredients into substantial marketing success. – (Hensel, 2011) ¹²

It’s simple

Consumers have made their definition of clean labeling clear. They want to see ingredients that they are comfortable and familiar with – items they have in their homes and would use to make recipes themselves. Food industry leaders are quickly responding.

Pillsbury Simply…^® cookies are advertised as being “made just like you’d make them at home with just the simple, whole ingredients you and your family know and love.” Consumers are also being greeted with an array of new products marketed using terms such as “like grandma made,” “homemade” and “homestyle.” Even if a product doesn’t have a particularly healthful profile, consumers seem to be responding to simple ingredient statements, observed Lu Ann Williams, head of research at Innova Market Insights. Innova has long identified the importance of the drive toward simplicity, first ranking it as a No. 1 trend in 2010.¹⁴

This is the time to make certain your label is doing all it can to earn and protect your market share. Research proves “all natural” labels do capture the attention of consumers and can clearly help to drive sales.¹⁵ “Success is built on the brand values of transparency, trust, and simplicity.”¹²

Whether companies decide to go “natural” with their products, it is important to be honest and simple with your messages and formulations in order to build a trusting relationship with your consumers.¹

One simple, familiar ingredient can help you build that relationship. The egg.

CITATIONS: 

1. Hensel, Kelly, “Natural Flavors, Colors Here To Stay,” IFT June 14, 2011; ift.org/2011/06/14/natural-flavors-colors-here-to-stay/
2. “Accept No Substitutes,” aeb.org/food-manufacturers/egg-nutrition-and-trends/accept-no-substitutes
3. “Innova identifies top 10 trends for 2013;” ift.org/food-technology/daily-news/2012/november/08/innova-identifies-top-10-trends-for-2013.aspx
4. Watson, Elaine, “Who is driving the clean label agenda, and what does clean really mean?” Food Navigator-usa.com, 27 February 2012; foodnavigator-usa.com/content/view/print/616184
5. Jeffries and Alix Partners, “Trouble in Aisle 5,” research report 2012;http://www.alixpartners.com/en/MediaCenter/PressReleaseArchive/tabid/821/articleType/ArticleView/articleId/258/Rise-of-the-Millennials-and-Aging-of-the-Boomer-Generation-Will-Mean-Trouble-in-Aisle-5-for-Established-Food-Brands-and-Traditional-Grocery-Stores.aspx
6. Packaged Facts “Healthy 50+ Americans: Trends and Opportunities in Emerging Wellness Markets;” packagedfacts.com/Healthy-Attitudes-Activities-6135736/
7. Vanderbilt, Tom, “Accounting for Taste,” Smithsonian, June 2013; smithsonianmag.com/science-nature/Why-You-Like-What-You-Like-208352621.html?utm_source=smithsoniantopic&utm_medium=email&utm_campaign=20130526-Weekender#Accounting-for-Taste-banana-1.jpg
8. Target: A Bullseye View; http://abullseyeview.com/target-introduces-simply-balanced-wellness-food-brand/
9. Turner, Jeanne, “The “X” Factor – Clean Label Considerations” 01 July 2013;foodproductdesign.com/news/2013/07/the-x-factor-clean-label-considerations.aspx
10. Dornblaser, L.  2013. U.S. product Trends and Implications for Meat & Poultry.  Reciprocal Meats Conference. Auburn, AL.
11. Gibeson, A.  2012. The complexity of 'clean' label. FoodBusinessNews.net February 3, 2012. Accessed on: June 2, 2013.
12. Hensel, K. 2011. Natural flavors, colors here to stay. live.ift.org/2011/06/14/natural-flavors-colors-here-to-stay/ Accessed on: June 20, 2013.
13. Saltmarsh, M. and Insall, L. 2013. Food Additives and Why They Are Used. In Essential Guide to Food Additives, 4th Edition. M. Saltmarsh, ed. Royal Society of Chemistry, www.rsc.org.
14. Kuhn, Mary Ellen, “Consumers Seek Simplicity,” Innova Reports, 19 July 2010
15. “The Influence of Labels on Consumer Choice - Importance and Ease of Interpreting Label Information,” US - May 2010 - [Report Section]
16. 2012 American Egg Board Advertising Tracking Study

CANADIAN FOOD PROCESSING INDUSTRY UPDATE

Food processing remains a strong industry despite plant closures

Mar 12, 2014 Romina Maurino, The Canadian Press

TORONTO – Despite a number of high-profile plant closures in recent months, the food processing industry in Canada is becoming more competitive and those efforts are likely to bear fruit in the form of jobs, according to a new study.

Western University’s Ivey Business School says its study found that the most commonly cited reason for closures was that a plant was no longer competitive and, in many cases, production was being consolidated at another location.

But when new plants open, they are often larger and incorporate new technology that drives down costs, it found.

Recent high-profile food plant closures in Ontario, such as the Kellogg operation in London and the threat of closure that loomed over the Heinz plant in Leamington before it was saved by a last-minute deal, raised concerns in a province that had watched its auto and steel industries decimated by the recession.

While auto manufacturing has improved, a string of closures that also included Smucker’s and Lance Canada Ltd, has led many to question the future of food processing in the province.

But the Western study, co-authored by David Sparling, said that between 2008 and 2014, the 105 closures in the province have been balanced by 105 openings and plant investments.

That means that while plant closures resulted in job losses, the industry overall did not experience a net decline in employment.

“The food industry typically has had lots of small plants and lots more retail,” he said.

“The new footprint for globally competitive manufacturing tends to be larger plants and probably located close to workforces as well as markets and transportation corridors.”

Hamilton, Brantford, London, Toronto and Windsor, Ont., are all large centres that have big workforces and the ability to service a larger company, he said.

“We’re probably going to lose more small plants in some small centres, (but) that said, the food industry also has a huge number of small companies and … a lot of them are starting up in rural centres, where people … want to extract some more value from farm product.”

Cities like Hamilton and Brantford, which were hit hard as manufacturing changed, are seeing new opportunities with a Ferrero Rocher plant in Brantford and a Canada Bread operation in Hamilton, said Sparling, who is the chair of Agri-food Innovation at Ivey.

When looking to set up new plants, he added, companies did consider whether there were people in the area who already understood manufacturing and were looking for work.

“The food industry doesn’t tend to pay quite as much as things like automotive and steel, so there’s a bit of an adjustment that way, but they are still good manufacturing jobs,” said Sparling.

Food processing, like other manufacturing in Canada, was hit hard by the recession, the high loonie, increased foreign competition and higher input costs.

But it has also been impacted by an increasingly competitive retail market for grocery stores, which “are operating at razor-thin margins and they’re just not doing as well as they have been in the past,” Sparling said.

“That means they’re really unreceptive to increase costs coming to them, so that puts all kinds of pressure on food manufacturers to figure out how can we get interesting products that consumers would care about to retailers without imposing any additional costs.”

The study, titled The Changing Face of Food Manufacturing in Canada: An Analysis of Plant Closings, Openings and Investments, found that there were 143 plant closures announced between 2006 and 2014, resulting in projected losses of almost 24,000 jobs.

The industry went through a particularly challenging period in 2007 and 2008, when 48 closures in the country outnumbered the 27 openings and plant investments. Ontario was the hardest-hit province, while Quebec was more successful in balancing openings and investments with closures.

But revenue continued to increase during that period and employment recovered more quickly than at other manufacturers.

Closures were also offset by investments from both foreign and domestic companies, with Canadian firms making slightly higher investments and the majority of activity coming from smaller firms.

“The overall picture is one of an industry that went through tough times in the mid 2000s but in recent years has been looking more positive in spite of continuing challenges,” the report said.

“It is also an industry that is more ready to compete than it was in 2006.”

To continue to grow the sector going forward, the report highlighted the need to create an attractive investment environment, reduce energy costs, to support and facilitate trade and to provide incentives for companies to choose to set up shop in Canada and upgrade technology.

Food companies also voiced concern about labour supply issues in the future, as they worried about meeting the growing need for skilled labour and said they could benefit from greater use of apprenticeships and training programs.

The food processing industry produces more than 70 per cent of the food Canadians buy and, with revenue of more than $88 billion in 2011, it’s the second-largest Canadian manufacturing industry and Canada’s largest manufacturing employer.

Canada's grain backlog leaves farmers in cash pinch

Grain backlog leaves farmers in cash pinch

ERIC ATKINS

The Globe and Mail

Published Monday, Mar. 03 2014, 5:00 AM EST

Last updated Monday, Mar. 03 2014, 9:24 AM EST

The backlog of grain shipments that has left sellers with unfilled orders and stuffed storage bins has many Western farmers facing a cash shortfall just weeks ahead of planting season.

The number of farmers seeking cash advances through a federal government program has risen by 35 to 40 per cent as growers look for ways to pay for seed and fertilizer, while much of last year’s record crop sits unsold in grain bins amid a shortage of rail cars.

Under the program, growers can borrow up to $400,000 – the first $100,000 interest free – secured by the value of crops they have seeded or stored and guaranteed by Ottawa. More than 12,000 farmers this year have applied for an average of $130,000, an increase of 30 per cent over last year in cash terms.“Farmers are really cash-strapped this year because of the transportation backlog that they’re facing,” said Rick White, head of the Canadian Canola Growers Association, which administers the Department of Agriculture’s $1.5-billion advance payments program for western growers of wheat, oil seeds, pulses and livestock.

There are about 5.5 million tonnes of grain – enough to fill 60,000 rail cars – sitting in prairie elevators and farmers’ storage bins awaiting delivery to customers, said Wade Sobkowich of the Western Grain Elevator Association, which represents six grain companies includingViterra Inc.

Growers’ associations are telling farmers who can’t sell their grain to talk to their banks or credit unions about loan extensions, such as the one offered by Farm Credit Canada, a Crown corporation which has offered to extend yearly payments by a month.

“We were concerned about the timing of the [grain] movements and the payments,” said Rémi Lemoine, chief operating officer of Farm Credit Canada.

It costs $150 to $200 to plant an acre, including the price of seeds, fertilizers, fuel and labour, Mr. White said. So a grower with 1,300 acres needs $200,000 to get started in the spring, but won’t see any cash flow until the crop is sold.

“There is a lot of urgency,” said Mr. White, who farms in southeastern Saskatchewan. “They’ve got to get seeding in April and May, and they’ve got to go out and buy all new inputs for the new crop, and they’ve got the old crop still in the bin and haven’t cashed it in yet.”

Doug Chorney is head of Keystone Agricultural Producers, which represents Manitoba farmers. He said he gets calls every day from growers who can’t sell their grain. “They don’t know what they’re going to do. They don’t know how they’re going to pay their bills,” said Mr. Chorney, who estimates about half of last year’s crop is in storage and at risk of spoiling due to insects, weather and wildlife.

Wheat prices in Chicago have fallen by 15 per cent over the past 12 months, and much more at elevators in the Canadian Prairies, where the shipping backlog has caused a glut.

Like a growing number of farmers, Mr. Chorney didn’t wait for the local elevators to make room for his grain. He ordered five so-called producer rail cars from the Canadian Grain Commission and sold 17,000 barrels of wheat to a grain company in the United States that paid him 32-per-cent more ($19,000) than the price offered at local elevators.

Canadian National Railway Co. and Canadian Pacific Railway Ltd. say they have responded well to the record grain crop, which is about 30 per cent bigger than the previous year’s. But the harsh winter caused them to run shorter trains at lower speeds for safety reasons, and backlogs have been inevitable, the railways say.

“From August to December, CN grain-car unloads at port terminal elevators were 9.5 per cent higher than the five-year average at the West Coast, and 22 per cent higher at Prince Rupert [B.C.],” said CN spokesman Mark Hallman.

Mr. Sobkowich said traders are losing sales from international buyers wary of sending ships that will sit at anchor in West Coast harbours waiting for grain.

“Companies are holding back on tendering to anywhere until we see this backlog clear,” said Mr. Sobkowich, who said that blaming weather for rail delays is like building a house without insulation, then blaming winter when the house gets cold.

“The railways are blaming the weather, but it’s because they didn’t invest in advance to account for the weather,” he said.

WANT TO LAUNCH YOUR NEW FOOD PRODUCT INTO CANADA OR US MARKET?

CANADA / US FOOD PRODUCT LAUNCH

PROJECT REVIEW, PLAN DEVELOPMENT AND ADMINISTRATION

OBJECTIVE:

BRANDAID Food's services are designed to target the needs of organizations wanting to get products listed with major food retailers in Canada and/or the US. We always list under the assumption that the deliverable is a successful listing and this involves not only getting a product included on a retailer's product listing but also insuring the product stays listed.

ASSUMPTIONS:

Attached you will find a detailed breakdown of the steps that can be required when listing and launching a new product. In putting this list of steps together we made a number of assumptions. The necessity of all these steps being carried out by BRANDAID Food is reliant upon your client and their level of experience and extent of resources they have available to deploy to the successfully implementation of a retail listing/launch.

•  Retailer has not experienced conducting a listing/launch with a major Canadian or US food retailer. 
•   "listing" comprises not only getting a product included on a retailers product listing but also insuring the product stays listed and this requires the vendor to develop and deliver the product's in-store launch program (i.e. test marketing, promotions, POS strategy, logistics setup and execution etc.) and merchandising strategy. The attached itemizes the steps involved in this listing program. 
• BRANDAID Food will be responsible for not only the development of the "listing" program but also the execution of all facets of the project as detailed.

BUDGETS:

The budget for a listing project varies depending on what steps in the execution of the listing project the client is prepared to undertake and capable of executing internally. Phase 1 as shown in the attachment is critical to establishing the definitive budget for any given client. In this "Client Review" phase BRANDAID Food's consultants review the client's state of readiness to submit a product to a retailer for listing. We know from extensive experience what the retailer will be looking for at the outset in order for the vendor to even qualify to submit a new product or SKU to the retailer for review.

PHASE 1 "CLIENT PRE-ENGAGEMENT REVIEW":

This is a mandatory first step in any listing project. Before reviewing any new product the retailer will need to be satisfied that various certifications are in place, insurance has been secured, the vendor has the capability in terms of budget, expertise and planning to execute a successful product launch and merchandising program. The retailer will want to conduct a site inspection of the vendor's warehousing, productions facilities etc.

BRANDAID Food will verify how ready the vendor is to submit a new product and, as required, itemize what needs to be done to get the vendor prepared to make a submission to any specific retailer.

Examples of the review include:

·         Value proposition, competitor advantages, product positioning

·         Listing Fees, labeling, nutritionals

·         Promotional Funding, Trade, Promo & Deduction Management

·         HACCP, Global Gap, etc.

·         Warehousing, Storage, Handling

·         Pallet and Returnable Container Tracking

·         Budgets – Branding, Marketing , Supply/Logistics

            In all cases, strategies for dealing with deficiencies will be developed.

Contact us for a quote.

PHASE 2 "MARKETING PLAN PREPARATION AND DELIVERY":

The budget for this stage is influenced by the possibility that certain elements of the marketing program (e.g. packaging design and mock-up production, ad creative, marketing materials design and production) will need to be outsourced. These costs can be limited by the client's internal marketing resources and capabilities.  

Examples of this include:

·         Store checks - product and shelf facings

·         Competitor Analyses

·         SWOT analyses, pricing, features, conclusions

·         Store checks for product and shelf facings

·         EDI setup

·         GS1 listing

·         Branding strategy

·         Package design

·         Sales strategy

·         Promotional program

·         Test marketing

·         Launch strategy

Contact us for a quote.

PHASE 3 & Beyond "BROKER PLAN, SUPPLY LOGISTICS, CLIENT PRESENTATIONS":

The budget for this stage is influenced by the possibility that certain elements (e.g. POS materials design, production and setup; in-store demonstrations and promotions; test market sampling) will require outsourcing. Once again these costs can be limited by the client's internal resources and capabilities.  

Examples include:

·         Broker set up

·         Supply chain logistics versus forecasting

·         Continue head office liaison with plant production and sales

·         Execute Launch strategy

For all phases, more detailed budget breakdowns itemizing specific details regarding tasks and hours are available.

Contact us for a quote.

Contact:

Bruce MacDonald

Chief Executive Officer

BRANDAID Food

bmacdonald@brandaidfood.com

(647) 244-1063

Check out my new e-book entitled: Social Media Marketing in Agri-foods - Endless Profit and Painless Gain

The book is available on Amazon and Kindle for $4.99 USD. Visit amazon/Kindle to order now:
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Thanks for taking the time

Canada - S Korea Free Trade Agreement announced

With South Korean deal, Canada secures free-trade foothold in Asia

NATHAN VANDERKLIPPE

SEOUL — The Globe and Mail

Published Tuesday, Mar. 11 2014, 1:30 AM EDT

Last updated Tuesday, Mar. 11 2014, 6:50 AM EDT

Canada’s first free-trade pact with an Asian nation promises to offer beef farmers, salmon fishermen and whisky makers a new toehold in South Korea by sweeping away virtually all border taxes in coming years. But it fails to secure some of the protections sought by vocal opponents in the auto industry, who immediately said Ottawa gave away too much.

Canada’s current exports to Korea are dominated by coal, and the trade deal is unlikely to affect that. But it offers new opportunities at the margins, in smaller-value products, particularly from food producers. Over 15 years, it will do away with punitive Korean duties on beef, pork and seafood. It removes border taxes on a vast array of products, including whisky and ice wine, seafood, lumber and liquefied natural gas.Under the Canada-Korea Free Trade Agreement concluded in Seoul on Tuesday by Prime Minister Stephen Harper and South Korean President Park Geun-hye, both countries pledged to eliminate duties on 98 per cent of all goods. More than nine years and 14 bargaining rounds in the making, the deal offers what Mr. Harper called an open door “to the lucrative Asia-Pacific market for Canadian businesses.” For Seoul, it is the latest in a free-trade network that includes the United States, the European Union and Australia that is positioning South Korea as a potent new trade hub in northern Asia.

It will allow Ottawa to maintain the provisions of the Investment Canada Act, which allows screening of corporate takeovers by state-owned foreign companies, and leaves supply-managed agricultural industries – in particular dairy and poultry production – untouched (although none of those products will gain duty relief in South Korea).

It stands to lift Canada’s GDP by $1.7-billion, federal officials calculate. It gives the Harper Conservatives another successful trade deal, after one with the EU in October, and can further bolster the government’s economic credentials. The Tories have put expanding international trade at the top of their economic agenda, and the pact with South Korea is viewed as a stepping stone for future deals in Asia, including with Japan.

But the deal will not solve the concerns of the Canadian automotive industry, which criticized Ottawa for signing a document that rapidly eliminates tariffs on Korean imports and does not include retaliatory measures the United States negotiated for its auto makers. The U.S.-Korean free trade agreement includes a so-called “snap-back” mechanism that allows Washington to re-impose a 2.5 per cent duty if Seoul violates the deal. Canada was unable to negotiate the same.

Canada’s 6.1-per-cent duty on Korean cars will vanish two years after the deal comes into force, much more quickly than car companies in North America had hoped. That elicited a condemnation from Ford Motor Co. of Canada Ltd. president Dianne Craig.

“We believe that South Korea will remain one of the most closed automotive markets in the world under the deal negotiated by the Canadian government,” she said in a statement.

The United States and the EU have been unable to reverse a one-way automotive trade flow, she said, because South Korea imposes non-tariff barriers on imported vehicles and intervenes in currency markets to subsidize exports and protect its domestic market. Since the U.S.-South Korea agreement was signed in 2012, the U.S. trade deficit with South Korea has increased by more than 50 per cent, Ms. Craig noted.

Still, U.S. car shipments to Korea have doubled since 2011 – albeit to a still-tiny 24,000 in 2013. And “a large increase in Korean imports into the U.S. has not occurred beyond the percentage increase in the overall U.S. market,” said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. “On balance, it has been positive so far.”

Canada argued that its deal offers protections roughly equivalent to what the United States secured, in part by offering a fast, 177-day resolution for automotive disputes. In addition, in an interlinked North American industry, Canada will also benefit if the United States uses the snap-back mechanism.

“They weren’t going to replicate it for anybody else,” a senior official said.

Other industries said car makers have seized an undue amount of the spotlight. “Canada is bigger than the automotive industry, and this deal really is a fantastic opportunity for Canada,” said Joy Nott, president of the Canadian Association of Importers and Exporters, which includes the automobile industry. “I think the Canadian automotive industry will adapt.”

For most of Ms. Nott’s members, “this is a deal that Canada needed,” she said.

After U.S. and EU deals with South Korea, Canada’s trade with the country dropped by about a third, or $1.5-billion (U.S.). Exporters hope to regain that ground once the legal paperwork is drafted and presented to Parliament, which could happen in months.

Pork and beef producers applauded the agreement, but acknowledged they have work to do to recover lost sales.

“The worst-case scenario for us would have been no deal at all,” said Jacques Pomerleau, president of Canada Pork International.

But he pointed out that the United States got a better deal two years ago, including a shorter phase-out of tariffs on some key products, suggesting they had more bargaining power.

Canada was once the largest exporter of pork to South Korea. It’s now fourth and falling further behind each year.

John Masswohl, director of government relations at the Canadian Cattlemen’s Association said it was a “long road” to a good outcome. But, he added, “it re-establishes a basis of parity between Canadian and U.S. beef.”

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E-COMMERCE: LOYALTY DRIVEN MOBILE PAYMENT PROSPECTS

E-COMMERCE: LOYALTY DRIVEN MOBILE PAYMENT PROSPECTS

Practically no one disputes the potential for mobile phones to fundamentally
change the way consumers shop and pay. The real debate is the trajectory at
which this emerging payment type could become ubiquitous. Although both
emerging and developed market consumers are using mobile phones to execute
payments, m-commerce is not projected to be commonplace anytime soon.
Adoption of mobile payment apps will be directly related to the value add that
consumers receive from using mobile phones in lieu of leather wallets. Loyalty
has been shown to be an important factor driving consumer payment choice
before and will be in the mobile payment revolution as well. The loyalty that will
drive mobile payment adoption, however, will be about more than simply points
or miles or free hotel nights. Moving forward, loyalty driven mobile payment
initiatives will be about one-to-one customer engagement and the individual
consumer experience that today’s shopper want and expect.
Loyalty needs to be reimagined

One of the biggest reasons for the slow uptake of mobile wallets has been that
consumers have not yet been given a compelling reason to adopt. An embedded
loyalty scheme could be that reason, but it is important to note that loyalty
is evolving, and moving forward it will be about more than miles and points.
For years, companies thrived by using mass marketing, but such offers have
become less relevant for today’s consumers. It has progressed to the point that
consumers sign up for loyalty programmes they either do not care about or will

never redeem loyalty benefits they have earned.

Mobile wallets have failed to take off in the marketplace due to a combination
of factors, including consumer fears around privacy and security, an
uninformed consumer base, an absence of the needed infrastructure and the
convenience of already established payment methods. Ultimately, mobile
payments must be as cheap, safe and easy to use as traditional payment
methods to even be considered a viable option because consumers will choose
the method of payment that provides the greatest value. In order to encourage
wider adoption and ensure high usage, mobile payment players will have to
provide a value add, which could come in many forms, including monetary
savings, improved security, ease of use or increased loyalty. Of all these
potential benefits, mobile-driven loyalty may be the greatest factor with the
potential to drive consumer adoption of mobile payments.

Although still very much in the early days, the integration of mobile wallets
with value-added services has become almost a prerequisite for the success
of any mobile payment app, especially in more developed markets. One
of the more successful mobile wallets to date comes from the coffeehouse
giant, Starbucks Corp, which integrates its popular rewards program with
its prefunded QR-code based mobile app. In fact, a third of Starbuck’s North
American sales are funded by one of the company’s pre-paid cards, with the
mobile app itself processing 10% of those transactions.

Another real-world example of a loyalty driven mobile payment app is the
telecom-led mobile platform Isis. Although still in the early days of nationwide
deployment in the US, early results have shown greater adoption for those that
signed up for the attached loyalty programmes. It is likely that the payments
industry will see more of these loyalty driven mobile apps in the near future.
Loyalty, which has shown to be an important factor in driving consumer
payment choice in the past when it comes to card payments, will be just as an
important in the mobile revolution. The future consumer adoption of mobile

payments is directly related to this type of value add that consumers receive
from using their mobile phone. Although an embedded loyalty scheme could
provide a compelling reason to try mobile payments, it is important to note
that loyalty as we know it is in need of reinvention. Thanks to the increased
availability of smartphones, the rise of location-based technologies and the
emergence of big data, it is now feasible for companies to deliver a more
personalized loyalty offering than has ever been possible and to do so in real
time. Ultimately, mobile payments will be as much about the exchange of
payments as it is the consumer relationship around the payment transaction.
As the payments landscape continues to evolve and becomes increasingly
more crowded due to the arrival of payment entrants, especially in the mobile
payments segment, it will be that much more important for payment providers
to develop customer-centric offerings that promote loyalty, retention and
ultimately payment spend. Loyalty driven mobile payments products could be
that answer. It’s now more important than ever before for companies to set
themselves apart from competitors. To do so, companies need to have a solid
grasp of where the industry is headed. This is why market research should be a
vital component of any strategic decision.

This white paper contained just a glimpse of the content and analysis available
from Euromonitor International. Information for this white paper was derived
from the report The Mobile Wallet: How Loyalty Could Spur Consumer 
Adoption of Mobile Payments, examining the potential for loyalty to drive
mobile payments, which is available on Euromonitor’s website.

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http://www.amazon.ca/Social-Media-Marketing-Agri-Foods-ebook/dp/B00C42OB3E/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1364756966&sr=1-1

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