Labelling, packaging and the export fortunes of the agro-processing sector
Twice in as many weeks Agriculture Minister Dr Leslie Ramsammy has commented on what he perceives to be protectionist trends in intra-regional trade that are locking Guyanese products out of some regional markets.
In one instance Dr Ramsammy openly accused other Caribbean territories of setting up non-tariff barriers to Guyanese products being imported into those territories; in the second case he put the blame squarely on Guyanese consumers for providing what appears to have become a fairly sizeable market for plantain chips imported from Trinidad and Tobago in circumstances where locally produced plantain chips appear to be less favoured, at least with some consumers here.
As an aside – and this is an issue which Dr Ramsammy is well aware of – comparisons between the locally produced plantain chips and the brand imported from Trinidad and Tobago suggests that the primary marketing tool of the Trinidadians has been packaging. The packaging of the imported plantain chips is much easier on the eye than the locally produced option. And even if one might try to make a case for the local product based on taste or loyalty what we do know from global experience is that the seduction of packaging works because it represents the consumer’s first encounter with the product.
In fact, during a public forum a week ago, Dr Ramsammy dropped a none-too-subtle hint that in cases where manufacturers refuse to take sufficient cognisance of considerations of labelling and packaging, they run the risk of having their goods excluded from product displays on supermarket shelves, the result of which would of course be that those products would be limited to much smaller markets.
Much of the current fuss in the manufacturing sector over issues of labelling and packaging has come about over relatively recent discoveries regarding the nexus between presentation and access to external markets. When imported tamarind balls begin to appear on the local market, displayed in jazzy-looking packages which, up until now, we are unable to match, only then did it occur to us that – as far as items of manufactured foods is concerned it really is a waste of time to boast about product quality in circumstances where packaging and labelling are sufficiently unattractive as to discourage consumers from even giving your product a second glance.
Our rum and spirits manufacturers are probably the best examples of companies that have continually raised their labelling and packaging game; the obvious reason being that such measures are imperative if they are to withstand the pressures of a highly competitive international market. In these cases operating costs have increased significantly, though our manufacturers are only too well aware that there really is no other option if the demands of the market are to be met.
The challenge for our local agro-processing entities that run much smaller operations is obvious. Even those who have attended international trade fairs and secured limited export markets find the cost of labelling and packaging that meet international standards, onerous. So that some of our local agro-processors are stuck with a choice between placing strict limits on investments in labelling and packaging and suffering a measure of consequential market indifference to their products, or else, endure likely cuts in their profitability by investing more in labelling and packaging.
Since the overwhelming majority of our agro-producers are small operators with limited investment capital, budgetary allocations for labelling and packaging are modest and while the product display at the Guyana Marketing Corporation’s Guyana Shop reveals some instances of improvement, there is no doubt that Guyana remains considerably behind even some of the rest of Caricom in terms of our labelling and packaging standards.
Efforts to improve those standards locally have been confined largely to awareness seminars and examples of higher standards of labelling and packaging borrowed from other parts of the world. At the same time there is pressure from our local distributors and supermarkets for manufacturers to meet the demands of a more discerning consuming public. With the best will in the world, however, we know only too well that micro and small enterprises in the agro-processing sector are likely to face cost-related challenges in their efforts to enhance labelling and packaging standards in the immediate future. To these challenges, of course, must be added those associated with increasing safety and health-related considerations associated with exporting foods to North America.
To return to the imported plantain chips, the point should be made that changing consumer preferences, over the years, appear to have pushed considerations of ‘buying local’ to the back burner. Consumers are much more likely to be seduced by labelling and packaging which they tend – often erroneously – to associate with product quality. In essence, perhaps, Dr Ramsammy’s concern has to do with the need for both the government and the private sector to pay a far greater measure of practical attention to ensuring that packaging and labelling are recognised as integral components of the production process. The costs in training, equipment and machinery are likely to be considerable, but we really have little choice in the matter if we are to meet the ever mounting demands of the consumer.