Rapport nr - SIFO

Project note No.10-2006Nicolas FerrasAbout local food in the Frenchfood and agricultural marketOverview concerning network of production,safety regulation, Marketing conceptsand consumers' perception

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Project Note No. 10 - 2006Title Antall sider DatoAbout Local food in the French food and agricultural market- Overview concerning network of production, safety regulation,Marketing concepts and consumers’ perception-50Forfatter(e) Prosjektnummer Faglig ansvarligsign.Nicolas FERRASOppdragsgiverSIFOSummaryThis report is a presentation of the food system in France, from the producer to the big large retailers. In addition to some economicdata, some indications about the organisation of the producer's unions and about the French safety system are mentioned.The main part of this report is a diagnostic of the use of PDO/PGI and Official Signs of Quality by producers and also by foodindustries and the store brands, and few critics of some aspects of their use or of the labels themselves.The last part of this report is a description of the French research in marketing and tries to analyse the use of the words "tradition","terroir" to valorise those food products, and how those cues are used to sell "local food", to define a characterisation oftypical consumers of "local food".RésuméCe rapport consiste en une présentation du système agro-alimentaire en France, des producteurs aux consommateurs en passantpar les grandes marques de distributeurs. L’organisation des réseaux et syndicats de producteurs sont présentés par le biais dedonnées économiques du secteur. Le système sanitaire français souvent évoqué ces dernières années est aussi décrit, afin demieux comprendre son rôle. La partie principale de ce rapport présente une vue générale de l’utilisation des Signes Officiels deQualité et notamment des AOC et IGP, à la fois par les producteurs mais aussi les industries alimentaires et les marques dedistributeurs, agémentée d’un diagnostic et de quelques critiques apparues dans leur utilisation.Nous mettrons finalement en valeur les avancées de la recherche française dans le domaine du marketing, et toutparticulièrement dans la tentative d’explication de l’utilisation des termes « tradition », « terroir », utilisés en grande quantitépour valoriser ces produits locaux, afin de pouvori caractériser « le consommateur ».KeywordsLocal food, Label, Official Signs of Quality, France, Marketing, ConsumerMots cléProduits locaux, Label, Signes Officiels de Qualité, Marketing, Consommateur

PrefaceThis report was written as a part of my trainee assignment at SIFO, with Virginie Amilien asmy supervisor.From the beginning of May to the end of August 2006 , I stayed at SIFO, the National Institutefor Consumer research in Oslo, Norway, through an Internship agreement within theFrench Norwegian project “Consumers conceptions of Local Food” financed by the FrenchNorwegian Foundation.I would like to thank particularly SIFOs direction for giving me the opportunity to stay thereand having an enriching experience. I also would like to thank Jean-Louis Rastoin and FatihaFort for their comments and Khara Grieger for her wonderful editing work.Oslo, 30 august 2006.Nicolas Ferras

AknowledgementDr Virginie Amilien – Senior Researcher – SIFODr Fatiha Fort – Assistant Professor-Researcher – AgroM/UMR MOISAAtle Wehn Hegnes – SIFODr Anne Moxnes Jervell – Director General - SIFOEivind Jacobsen – Head of Research – SIFOPr Jean Louis Rastoin – Professor-Researcher – AgroM/UMR MOISAPr Lucie Sirieix – Professor-Researcher – AgroM/UMR MOISAPr François D’Hauteville – Professor-Researcher – AgroM/UMR MOISAKhara Grieger – LecturerFNS - Fransk Norsk StiftelseFrench Norwegian Foundation – Fondation Franconorvégienne

10Appendix ............................................................................................................................ 511. French safety regulation .................................................................................................. 511.1. AFSSA (French Agency for Food Sanitary Safety of food).............................. 511.2. DGCCRF (General Department for Competition, Consumption and FraudRepression) ...................................................................................................................... 511.3. DSV (Veterinary Services Direction)................................................................ 51

SummarySince the food crisis of 1996, French consumers have begun to be more concerned and interestedin the food processing processes and in the origin of the raw materials of food products.After these crises, consumers have been increasingly interested in product labelling since itguarantees product quality and traceability. The availability and resemblance of all productsin the same category to each other influenced consumers to find other criteria when purchasinga product.We use here the notion of “local food product” in its broad sense, which is typically a foodproduct linked to an identified location either by geography or by tradition (i.e. products usingSIQO like regional food, food with PDO - Protected Designation of Origin- or PGI - ProtectedGeographical Indication- 1 , small scale food etc). Currently, France produces manydifferent types of local food which are linked to the place of its production, obviously due topolitical decisions and territory diversity. However, the French signs of quality have been inlegislation for almost one century. Many regulations and legislations have been createdthrough product labelling which link the product and its manufacturing place of origin in orderto promote, protect, and defend these particularities.The French system of food certification inspired the European Union, which created andeuropean regulation about PDO (Product Denomination of Origin), PGI (Protected GeographicalIdentity) and TSG (Traditional Speciality Guaranteed) in 1992. Many other Frenchlabels underline the superior quality of food products, as for example the “Label Rouge”, theenvironmental protection label, about organic foods “AB”, the Certification of Product Conformity,termed “CCP” or the “Food from Mountain” label which specifies the particular originof mountain products as well as regional labels. The PGI (Protected Geographic Identity)and PDO involve around 120 000 producers in France, which represent more than 20 % ofthe total number of producers and more than 80% of the value created in the wine fields. Todayall the regulations concerning PDO, PGI and TSG (Traditional Specialities Guaranteed)are established by the European Union for all Member countries of Europe. Moreover, themanagement of these official signs of quality also pertains to their insertion in the WorldTrade Organisation (WTO). One goal for the European food sector is to extend the validity ofthese signs of quality world-wide. The demonstration of this goal concerning local food inagriculture since the beginning of the Cancun Negotiations has been to include these qualitysigns in its agriculture policy. The choice to use subsidies to transform agriculture from quantitativeproduction to qualitative production and to reduce direct subsidies linked to quantitativeproduction seems to be in agreement with the expectations of WTO. Promotion of localfood by the development of quality signs can be a means to try to convert European agricul-1 We refer here to the definition used in the French Norwegian project “Consumers conceptions ofLocal Food” financed by the French Norwegian Foundation and to the three official European signs:Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional SpecialityGuaranteed (TSG).

12ture to a qualitative production thanks to the allowance of producers to have financial compensationsdue to the valorisation by the consumer of labelled products.The last modification concerning the regulation of PDO and PGI occurred on March 20th2004. This new regulation simplifies the procedures of demand and also is completely compatiblewith the WTO. The new regulation published by the European Union is more restrictivein sanitary safety, surpassing previous expectations in this field.The diversification of offer and the reduction of production costs resulted in an increase ofthe number of products available to the consumer and in a demarcation of the use of differentlabels, but also in close cooperation with hypermarkets which develop their own signs ofquality. Today 34% of French farms produce more than one labelled food product, and in2001 43% of French consumers knew about Label Rouge, 18% about Organic Label and 12%about the AOC (CREDOC-INC 2001).The number of labelled products increased substantially after this period, which resulted in astrong diversification and in an apparition of specialized brand such as “Reflet de France”(Carrefour) or “Nos regions ont du talent” (Leclerc). The concept of « Terroir» store brandconsisted of regrouping of several regional specialties under a store brand, which is increasingdue to the French agro-food market. Some brands use a lot of marketing efforts to differentiatetheir products. Concerning the valorisation of the labelled products, some unions ofproducers also use this method.The communication around the image “Terroir” was a lot of used, since it seemed to reassureconsumers on the origin and quality of the product, perhaps reminding them the level of qualityof products in the past and using its nostalgia to valorise the product.As we could see in this report, marketing attempted to explain what the decompositions ofthis “Terroir” image are, and thus, to be more efficient and to adapt the advertising campaignto reduce the cost of them.

RésuméLa France produit de nos jours plusieurs types de produits locaux mettant en valeur la régionde production, pour des raisons d’origines politiques mais aussi de diversité des territoires.Mais les signes de qualité français furent créés il y a presque un siècle, pour promouvoir,protéger et défendre ces particularités. De très nombreuses législations soulignant le lienentre les produits et leur lieu de production furent instaurées de manière à protégerjuridiquement cette richesse culturelle .Dans ce rapport, nous utilisons la notion de produits locaux de manière très large, comprenanttout produit qui d’une manière ou d’une autre possède un lien géographique ou traditionelavec un lieu donné, tels les produits certifiés AOC, CCP 2 . La certification de la qualitéalimentaire par les labels inspira l’Union Européenne, qui créa le PDO (ProductDenomination of Origin) en 1992. Beaucoup d’autres labels français mettent en évidence laqualité supérieure des produits alimentaires, comme par exemple le « Label Rouge », le labelconcernant le respect de l’Environnement, le label « BIO » « AB, Agriculture Biologique », «La Certification de Conformité Produit, CCP » le label « Montagne », qui réfère à uneproduction se réalisant en altitude, ou encore les « Labels Régionaux » qui renvoient à larégion administrative de production. L’IGP (Identification Géographique Protégée = IGP /PGI) comme l’AOC (Appellation d’Origine Contrôlée, AOC = PDO) concernent à peu près120 000 producteurs en France soit plus de 20% des agriculteurs professionnels et plus de80% du chiffre d’affaires du secteur Viti-vinicole. Aujourd’hui la réglementation concernantles AOC, IGP et STG (Spécialité Traditionnelle Garantie) est sous le contrôle de l’UnionEuropéenne, non seulement pour la France mais pour tous les pays Européens. De plus, lagestion de ces signes officiels de qualité concerne aussi leur insertion dans l’OMC pour leurgarantir une protection mondiale et non plus européenne. La motivation Européenne pourvaloriser et protéger les « produits locaux » est particulièrement visible depuis lesNégociations de Cancun acceptant l’inclusion des signes de qualité dans la politique agricolemondiale. Afin de satisfaire les obligations imposées par l’OMC, l’attribution des aides etsubventions à une agriculture extensive plutôt qu’intensive a été décidée avec l’apparition dela Politique Agricole Commune du Second Pilier, concernant le développement local et laprotection de l’environnement. La promotion des « produits locaux » par le développementdes signes officiels de qualité peut s’avérer un moyen de convertir l’agriculture européennefortement quantitative en une agriculture plus qualitative, et d’assurer aux producteurs unemeilleure valorisation de leurs produits grâce à une plus-value.La dernière modification de la loi concernant les AOC et IGP datant du 20 mars 2004 ,simplifie les procédures de demande, affermit les réglementations en matière de sécuritéalimentaire et d’augmentation des exigences.Dans les supermarchés et commerces de proximité, l’abondance, la disponibilité et laressemblance de tous les produits alimentaires d’une même catégorie obligent les2 Nous nous réferons ici à la définition commune du projet franconorvégien “Consumers conceptionsof Local Food” ainsi qu’aux trois signes sofficiels européen : Protected Designation of Origin (PDO),Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG).

14consommateurs à trouver un critère de choix, voire une motivation pour prendre leur décisiond’achat, notamment en ce qui concerne les produits de « terroir » souvent plus chers que lesproduits dits « standards »…Cette augmentation de l’offre en produits de « terroir » ainsi qu’en produits sous Signesofficiels de Qualité résulte en grande part des différentes crises alimentaires apparues depuis1996. Conjoncture et médiatisation aidant, le consommateur fût plus enclin à s’intéresser auxprocédés de fabrication et à l’origine des matières premières alimentaires. Certainsconsommateurs sont intéressés par les produits labellisés, non pour l’assurance d’une typicitémais plutôt pour la reconnaissance d’une qualité et d’une traçabilité clairement certifiées. Lepouvoir d’achat et l’intérêt guidant ce nouveau groupe de consommateurs diffèrent de ceuxdes consommateurs originels de produits de « terroir » ou labellisés, qui les achetaient pourleur saveur et étaient conscient de la valeur de cette exclusivité de goût. Le consommateur àla recherche de qualité certifiée aurait plutôt tendance à penser que la qualité ne doit pas êtreà l’origine d’un surcoût, mais doit être accessible à tous… Il semble finalement qu’à la fin deces crises alimentaires, la majorité des consommateurs recherchaient plus dans les produitslabellisés la garantie de la sécurité alimentaire que leur goût typique.La diversification de l’offre et la réduction des coûts de production entraînent uneaugmentation du nombre de produits disponibles pour le consommateur , et une fortedifférence quant à l’utilisation des Signes Officiels de Qualité (SOQ) créant un intérêtnouveau des Grandes Surfaces, qui ont développé leurs propres signes de qualité, ce quirésulte dans l’apparition de marques spécialisées dans ces « produits locaux » comme «Reflets de France » ou « Nos régions ont du talent ». Le concept des marques de distributeurs« terroir » consiste à regrouper sous une même marque de distributeurs plusieurs spécialitésrégionales, ce système s’implantant rapidement dans le marché Agro-Alimentaire Français.Aujourd’hui 34 % des exploitations agricoles françaises produisent au moins un produitlabellisé, et en 2001 une étude a démontré que 43% des consommateurs françaisconnaissaient le « Label Rouge », 18% le Label BIO et seulement 12% l’AOC (CREDOC-INC, 2001).Pour réaliser leur différenciation par rapport à leurs concurrents, les marques utilisent lemarketing, qui est aussi, à une autre échelle, employé par des syndicats de producteurs pourvaloriser leurs produits. L’utilisation de l’image « terroir » constitue l’un des piliers de lacommunication marketing, car elle semble rassurer le consommateur qui cherche l’origine etla qualité, lui rappelant par la nostalgie, la qualité des produits d’antan. Le marketing essayede comprendre et de décomposer l’image « terroir » pour être plus efficace, tout en adaptantles campagnes de publicité et en réduisant leur coût.

1 Introduction“We cannot govern a country with more than 258 different cheeses” said Charles De Gaulle.France has occasionally appeared as a reference for food and food culture. This reputation,mainly attributed to the wine and cheese sector and also by the lifestyle to produce theseproducts, allows France to be the second leading exporter of food in the world. The structureof the food sector is paradoxical enough with large distributors (i.e. Leclerc, Carrefour, SystemU) as well as an omnipresence throughout the country of small stores, butchers, bakersand other open markets. The second main characteristic of this food sector is the wine sectorand its power, taking into account the economics or number of producers. Historically andculturally, wine is a pillar of the French lifestyle and tradition.The diversity of production between the small local producers and the large distributor brandsmust be considered in an analysis of the French food sector. This variety of food products,thus, led and in some ways obliged France to protect this product diversity and richness.France has a strong industrial and service sector, with less than 6 % of the national turnovercreated by the Agricultural sector, despite the fact that the agricultural power is still relativelystrong and often represented in the European Union (EU) for agricultural support. However,to produce food products, one does not only need Agro-food companies but also producers.Therefore, this is the reason for realising a sectoral description in order to understand themechanism of this part of the French economy. To further understand this food sector, thisstudy investigates every dimensions of the sector, from the production to the commercialisation,pointing out the exchange and the link between each step of the sector. This report presentsan description of the French food sector as well as the main official signs of quality,detailing the type, management, and policy. Then, the new local marketing is taken into considerationfollowed by an identification of the local food consumers.First, the French food sector is difficult to initially characterize. Indeed, it is a very old sectorwith an implication of food in most areas of the French culture, although there have been recentmodifications due to the food crisis of the 1990’s. The organisation of the production,distribution, and commercialisation was totally renovated, due to new consumer expectationsas well as from changes to National and European regulations. Sanitary regulations, managedby the French sanitary system, required important improvements in the condition of production,manufacturing, and distribution processes. These adaptations are also a result of newconsumer expectations. Currently it is possible that Consumers want much more assuranceabout the safety of products as well as about price or taste maybe in a lot of part influencedby media and their mediation of food crisis... In order to answer to this new consumer demand,the number of labelled products exploded, ensuring quality and traceability. The applicationand management of those official signs of quality can be quite complex, since they aregrouped according to time, companies, producers, agricultural unions in a limited territory.National committees organise this attribution of labels, PDO or PGI. However, the complexityand the time needed to create an appellation result in the current prestige of those officialsigns of quality. PDO and PGI, edited by EU, are excellent tools for rural development, andsince one aim of the EU is to transform its agriculture towards a qualitative one, the use ofPDO and PGI also improves the valorisation of farming products. Official signs of quality,

16particularly PDO and PGI, may be a means to unite producers and local companies in acommon project around a typical local food product. One interest of the quality signs is tocreate a “micro-economy” in local and rural territories, thereby establishing positive changein some rural territories which have declined for 50+ years and contributing to “rural drain”.Second, we cannot expect that the food sector for local products is simply only from producerto consumer. Alternatively, the local food sector is just as complex as the regular food sector,and may be more complex in some cases. Originally, the local food sector was a descendantmarket, that is, from producer to consumer where the products were produced and then chosenby consumer. This type of distribution still occurs in the direct market, open market, marketsat farm stands, and even in small stores like a butcher or baker. During the last 10 years,new distribution methods have appeared with an entry in the local food market of big distributorbrands, such as the creation of the very well known “Terroir” store brands in France.The main evolution in the last 10 years has been the appearance of big “store brands” with anational or international area of commercialisation concerning local food markets. Thechange in consumer expectations and attempts to identify the “real” consumers of local foodis resulting in a new science, termed “local Marketing”, and a new approach in the food sector,which is an ascendant interpretation from consumer expectations to the producer. Theaddition of a management science in a part of traditional agriculture may appear paradoxical,but as revealed in this report, marketing can bring new tools to improve and extend the diffusionof those local products and raise their valorisation.

2 Agro-food industry2.1 Presentation of French food sectorAs of 2004, the food sector in France is composed of approximately 600 000 producers, 10 000 foodcompanies, several hundred thousand small shops (butchers, bakers, etc.) and 250 000 restaurants.In addition, six main distributors make 90% of the food trade with hyper and supermarkets, wherethese hyper and supermarkets account for more than 80% of the global food sales (Figure 2.1).With regards to the food companies, 90% of them are relatively small with less than 20 employees.Type of Market (2001) Turnover (billions €) % of total market Annual growthMass Market 94 75% 0-1%Health products Market 6 5% 15-20%Terroir products Market 25 20% 5-10%Total 125 100% 1-2%Figure 2.1: French food market (Rastoin, 2001)In the economic food sector, local food represents 20% of the global food market with a very importantgrowth. However, half of these 20 billion turnovers is within the wine sector. The French foodmarket is still a mass market with 75% of the global turnover (Figure 2.1).2.2 Local Food sectorIn this report, we use the notion of “local food product” in its broad sense, which is typically a foodproduct linked to an identified location either by geography or by tradition (i.e. products using SIQOlike regional food, food with PDO - Protected Designation of Origin- or PGI - Protected GeographicalIndication- 3 , small scale food etc) 4 .In 2004, there were 884 brands registered by the INPI (National Institute for Intellectual Protection),which is 20% greater than in 2001.This sector has exploded since the beginning of 2000. The local3 We refer here to the definition used in the French Norwegian project “Consumers conceptions of Local Food”financed by the French Norwegian Foundation and to the three official European signs: Protected Designationof Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG).4 This is further discussed in Amilien and al 2006, page 2

18food sector is very difficult to extend, however, generally due to the fact that the main companies involvedare quite small; incorporating them in an union or organisation is difficult, although it is theonly means to reduce the cost of promotion and to be competitive in this mass market. Individualismand the lack of innovation are the main characteristics of this sector. To develop these small local foodcompanies, owners have to develop networks with other companies to create new organisations fordevelopment and to have a counter-power against the main distribution brands. (Rastoin JL, 2001)Therefore, only companies which are profitable in this sector are innovating companies. Innovationseems to be a bit paradoxical when you mention tradition and old culture for local products, but theinnovation of packaging and especially the sale location will be the foundations for the profitability ofthis type of company.These companies were also successful since they understood that consumer needs are in “contact”with the producers. This underlines and explains why only small companies make local food. It is impossibleto have an international brand making local food for consumers. In some companies likeRaymond Geoffroy with regards to “la brandade de morue de Nîmes” or Marius Bernard “la bouillabaisse”,consumers can directly visit the company and discover how the product is produced. In thisway, it resembles the close proximity which is possible when one can visit production on a farm, forexample.(Rastoin JL, 2001, 1999)Producers are more affected and involved with the process of labelling than transformers or distributors,who generally are not compatible with the policy of CCP, which is more adapted for supply chainthan production.2.3 The Terroir companiesThree main types of manufacturing of local food exist. One type involves manufacturing directly bythe producer, which often lacks labelling since in most cases it involves a direct sale on his/her ownfarm or in a cooperative. This producer may discuss and ensure the product and its quality to the consumer,as opposed to conventional quality-assurance methods represented by the Official Signs ofQuality. Currently, there are more than 120 000 producers who manufacture a PDO or PGI product,which represent approximately 15% of the professional producers in France. However, it is also possiblethat there are a lot of other producers of local food who are not using appellations, making it difficultto know the real number of producers who directly sell on their farm without the Official Signs ofquality.The second type of manufacturing involves organisation within a Union of producers which also managesthe product’s commercialisation (i.e. Roquefort PDO). This organisation with an administrationboard can be a means to counter-balance the power of distributors when the products are not sold bythe producers themselves. It also manages advertisement with a common budget, as well as future orientationsfor the appellation or products.Finally, local companies may also manufacture local food, with local or regional area influence (territorywhere the raw materials are bought). However, these companies may also produce products forstore brands, which explains why some local companies have increased their production capacity sincethe introduction of these store brands.

Agro-food industry 192.4 Terroir® store brands and “Reflets de France”The concept of Terroir® store brand (“labeled product”) is increasing on the French market. Thisbrand uses several regional specialties which are regrouped under a main store brand which respondsto restrictive specifications (Fig 2). Each retailer then establishes contract with a SMC (small and mediumcompany) in the origin production areas. In general, store brands are very difficult to classifysince they do not directly manufacture a product, but rather they can purchase the product at smallercompanies or unions of producers and ensure the product’s commercialisation in their hyper markets(Lapoule,).ConsumerStore brand = guarantees of origin,quality and a good qualitypriceManufacturerScale economyKnow-how valorisationMarketing and relationalcompetencesDistributorProfitabilityDifferentiationFigure 2.2: Decomposition of a Terroir Store BrandAs of 2004, the “Reflets de France” is composed of 300 food references (67% of fresh products, 24%of groceries, 9% of liquid), which equals a turnover of 315 M€. Eighty percent of the partners aresmall or medium size companies of less than 30M€ of turnover. This brand is distributed in more than3500 different places nationwide. In addition, “Reflets de France” brand is also developed in otherEuropean countries and labelled “Made in France”. Each month, all commitments concerning theseproducts are negotiated. Carrefour, owner of this brand, helps small companies invest in productionand establishes multi-year contracts with them. “Reflets de France” is also a partner of the French cultureMinistry.Store brands give consumer three guarantees: origin, intrinsic quality and extrinsic quality (Fig 3).

20Capacity toanalyse themarketSuccess ofTerroir®store brandCapacity to commercialisequalityproductsCapacity to organisepartnerships withproducersFigure 2.3 Competences needed for Terroir® store brandCurrently, there are still not any leaders in the local food market, and it is still an important market thatis open. In order to evaluate the success of these store brands in the local food market, a more specificanalysis of Lapoule (Negocia) reveals three important factors, shown in the previous diagram (Fig 3).In conclusion, those involved in the manufacturing are the local producers themselves or small companieswho use local raw material normally produced by local producers to be in accordance with thespecification of the label or the appellation.The increased level of power associated with the Terroir® brands can be frightening. This explainswhy networks like “Bienvenue à la Ferme” - “Welcome to the farm” – are created and supported bythe Agricultural Chambers. Through this national network, product quality is guaranteed, and also developsa means of communication and regulation to protect the use of words “farmer”, “farming” and“peasant” by an association with the FNAPF (National Federation of Associations of Farming Producers).2.5 ProducersFrance, with more than 660 000 farmers, is the second largest exporter of food products in the agriculturalworld. Many producers are not professional, and therefore they may have another job in additionto small food production. Moreover, a lot of retired farmers continue to be involved in a productionactivity. French producers may be members of different organisations complementary to their professionalactivity. The majority of this population is between 40 and 60 years old. Newer generations arenot interested by this type of job, as it is not very valuable and typically lacks a high-income salary inour urban and modern society. To defend and ensure the durability of their job, producers are organisedinto unions or associations. The first goal of those groups is to reduce the falling number of farmersto influence the global policy and finally try to improve the value of their products. The two mainorganisations where producers are presents are The Producers Unions and The Agricultural Unions.

Agro-food industry 212.5.1 The Producer UnionThe Producers Union is an association of producers who wants to develop a common project and oftentries to give value to their products with solidary action. The aim of this union is linked more to thecommercialisation or the promotion than other unions, which typically do not have any policy role orrepresentation in a council, are totally autonomic. The most famous of these unions called “Bienvenueà la ferme” - “Welcome at farm”- was created by the Departmental Chamber of Agriculture to supportand help farmers to develop tourist activities on their farm, such as Bed and Breakfasts or restaurants.The brand “Bienvenue à la ferme”, since this name is registered like a brand, brings to the consumeran assurance of quality and control. This is not a label, but the policy of this union includes privatecontrols since every member has to sign the quality charter to adhere to this union. Currently, differentactivities are managed for its members like the “producer open market”, “farm open market” and thedevelopment of tourist-run activities to make visiting the farm interesting.2.5.2 The Agricultural UnionsThe Agricultural Unions are “the political parties” in agriculture. Their goal is completely differentthan the one of the Producer Union. The aim and the role of this union is to represent the producermembers in an administrative councils of the state (Chamber of Agriculture) or in private organisationand union of producers, for example, in some companies. These political organisations are managedlike typical political parties, with a national management and a central direction with offices spread onall territories. You can be a member not only in a Producer Union, but also in an agricultural union, asa citizen member of a political party and at the same time with an association.

3 French Official Quality SignsThe creation of “AOC” in 1919 for wine was a means to point out the typicity of the different Frenchwines. The extension of this system and the opportunity to ask the AOC occurred in 1935 for cheese,such as the establishment of the INAO, National Institute for the labels of origin which has beengranted to all farming products since 1990. The Ministry of Agriculture and Fishery has contributed tothe emergence of a Community system for the protection of the quality products that was materializedby the setting up of the Protection of the Designation of Origin (PDO) in July 14th 1992, the Protectionof Geographical Indication (PGI), the Traditional Specialities Guaranteed (TSG) and also by theestablishment of an European regulation about the organic mode of production.On January 3rd 1994, a French law confirmed the principles which will allow the application of thisEuropean legislation: only the AOC can claim to be transformed in a PDO or AOP. The AOC indicatesa product originating in a determined place, whose characteristics are due exclusively to thisgeographical environment. The National Institute of the Labels of Origin (INAO), the public administrativeestablishment, proposes the recognition of the PDO and ensures the control and the approval ofthe products profiting of a PDO. PGI indicates a product originating in a specific area, as well as of itsquality, and a reputation or another characteristic perhaps allotted to its origin. The production and/ordevelopment takes place in a definite area. PDO and PGI privilege the link to time in the criteria ofattribution. To have this appellation, the product must have a reputation made by history. (Bérard &Marchenay 2004, p.59).The national label is indicated under the term "Label Rouge", of which the name and collective markis property of the Ministry of Agriculture and Fishery. The presence of the Label Rouge (created bythe Agricultural Regulation in 1960) attests that the product is of a higher quality and that this qualityis directly perceptible by the consumer.Label Rouge, PDO or PGI do not concern only food, but also all agricultural products like seeds orgrass, for example.

24Figure 3.1: Table LabelPDO in 2004 # of PDO # of Part of the % of the#Farms production total valuePGI in 2004 of PGI# of FarmsWine 470 75 000 43,00% 81,00% Poultry 31Cheese45 30 000 17,30%Fruits andvegetables14Other products 32 10 000 Sheep meat 6Olive 11 15,00% Milk 5Fruits and vegetables 9 Bovine meat 5Meat 5 Pig meat4Honey 2 Salted meat 3Condiments 1 Fish2Fodder 1Baker's products2Essential oil 1 Cider2TOTAL 547 115 000 Honey2Pasta1TOTAL 78 25 0003.1 Attributions of labels and appellationsFor more than thirty years, the Ministry of Agriculture and Fishery has held a policy to promote andrecognize the quality of foodstuffs due to food know-how, which is definitely a part of a cultural inheritancewhich should be identified and valorised. In order to do this, the Ministry of Agriculture andFishery has set up a system of official quality guarantees (i.e. Label Rouge, Agriculture Biologique,Certificat de Conformité) issued after advice from the National Commission for the labels and certificationsof agro-food products (CNLC), for which it ensures the secretarial work.The CNLC is composed of three sections:- “Examination of the referential”, which advices on all specifications and labelling, labels,CCP, protection of geographic indications and certificate of specificity.- “Organic agriculture”, which advises on specifications about the organic mode of productionof animal products and products of animal origin, and on the projects of regulating organic agriculture.- “Registration for the certification bodies”, which advices on registration requests of certificationbodies who issue a label, the certificate of conformity (CCP) or the organic mode of promotion(AB).Each section is composed of boards which ensure the representation of all the protagonists impliedwithin the certification: producers, agricultural inputs and food suppliers, process-makers, distributors,manufacturers, consumers, administrations. More over, this Ministry also takes part in the policy forthe protection of the registered designation of origin (AOC, PGI), and the National Institute for thelabels of origin (INAO) is in charge of its recognition. To apply for PGI or TSG you must have a LabelRouge or a CCP before you can apply for a PGI or a TSG. (Bérard & Marchenay, 2004, p.51-54)In the case of the Label Rouge, Regional Label or PGI, the professionals must initially create an interprofessionalstructure called "grouping". The grouping works out a schedule of the conditions andchooses an organization certifier. All labels and PGI are evaluated by the CNLC (The National Commissionfor the Labels and Certifications of Agro food products). Before attribution of a Label Rouge,a sensitive analysis is required. It is only the quality signs which introduce taste as an essential parameterfor the products in its definition.

French Official Quality Signs 25For a label or a CCP, the specification of the product is submitted to the expertise of specialists, andthen examined by the section “Examination of the referential” of the National Commission for the labelsand the certifications of agro food products (CNLC). In the case of the Label Rouge, the scheduleof conditions must show the level of higher quality of the product and is accompanied by the results ofthe tests of tasting. For the organic mode of production (AB), the specialisations of the product issubmitted to the expertise of specialists and then examined by the section “Organic Agriculture” of theCNLC. For PDO, the INAO is competent for the recognition of the AOC with the delimitation of thegeographic areas of production and registration (Figure 3.1). For PGI, the grouping works out twoschedules of conditions: one to show the level of quality of the product (higher quality in label, specificcharacteristics for the certification of conformity CCP) and the other to show the bond in thegeographical origin (Figure 3.2).Today in France, there are 23 certifying organizations which have an activity in Label and PGI. Theyare all approved and accredited. All the certifying organizations must be approved by decree of theMinistry for Agriculture and Fishery and the Ministry in charge of consumption. This approval is allottedafter an opinion of the section "approval of the organizations certifiers" of the CNLC. For PGI,the accreditation and approval are supplemented by a convention of control passed between the INAOand the organizations certifiers.

26Figure 3.2Demand of PDO by union ofproducersINAO servicesNational committee with the nomination of a study commission composed by membersof National Committee, by professionals (out of the region involved)(This commission goes to region and interviews producers)Revision of a report with some orientations concerningconditions and areas of productionNational Committee(presentation of the report)Decision concerning the attributionNomination of a delimitation CommissionReportsNational CommitteeApprobation of the delimitation by expertsTransmission of the proposition of regulation to the Ministerand publication in the “Journal officiel”Fig5. Procedure to ask a PDODemands by the Ministry of Agriculture and Fishing(Study of admissibility)CNLC-SOC(Control plan)CNLC-SER(Sign of quality)INAO(PGI)Favourableadvice of theSOCFavourableadvice of theSERFavourable decision ofthe National Committeeof PGIReturn to the Ministry of Agriculture and FishingDecision and sending of the PGI to European Union for registrationSOC: agreement section of certificatory organismsSER: Referential exam SectionCNLC: National Commission of Labels and certifications for Agro-food productsFig6. Procedure to ask a PGI

French Official Quality Signs 273.2. Reduction of the diversity of labels by the French Government to preventcredibility lossTo prevent a total loss of consumers between all these labels, French regulation has forbid the creationsof new “Regional Labels” since 1994. Only 6 regions have been allowed to keep their “RegionalLabels”, and the others which have requested one have been redirected through an equivalent, the associationof a “Label Rouge”. Then, a PGI can guarantee the same quality and the typicity of the foodproduct. This reaction points out the comprehension by the national authorities of the dangers createdby an ‘out of control’ increase of label types.3.3. Wine: French particularityIn the agricultural sector, France differs in comparison with other agricultural countries like the USAby the power of its wine sector. Agricultural areas used for wine represent more than 1,74% of theFrench territories (3,23% of agricultural areas) as well as more than 53% of all agricultural areas in2004. Wine does not require large areas, but represents an important part of the agricultural economy.The wine sector creates more than approximately 15% of the agriculture richness annually (Figure3.3).Figure 3.3: Economical table labelData of 2004 10 6 € % of total productionAgriculture 57468Vegetable production 32463 56%Wine (part of vegetable prod) 9495 29%PDO wine (part of wine) 7792 82%Wine producers have significant power in the orientation of Appellations, and especially of PDO.Many producers are members of a PDO union, with 470 PDOs (Total PDO’s = 547), which represent43% of the wine quantity produced. However, this 43% of the production represents 82% of the valuecreated by wine producers. Having an appellation seems to be very profitable for producers, but thisobservation does not concern all vineyards. Very famous vineyards like Bourgogne, Bordeaux, havenever mentioned PDO in their communication, and they prefer a medal in a competition, for example,than a PDO. We could then think these regions do not need to have a guarantee of quality: their reputationis stronger and older than this one of PDO. However, the use of PDO allows the protection ofthe name and guarantees producers that nobody can make Bordeaux in another part of Europe.The use of PDO in the vineyard of Languedoc-Roussillon is a totally different scenario. Roussillonvineyard was a mass vineyard for the blue collar workers of Northern France until 1980. The onlything which interested the large group-owners of vineyards in this region was to produce quantityrather than quality. However, the consumption of wine has evolved in France with a diminution since1980, as consequences of road security repression and also a new desire not for quantity but for thequality. This is the reason why some producers began to change vine plants to produce quality. However,the tradition of production has influenced consumers for a long time, and it was difficult for producersto communicate about the quality in Languedoc-Roussillon because of consumer perceptionsabout this vineyard which was negative and only linked to quantity.To change this vision and underline the quality of their products, producers started to create a PDO.They wanted to use the vision of quality from PDO to change the perceptions of consumers concerningtheir wine. This is the explanation why producers of Languedoc-Roussillon use more PDO, which

28is mentioned on every bottle, than producers of Bordeaux or Bourgogne, consequence of past and traditionof production. Today the vision concerning Languedoc wine starts to change even if the productionof quality has begun since 1980, and this vineyard is regularly in the middle of a large crisis withreduction of vineyard area. Only producers who changed their production towards a quality production,and not quantity, can have a profitable company today.3.4. Critics of PGIOne problem of PGI is the lack of strict definition and clearness. Only a particular quality, reputationor another characteristic is necessary to obtain it. The danger is to know what exactly a reputation is. Itseems to be completely different than the short recognition realised by a good campaign of advertising.Today the delimitation of a PGI area is, in most cases, functions from the economic reality morethan the traditional area, typical production or localisation of producers. PGI is born where there wasan economic production to sustain it, and it seems to be a tool for rural development. (Bérard &Marchenay, 2004, p.77) The lack of adaptation of PGI for the small producers, many of whom havedifficulties making their production or manufacturing place meets sanitary norms, indicates an immediateneed for change. (Bérard & Marchenay, 2004, p.137)PGI is influenced by the label or CCP needed in association to have a very high level of sanitary quality,which is in some cases impossible with the traditional know-how. It is resulting in a standardisationof the products often manufactured by companies rather than by the producer himself. This highcost to put all the equipment in norm is resulting in a disappearance of small producers and a manufacturingindustrialisation of PGI. Also concerning the association with Label Rouge, PGI appears in asecond time for consumers, the notoriety of Label rouge reduces the effect of Appellation. Consumersare more familiar with Label Rouge than PGI. The association with Label Rouge is better for PGI thanwith CCP, since Label rouge is more well-known than CCP, even if the cost of CCP is lower.3.5. Labels and local speciesLabels are often accused of reducing the diversity by strict regulation. However, this seems like a generalisationbecause the use of seeds or local varieties is managed differently between quality signs, forexample. PDO allows the use of local seeds, multiplied by producers themselves, like bean seeds forthe PDO Haricot Tarbais. For Label Rouge, CCP and PGI, it is a totally different situation. Producerscan only use registered seeds or species in the definition of Appellations or labels. (Bérard &Marchenay, 2004, p.96) In the definition of Appellations, one of their goals concerning species is toprotect the biodiversity, for example, by facilitating the protection and the use again of old and localraces. (Bérard & Marchenay, 2004, p.98-99)3.6. Appellations and rural developmentPDO can be a tool for rural development federating producers, allowing environmental and economicaldevelopment of the area. Local races valorised in a PDO are always linked to a typical social organisationof producers. This explains that when local races are protected, the social organisation ofthe territory and the local economy are also protected. The reintroduction of local races can also be ameans to promote Appellations since producers can communicate a lot about their tradition and thetypicity. Local species represent a passport or an identity tool for a specific area.

French Official Quality Signs 293.7. Private signs of qualityFor producers who want to organise themselves with a quality sign, there is another possibility to improvetheir sales: the creation of a local label, with its proper rules of organisation and quality. This istotally opposed to the Official Quality Signs, because local labels look more like a brand than an Appellationor a Label Rouge. Producer members of a local label organise themselves on the control ofquality, and thus, there isn’t any official insurance concerning the respect of the rules, even if theselocal label are supported by the European program LEADER for the rural development.Labels and Appellations seem to appear like a perfect means to promote rural development, helpingagriculture and changing the means of production to satisfy the obligations of WTO concerning directsubsidies. This vision wouldn’t be totally true without underlining the recent modifications in theregulation of European Signs of Quality. Nowadays, France does not manage PGI, PDO or TSG:Europe regulates them instead. The policy of the European Union seems to be increasing the expectationsof sanitary safety. Producers and companies are obliged to make a lot of modifications in theirproduction or transformation infrastructures. This cost is already high for big companies, and thereforeimpossible for small producers. That is the reason why some producers begin to leave Appellations.For French producers, there is incomprehension about this modification of the Appellation regulation.They have a lot of problems understanding how these regulations, which were formerly designed tohelp small quality producers, can be transformed by Europe in a new means of creation of a monopolyin the food sector with big industries.

4 Management and Costs of Official Quality Signs4.1. Management of labels and appellationsAdministration boards for each appellation or label is composed of producers, transformers and distributors,but the presidency is made by the producers and transformers for CCP. This represents thetwo different philosophies of these two groups of quality signs. Finances also defer between labels/appellationsand CCP. Labels/appellations are principally financed by contributions from producerunion members (64%) as well as by national departments and regions. On the other hand, CCPis financed mainly by sales, other allowances and through European financing, and contributions byproducers only represent 7% of the budget.The exact goal of the PDO is very important to identify, and is often a subject to debate. For example,some members of a PDO envision a means to protect certain areas, old methods and tradition. Thesepersons are often producers who want to work in a traditional way, keeping an area like a sanctuary oftradition. On the other side, other members have a vision of a PDO as an economical means of development.In a same union there can be both of these visions: the first one supported by producers andthe last one supported by companies using raw materials from the producers. Sometimes the importanceof brand members of a PDO can be superior in term of notoriety. It is possible that a brandmember of a PDO is more well-known than the PDO, which was created before the brand. The area ofnotoriety of a PDO is often smaller than this one of a national brand when the owner of this one is alreadya national company or a well-know one.An example of PDO-Ossau Iraty (Cheese of South West) and the brand Etorky:This opposition appeared in the management of the PDO Ossau-Iraty between conservative producersand the big cheese group Bongrain, owner of the brand Etorky. This conflict on the use of new manufacturingtechnologies by Bongrain resulted in its departure of the PDO. Bongrain preferred to keep itstechnologies, allowing it to produce a cheese adapted to consumer desires. Bongrain preferred to alsocommunicate on its brand Etorky more than on the PDO 5 . This choice resulted in a considerable successof this brand, surpassing that of the PDO.4.2. Price policyIn most cases, price is parallel to both the reputation and prestige of a quality sign. The most famousbrand also has the most expensive PDO. Label Rouge is the second most expensive than PDO, whilethe last one is CCP( Agreste Primeur, N°128, May 2003). We should also remember that some brandsare more expensive than the “equivalent” labelled product. One example of this involves the Etorkybrand of Bongrain Group and the PDO Ossau-Iraty 4 . In general, the price of a PDO is approximately30% (INAO 2006, 23% concerning wine) more expensive than a Label product. The arrival of Ter-5 Extracted from Valor 2006, organised by Dr. Pascale Maizi, CNEARC.

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

34products sold with a CCP or a label as a sign of quality, there is a national area of diffusion as well asdiffusion within hyper markets (82% for CCP and 50% for labels). Small shops are the second mostimportant places of commercialization for labels, with 36% of sales (Agreste n°79, 2005).The sales of PDO are more international, with approximately 10% for the EU and 10% for all othercountries. In addition, PDO, opposite to the other signs of quality, can be sold not only in supermarketsbut also in open markets or in small stores. This is the result of improvements in safety quality ineach product. This also guarantees product quality, resulting from the brand’s reputation and numerouscontrols organised by the French control services (DSV, DGCCRF).

6 Promotion6.1. AdvertisingThe means of promotion for each quality sign are principally leaflets and flyers directly in the salesplace, like a supermarket. However, PDO also uses more written media than the other signs of quality.For example, 2/3rds of managers used advertising for the promotion of PDO and labels. Furthermore,less than half of the persons in charge of a CCP used it. Advertising seems to be more and more important,shown in the rise of the number of quality signs. However, even if a PDO is well-known byconsumers, it still does not insure a total commercialisation of the products. Arguments employed byeach quality signs are different. For instance, appellations like PDO or PGI mainly use typicity andtraditional quality, as well as geographical origin and taste. The policy of labels is principally axed ongeographical origin, typicity and tradition, and then finally on taste. In the study of Agreste n°128,PDO use is based principally on tradition and typicity in their communication policy and labels thegeographical origin. On the other hand, managing the promotion of CCP is totally different becausethis label is principally to ensure sanitary quality; not only an insurance of safety quality of productionbut also of manufacturing. Furthermore, it refers to the geographical origin and as well as the traditionand typicity.Only Label Rouge uses arguments which seem different to its first prerogative. For instance, LabelRouge principally uses taste and not origin for communication purposes, while PDO uses more originthan tradition to be totally in coherence with the definition of these quality signs. However, for appellationslike “Champagne”, “Poulet de Bresse” or “Roquefort”, it seems to be logical to further promotetradition than origin, since origin is well-known to most people. For Label Rouge, it also appears normalto use origin for communication, since many of them are old regional labels, often created before1994. Except the organic AB Label, no label promotes the environment, which is often in the definitionand prerogatives of their label or appellation. 6The use of a logo for a quality sign concerns only 2/3rds of products and half of PDOs. Wine producersoften prefer the mention of an agricultural competitive examination medal rather than a PDO.6.2. The Terroir® imageMarketing strategies have tried to break down the Terroir® brand into different attributes in order tounderstand the main attributes which attract consumers. François d’Hauteville (2006) defines the conceptof Terroir® and typicity in its marketing. Terroir® seems have three parts. The first one is a tangiblereference to an agronomical-geographical area (climate, soil, etc), while the second part is intangibleand refers to know-how. The last part is an historical reference. These three characteristics definethe typical production places for Terroir®. In addition, Fort and Fort (2006) have also analysed the6 More information in Amilien, Ferras, Fort, 2006

36image of Terroir. They decompose it in two parts: geography and culture-history. This analyse is similarto that of D’Hauteville and Sirieix (2005), who present Terroir as a combination of geography,trade skills and time-culture. However, Sirieix brings new information concerning this analysis of Terroirimage, since she suggests that the main factor of definition for consumers is time and culture.These three analyses of Terroir point out the fact that this typical word is very difficult to define inorder to agree on consumer expectations. It is interesting to compare these diagnostic analyses in orderto compare the reasons product choice by consumers.In a study by the Centre of Research for the Study and the observation of life conditions (CREDOC,2001) for the INC, reasons of consumer choice have been demonstrated. The first consumer expectationfor labelled products is taste, while the second expectation is sanitary quality assurance. Thisstudy was conducted in 2001 shortly after the Mad Cow crisis seemed to underline consumer traceabilityresearch of. It is indeed possible that as of 2006, consumer expectations have changed in lightof the recent crisis concerning H5N1 virus which may have affected new consumer serenity. However,emergence of new sanitary policy, like the creation of AFSSA, has reassured consumers. This preoccupationconcerning research of sanitary quality has decreased. Today, it is possible that many consumersbuy more labelled products in order to adhere to a certain social vision of production or agriculture,or to be assured of product typicity rather than to have another proof of sanitary quality. Consumersare looking for typicity, but still what exactly is this new part of Terroir?6.4. Use of the Terroir image and traditionIn France, the use of the Terroir term and image emerged at the beginning of this century. Some studiesassociate this with food crises like Mad Cow and Creutzfeld Jacob disease. In addition, consumerfear has resulted in a demand of food products with greater quality insurance (CREDOC 2001), specifyingorigin, although others have linked this emergence to a social identity crisis, the WTO negotiationsor to new European agricultural policies. Regardless if consumers desire or achieve guaranteesand quality, they obviously use quality labels like Label Rouge, PDO/PGI or AB organic agriculture,which have exploded in the last ten years. To make them efficient and well-perceived by consumers, anew marketing strategy has appeared to help local food producers to commercialize their products tothese new consumers (Fort Fort, 2006). The use of advertising for local food is not only a means toraise their sales, but also a means to communicate a sign of quality, labels and guarantees. Therefore,the image of Terroir is a way to valorise a food product (Aurier 2004). The nostalgia concerning a“golden age”, based on a belief that methods of production and food products were better in the past,attracted marketing due to the possibility of this promotion. Marketing is then used to inform the consumerand to promote local food simultaneously, principally through leaflets and flyers.Terroir is a typical French dynamic concept that takes time, space and human beings into considerationat the same time (Bérard et Marchenay, 2004, p. 112). It is the main concept used in marketingfor local food products. The Idea of Terroir emerged with considerable strength in 1980 and 2002,with both the policy of decentralisation and the regionalisation of political decisions in France. Someauthors perceive Terroir as a correlation between an origin (geography, climate), culture (time andtradition) and know-how (D’Hauteville 2006 and Aurier, Sirieix, Fort 2004, Dekhili, D’Hauteville2006). This last description of Terroir, composed of cultural and geographical parts, is characteristic oflocal food advertisements, as demonstrated by the TV ad for “Roquefort” presenting an old cheesetradition in a typical territory - the Larzac. Marketing for Pélardon refers to tradition, know-how andalso the typicity of the place, in such an important way that those concepts are mentioned in everypage of the leaflet. Lagrange et al., (1995) explained this contradiction while suggesting that the territorialreputation of a product is often more the result of communication messages multiplication ratherthan a real geographical culture of the consumer.

Promotion 37Even though Terroir and tradition are often used in food advertisement, they do not necessary reflect areality of production. Looking at both regional and national magazines, we noticed that the majority ofreferences to tradition were found in advertisements for national and international brands. The sametype of observation emerged from different websites for food products. For instance “Chaumescheese”, which is a brand of Bongrain SA, has a website based on terms like “typicity”, “authenticity”and “rusticity”. This could be surprising when we know the industrial way this cheese is manufactured,but the marketers have succeeded in the establishment of a local image through images and conceptslinked to origin and tradition (The advertisement of “Bayonne salt” based on local nature andknow-how, in the number 108 of “Cuisine et vin”, is a also amazing as this salt is owned by the brand“Cérébos”, which is not typical of the Basque country). During the period 1980-2000, Scheffer, 2002,has observed an increase in the number of protected brands mentioning “terroir” at the INPI (NationalInstitute of Industrial Propriety) which increased from 10 in 1980 to 70 in 2000.The image of Terroir reveals to the consumer the geographical origin, history of the product (time andculture) and ancestral know-how, and is also used by small unions of producers which usually emphasizelocal nature and space they are close to. However, arguments employed by each quality signs aredifferent. Appellations like PDO or PGI are generally based on concepts like typicity and traditionalquality then refer to geographical origin and finally taste. Tradition and typicity are usually used inPDO communication policy, on the other extreme, the promotion of CCP is principally built on thesanitary quality, then geographical origin and finally tradition and typicity.6.5. ProximitySome large brands with a national sale area such as “Poulets de Loué” use signs of quality to give animage of quality, linking to the ideal of a small producer. Those brands as well as the store brand Terroirdo not have any empirical credibility. They have to create this image of proximity in the form ofadapted advertisements, and a wonderful example is seen in the advertisement for “Société”, the“Roquefort cheese”, when they use conservation cellars in the advertisement that just cannot be usedin reality. One of the most beautiful successes in local food advertising is by some distributor brands.“Carrefour” with “Reflets de France” and “Leclerc” with “Nos régions ont du talent” have totally disturbedthe local food market. Their growth of turnover was more than 13% in 2004. Their products arevarious, with more than 300 for “Reflets de France” and more than 200 for “Nos régions ont du talent”,and are also well-distributed. The concept of Terroir creates, then, a new dimension, such as with“Reflets de France” where advertising does not concern the different products but only the globalbrand. Unions of producers which have a Label Rouge or PDO also try to reduce their cost of communicationdue to global advertising of their label. Distributor brands become the most powerful ambassadorsof local food products through the concept of Terroir, since a strategy which allows small regionalproduction companies to extend their area of commercialisation and to improve their sales.However, the concept of local evolves depending of the context and the target segment of consumers.For instance, the presence of the geographical indication on the label carries specific messages to theconsumer about the process of production as opposed to information on the inherent qualities of theproduct.Finally, advertisements using the idea of tradition, know-how and origin and are also the distributorsown brands are actually far from the concepts they promote. The local aspect of the product is not real,but rather hyper-real. On the other hand, the “real” product sold on the local market does not need anybrand or marketing. Benkahla has demonstrated that the Pelardon PDO is not well used to enhance thecheese positioning by small scale producers when it is sold in local market. However, when the cheeseis sold outside of the local market, the PDO signs permits an added value (+30%). This means thatlocal consumers do not care about the PDO label since they know and trust the producer who sell hisown production. However unknown Terroir products require a producer to build up a reputation forquality category production, and although communication becomes an essential element, synergy be-

38tween the different approaches of economic development must be emphasized and the collective managementof the Terroir image becomes crucial.This ambivalence is particularly exciting due to 1) the conception of mass distribution itself is totallyopposed to the one of Terroir, and 2) standardization and loss of typicity and proximity that necessarilyincrease when the distributor brands improve their turnover. How do the consumers perceive thisdilemma?Some analyses of French research conclude that promotion is essential in a very large area of commercialisation,but the costs are not adapted to companies which produce these products- small or averagecompanies. The publications made, for example, by JL Rastoin underline that there are two types ofadvertising in local food. The first one creates a typical picture based on a normal product and appearswith a large brand which can fund the communication (packaging, advertising) to build this vision ofTerroir around the product. The second type of local food advertising is based on a reduction of thecommunication costs by scale economy which consists of federating small companies or unions ofproducers, or the two together, to conduct a common advertising campaign about only the product andnot the brand itself. The current problem is the rise of this cost, since there is increasing competitionbetween these Terroir store brands, which is resulting in an increase of prices. Today consumers paythe cost of this advertising, but if it continues to rise, the consumers will not continue to pay for this.Then, it is possible that this rise in advertising will eventually reduce the purchase price and the producerwill reduce the final price for the consumers, becoming more competitive. This situation is whathas happened with most large brands.

7 SuccessTo evaluate the success of labels or appellations, we should not only look at the economical results butalso at consumer perceptions.7.1. Some economical dataIn the previous presentation of the food sector in France, we have shown that local food occupies approximately20% of the food market with a current growth of almost 10%.This growth is due to confidence mainly attributed to the official signs of quality and also to the recentsanitary safety crisis. The Terroir store brands have increased their annual turnover at 15% per year.This success is shown by the increase in the number of products now available to consumers. Todaylocal food companies are very profitable, but small producers have also increased their sales thank tothis increase in consumer demand. Unfortunately, data concerning the economical aspects are veryscarce. Nevertheless, it is interesting to evaluate the success of labels and appellations by investigatingconsumer perceptions in this sector.7.2. Success in consumer perceptionsAccording to a survey by the CREDOC (Centre of Research for the Study and the observation of lifeconditions) conducted in 2001 and directed by the National Consumer Institute (INC), French consumerstried to find new cues to reassure themselves on food quality following the Mad Cow crisis in1996. At that time, nearly all media have evocated this crisis with scientific reports and much pessimismconcerning the sanitary quality of food. However, in 1996 the sanitary control in France wasquite confused and managed the situation with a definite lack of efficiency. The disorganisation ofcontrols and this amplification of the crisis by the media resulted in a total loss of confidence in thefood system from the French public. The only products which were completely guaranteed for thequality were the labelled products, especially Label Rouge products since it already ensured qualityeven before this crisis, and products with autonomic controls. In this period of crisis, the appellations,PGI and PDO, did not signify quality since they could not really make this. This is because appellationscan not prove the quality of their products since they are not independent controls of quality realisedby PDO or PGI. The only sanitary controls at that time were the produced by the French governmentby special administrations, like DGCCRF or DSV. The Mad Cow crisis lasted several years andwas even been followed by another crisis, the Ovine Spongiform Encephalitis. This second crisislasted until the beginning of the 21 st century.Communication for more than 4 years about the dangers of food changed consumer expectations. Afterthese crises, the relation between consumers and food was a relation of fear. The communication ofLabel Rouge presenting quality as the main factor for this label was successful, as we can see in thestudy of CREDOC-INC in 2001 (Figure 7.1), Label Rouge is the famous and well-known signs of

40quality in France. Perhaps the insurance of quality certified by Label Rouge was totally in accordancewith the expectations of consumers in this period.Figure 7.1 Study of CREDOC-INC 2001However, the appellations valuing tradition more than certification of quality were not so successful,and perceptions were not identical for all consumers. Young people were probably more influenced bythe media and without point of reference concerning quality compared to older consumers, and whoalso had only one solution to be insured of the quality- the certification by label (Figure 7.2).Figure 7.2 Relation between age and labels (Study of CREDOC-INC 2001)As seen in the previous figure, the older persons had a perception and some points of reference, developedby their own experience, and were less influenced by these food crises. Therefore, older consumersneeded less certification of quality. Although it is difficult to draw many conclusions from onlyone study and it seems important to emphasise the link between the consumer’s preference to havequality assurance during this period and the increase of Label Rouge’s success. However, this is notthe only explanation that can be made to explain the difference of notoriety between Label Rouge andappellations. For example, and as mentioned previously, appellations and labels do not concern thesame products. In fact Label Rouge can be possible for all products, even industrial products. Largebrands like “Poulet de Loué” can also have the Label Rouge if their quantity and means of transformationlook like more like at an industrial product than at a farming product. Having this type of product

Success 41combined with a very large quantity produced and a national area of commercialisation in all supermarketsallows Label Rouge products to be mass products concerning the quantity, but can also beproducts with sanitary and taste quality certificated.Although it is relatively new for appellations to be sold in supermarkets, a large portion of food purchasesis made in supermarkets (75% of food purchases concerning mass products). This differencebetween a national area of diffusion for the majority of Label Rouge products and a local area, due to ameans of distribution for appellations, influenced consumer perceptions, especially with the knowledgethat 80% of the French population live in towns (and approximately 10 million live in Paris).With this urban population structure, it is understandable that it can be difficult for city dwellers tohave easy access to local products.

8 Consumer8.1. Knowledge of consumers on local foodThere currently exits two types of consumers: the local consumer who knows the product and its territory,and those who are ignorant about the product.Local consumers prefer seasonality in their products. Waiting time is an added value for this consumer.Therefore, it can explain the very rapid increase in the number of open market of producers.For instance, the creation of the brand Marché de producteurs de pays by the Aveyron Chamber ofAgriculture has been made to organise local open markets which guarantees quality and proximity toconsumers, thanks to the adhesion of the producers to a quality charter. The relationship betweentypicity and means of commercialisation is very strong, and therefore a product does not really havethe same “local” meaning if it comes from a local market, a farm or a hyper market. This is why a lotof producers want to create open markets or markets at farms in order to sell their products directly toconsumers, although there is a risk when transferring a job between a producer and a seller. To avoidthis loss of identity, networks of producers develop charters to regulate the open market which are organisedby themselves and their members. The network Bienvenue à la Ferme, for example, is creatinga partnership with the brand Marché de producteurs de pays to able to use their charter for theiropen markets to prevent the possible loss of identity and quality if the producers only become sellers.8.2. Conviviality and consumption habitsThe means of consumption influence the choice of a product in many cases. Conviviality and sharingcan be a justification for labelled products assimilated to quality of life and pleasure. Eating labelledproducts can also be a means to show culture Nevertheless, there are also decisions based on consumptionhabits: when you know the product, when you are familiar with consuming it, you will buy iteasier than a consumer who is unfamiliar with this product, since food products express all their interestsonly when you taste them.Marketing is a means to inform consumers about the characteristics of the product, while taste is theonly means to keep a consumer purchasing the product. A consumer who had a positive experiencewith the product will buy it again. However, if the taste does not correspond to consumer expectations,it will be nearly impossible to make he or she buys this product again, even with the best marketing.Taste is important today, but factors like packaging also play a key role in product choice.For no-local consumers, regularity of taste is also important. Consumers want a predictable productthat is without variation and surprise.Consumers from newer generations (less than 25 y.o.) seem to have another vision concerning a respectof tradition. Only 35% said that agriculture must respect traditions compared to 63% for consumersgreater than 65 y.o. (BVA survey 2003)

9 ConclusionThe presence of a strong wine sector, a culture of food and recent crises have draw the currentagro-food sector in France. The interest in food quality has long been important, due tothe typical richness of the French agriculture. The wine sector influenced the organisation ofthe Agro-food sector, thanks to its financial influence in the food market.However, the last food crisis completely modified the expectations of consumers. Food qualityhas appeared as a main factor of product choice, even before price for certain food products.The poultry sector and meat sector are particularly more influenced by this evolution.Government policies have tried to reassure consumers, but the creation of all these labels andappellation have resulted in a certain confusion consumer’s. The emergence of Terroir® storebrand, managed by large distributors, have answered to consumer demands and also resultingin a new discipline, the Terroir® Marketing.The diversity of products, of brands and now of labels obliged label owners to demarcatethemselves. However, the cost of advertising obliges the small unions to federate themselvesto share the cost, although Terroir store brands solved this particular problem by promotingnot the product but the brand. The danger is to create a monopoly of store brands in the localfood commercialisation out of their areas of production. Terroir marketing can help the federationof small producers by increasing marketing efficiency. Traditional marketing is notadapted to valorise local food (Fort, Fort, 2004). The knowledge of the essential cues, whichresult in purchase decisions, could explain the success of these local products. To better understandthe real Terroir image in purchases could allow better communication only on thisfact and reduce marketing costs.

LiteratureAmilien V. ; Ferras N. and Fort F.From local to local: Local Products between Local Places and Global Myths – Paper proposedat the ESF workshop « Local food in Europe ». 14-16 June 2006. Bordeaux. FranceAurier, P. ; Sirieix, L.Le marketing des produits alimentairesParis : Dunod, 204 pAurier, P. ; Fort, F.Effets de la région d’origine, du produit, de la marque et de leurs congruences, surl’évaluation des consommateurs : application aux produits agroalimentairesRecherche et Application en Marketing, vol. 20, n°4, décembre 2005, pp. 29-52Aurier,Fort, SirieixExploring terroir product meanings for the consumerAnthropology of food, issue 04, May 2005Barjolle D. ; Sylvander B.Facteurs de succès des produits d’origine certifiée dans les filières agro-alimentaires enEurope : marché, ressources et institutionsINRA Pro. Anim., n°16, pp. 289-283Berard L., Marchenay P., 2004,Les produits de terroir : entre cultures et règlements,Paris (FRA), CNRS Editions, 229 pBVA 2003 :Enquête : Imaginaire de l’agriculture.Agrobiosciences. Août 2003Boizot-Szantai C. ; Lecocq S. and Marette S. 2004,Common Labels and Market mechanismsDocument de travail n. 05-04, INRA CORELA. Ivry.Codron, J.M. ; Giraud-Heraud, E. ; Soler, L.G.Minimum quality standards, premium private labels, and European meat and fresh produceretailing. Food Policy, vol. 30, n° 3, 2005, pp. 270-283Codron, JM. ; Sirieix, L. ; Reardon, T.Social and Environmental Attributes of Food Products in an Emerging Mass Market : Challengesof Signaling and Consumer Perception, With European Illustrations

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Appendix1. French safety regulation1.1. AFSSA (French Agency for Food Sanitary Safety of food)The AFSSA (French Agency for Food Safety Security) evaluates the safety of human andanimal feed, and it is managed not only by the Health Ministry but also by the AgriculturalMinistry and Economical Ministry (DGCCRF). It is a public organization structured into differentfields such as scientific laboratory support (i.e. managing biological laboratories linkedto food research), advice and veterinary products authorization.Its aims to control each step of the process, from the production to the commercialization offood (production, transformation, conservation, transport, storage and distribution). Theseevaluations are made for vegetable and animal foods but also for drinkable water and productsused in food manufacturing (e.g. plant health products, veterinary medicaments, etc.).Another goal of the AFSSA is to evaluate the food nutritional risk, for other parameters thansafety dangers, and animal diseases. The AFSSA is obliged to alert the Heath and AgricultureMinistries if there is a health risk for consumers. The AFSSA has to give its opinion and thenpublish recommendations for foods. This agency does not have any power in safety police,except in the case of veterinary medicine but can be implicated in the management of foodcrisis. These previously described roles also involve other organizations associated withsafety police like the DSV (Veterinary Services Direction) or the DGCCRF (Competition,Consumption and Repression of Frauds General Direction).1.2. DGCCRF (General Department for Competition, Consumption and FraudRepression)Contrary to the AFSSA, the DGCCRF depends on the Ministry of Industry, Economy andFinance. The three spheres of activity of the DGCCRF are:- Competing regulation of the markets- The economic protection of the consumer- Consumer safetyThe role of the DGCCRF involves the control of the goods and services exchanged. It surveysand directly controls the market, such as, for instance, to control the temperature of thestorage of perishable products in restaurants. The DGCCRF publishes advices and rules concerningthe conditions of storage, ingredients used in food manufacturing process (i.e. consumptionpractice cards). Furthermore, the DGCCRF has a role of control: it can give infringements,close a shop/restaurant if the safety obligations are not respected. With respectto consumer safety, the objective is to preserve the physical safety and health of consumers.The DGCCRF intervenes on all products, on every level of food (production, importation,distribution).1.3. DSV (Veterinary Services Direction)The DSV is not a state agency like the AFSSA, but rather it depends on the Agricultural Ministry(a delocalized service) and involves all aspects of animals used in food production. The

52DSV, technically DDSV (Departmental Veterinary Services Direction), is an administrationmanaged on a departmental scale, contrary to the DGCCRF or the AFSSA which are managedin a national scale. Its roles are to control the application of the sanitarian regulations infarms and companies involved in production, transformation, transport or distribution offood. The aim of the DSV is to guarantee that a product is healthy, without harmful effectsand without animal suffering.Figure 1PubliclaboratoriesManages researchAFSSASanitary crisisAlertsDGCCRFProvides recommendationsAlertsand managesPublishesRegulationsDDSVControls the applications of theregulation in places in directliaison with the consumerManages thesanitariancrisis(H5N1…)Controls theapplications of theregulation in farms orin companiesConcerning AnimalsConcerning more precisely consumers