Between The Lines
MALAYSIAN COOL (that’s cool, as in Country Of Origin Labelling)
By Hajj Abdalhamid Evans
Aug 1, 2006, 16:20

If we are looking for some evidence that a country branding campaign can reap some rich rewards, we do not need to look much further than the Malaysia: Truly Asia campaign. This well-thought out effort to promote Malaysia as a world-class tourist destination has seen year-on-year increases in the number of overseas visitors – and the accompanying revenue – visiting this green and pleasant land. Truly Asia, when applied to Malaysia, managed to highlight the best aspects of our colourful melting-pot blend of eastern allure without bringing to mind some of those aspects of Southeast Asia that may be less than pleasant for the average tourist.

Tourist numbers have doubled from 7.9 million in 1999 to 15.7 million in 2004, a fine achievement in anybody’s book. Even the dip in 2003 can be seen as no more than a regional health scare, as that year’s 10.5 million jumped by 48% the following year.

So the question naturally arises: why stop at tourism?

Country of Origin Labelling, or COOL, has been used with great success as part of a national branding exercise for a nation’s products. One of the longest-running and successful campaigns – and one that can have some useful lessons for us – has been for New Zealand lamb.

The history of New Zealand lamb exports to the UK dates back to 1882. Exports peaked during the First World War, and fell – dramatically – when the war ended, leaving 180,000 metrics tons of frozen stock looking for a destination. The attempt to sell this excess in London produced a major market crisis, that in turn prompted the creation of the New Zealand Meat Producers Board in 1922. The following year, the now-famous red rosette was introduced to identify New Zealand lamb. The rosette is still in use today.

Government subsidies helped to strengthen and stabilise the growth of lamb production, but it was actually the removal of these subsidies in 1984 that really made New Zealand lamb an internationally competitive product.

Flock sizes totalled 69.7 million head in 1984, and Government subsidies accounted for 40% of farmers’ income. Ending the subsidies resulted in a massive slaughter in 1985 leading to a 25% reduction in flock sizes. This was the turning point from a subsidy-driven volume-based production to the high-quality market-driven product that we recognise today.

But while flock numbers fell from the 1984 figure of 69.7 million to 39.5 million in 2002, the export carcass weight went up from 13.6 kg to 16.93 over the same period, and there was only a minimal drop in total weight of exported product, from 286,000 metric tons to 270,000 in 2002. Better pasture meant better food-to-weight conversion ratio, and a better end product.

Currently, with only 3.8% of the world total sheep stocks, New Zealand manages to be the world’s largest lamb and mutton exporter, with over 40% of the total world exports, 83% of which is lamb.

Clean and Green
The New Zealand branding campaign that was effectively used for tourism promotion also overlapped and supported the use of the same clean green image for the lamb promotion. Consumers associate the unpolluted New Zealand landscape with high quality, grass-fed lamb. The meat producers also understood the effectiveness of this campaign, and 85% of them supported the use of levy funds for export promotion campaigns.

Many companies formed alliances among themselves and staged joint marketing campaigns to promote the overall export market, shrewdly recognising that success can be shared. Prosper thy neighbour, indeed. New Zealand also joined forces with Australia and the US to promote the demand for lamb among US consumers. This level of cooperation has been one of the keys to their success; instead of vying with each other for market-share, they recognised that a strong overall market is good for everyone.

Product positioning was further strengthened by paying close attention to the trends and needs of their customers around the world. Recognising that Halal slaughtering was more important to many markets than the green image, they have been quick to comply with Halal standards to ensure good market penetration.

A good product; paying close attention to consumers’ needs; an intelligent marketing stragegy and a strong branding campaign make New Zealand lamb an excellent example of how to use COOL country of origin labelling in a positive and profitable way.

Halal Malaysia
There are really some lessons to be learned here if Malaysia is going to fulfill her ambition to be a world-class Halal hub. It has been assumed that our prime product is the Halal logo itself; that Malaysian-certified Halal produce is, in the Muslim world, already a premier product, not so much because of the product itself, but because of the JAKIM logo.

The past year or so has seen the creation of a series of Halal hubs and food parks around the country, almost one in every state. For the most part, these are primarily real estate projects. An area is designated as a Halal zone, and it is hoped that somehow foreign producers will move in and set up shop just to get the JAKIM logo on their packaging, and boost Malaysian exports in the process. The reality is of course not so simple. It is always a good idea to aim before pulling the trigger.

We actually have all of the ingredients needed to make a success of this ambition, but we will have to do a bit of hard work to make it all happen.

Malaysia has been a trading nation for many centuries, and there are sound geographical reasons that have made this the case. Strategically positioned between China, Australia/New Zealand on one side and the Middle East and Europe on the other, Malaysia is in an excellent position to be the distribution point for Halal produce that moves from the areas of production to the key points of consumption.

Value Added Services
As manufacturing costs in many sectors of the developed Western (and even Australian) economies have escalated to the point of no return, the trend to outsource manufacturing to the Southeast Asia continues to be dominant. The food industry is no exception. This is an area where Malaysian businesses can capture a significant market sector. And it is not always just about production costs.

As Free Trade agreements with New Zealand and Australia seem likely to be signed in the near future, opportunities exist for enterprising Malaysian companies to enter the food supply chain. Australian and New Zealand meat products have already established a strong COOL brand identity. If unprocessed carcasses are shipped to Malaysia where they can be further processed, packaged, labelled, branded and certified, they can gain access to both domestic and overseas markets complete with the JAKIM Halal logo.

Overseas companies are far more likely to set up in Malaysia if they are offered joint-venture partnerships with local Malaysian companies. After all, if our claim that the JAKIM Halal label is such a value-added logo, why do so few Malaysian companies bother to acquire it? If we want overseas companies to invest in Malaysia, we must also put our own investment money where our marketing mouth is.

At a trade show recently, I met a US meat snack manufacturer who had set up a manufacturing plant in New Zealand, because of the overall difference in perception between NZ and US meat. When asked about setting up in Malaysia, he responed that the idea was very appealing, but he would like to see some local response first.

In this respect Malaysia suffers from two problems, both of which are essentially matters of perception – and thus, theoretically in any case, easily solved.

The first is a matter of motivation and self-belief. Becoming a Halal food hub is not just a matter of food production. It is matter of recognising an opportunity in a global market, and capitalising on Malaysia’s strengths by providing value-added services. If Halal lamb and beef carcasses – not to mention live animals – are daily going past our door on the way to the Middle East, why not bring them here and process, package and brand them first?

The second is simply a branding exercise. If the New Zealand government and private sector can successfully collaborate in a COOL branding campaign, why not Malaysia. As the Prime Minister recently said, “Malaysia is a secret waiting to be discovered”. He went on to say that if others have a false perception of us, we cannot blame them, it is up to us to set the record straight. We must brand ourselves; if not we will be branded by others.

The New Zealand lamb producers worked together for the common good by contributing to a campaign fund to promote their products. They promoted their country and their own products at the same time.

I have no doubt that a concerted and well-orchestrated effort in Malaysia could do wonders for the local Halal industry, and at the same time make a significant contribution towards the Malaysian food bill.

By Hajj Abdalhamid Evans
Director of Research & Intelligence
The Halal Journal

The writer welcomes feedback. Email him at hamid@kasehdia.com







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