'Made In The U.S.A.' Goes Premium?

by , Dec 6, 2013, 8:00 AM
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Shinola watches! Made in the U.S.A. And I want one. Why? They look like great watches, first of all, and also they're, like, made in America. In Detroit, even. And nowadays when something is made in America, it means it's a company run by cool people in a former Fuller Brush factory doing it all by hand and drinking artisanal bourbon after hours. 

But, seriously, will I buy a product because it says "Made in America?" Yes. I wanted a quality bicycle for touring, and know that the best of those are made here. I didn’t buy it because the label says it is, but “Made in the U.S.A.” may be getting more and more traction. How much of that is because people want to help the home team? Most of us have read that Walmart, GE and others have made it a public policy to purchase more of their products from U.S. producers and that’s partly because they are possibly altruistic in their intention, but it may also be fiscally smart vis à vis import costs. 

I saw a new survey from Perception Research Services (PRS) that does suggest people are influenced by that “made here” label. It’s partly cause marketing — people are more likely to buy "Made in the USA" products because they perceive it as helping the economy, per the firm, but the Boston Consulting Group says people also see “American Made” these days as being of higher quality. The study says that in the case of U.S. vs. China, the average American is willing to pay up to 60% more for U.S.-made products. 

And PRS' study said that's especially true of American-made food, medicine and personal care items. Let's focus on those: food, medicine and personal care. Safety, locally grown and sustainable. But mostly safety. People are getting that the stuff that gets shipped from markets in another continent or even another part of the country may not be that fresh, and in the case of China, not too safe. The New Yorker goes into this in a recent article on how supermarkets will have to say where a cut of meat comes from and where it was slaughtered.

The issue was also taken up by Nashville-based ad agency Bohan's blog "Why Moms Rule." This post gets right to the turkey. Hollie Rapello, who edits the blog and wrote the piece, cites a China Real Time report that rolls out some staggering numbers on U.S. consumption of food from China. She also cites Pew study data that only about a quarter of Americans trust those products. 

Rapello also writes that a recent USDA ruling allowing four Chinese companies to export “cooked” chicken to the U.S. means the firms will "raise and process chicken in the U.S., then send it on a ship to China, where it will be processed into nuggets and patties and then sent back via ship to the U.S." No labeling required. Will it matter? She cites a Fleishman-Hillard study says 50% of moms are reading more food labels and 78% already do. 

This could be an opportunity for labeled-American food as a premium position, that people will just assume non-labeled is from a galaxy far, far away. "Will ‘All-American’ become the next ‘organic’ seal of approval?,” she asks. “Or will it become the new price of entry to even be considered by moms buying chicken and other food for their children?" 

The growth of urban green markets, restaurants and supermarket chains with organic and "locally grown" sections suggests that a market for local and labeled is there. But as in everything else around food, it will be the more affluent  consumers who subscribe to organic and local, and who have the wherewithal to make that choice. For most people, though, value comes first, and unless the risk is imminent, that means price trumps risk every time. 

How ironic is it that in several categories — from bicycles to apparel to watches and even food — American-made could wind up being a premium label? 

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