"It's very difficult for farmers to make a profit when they are growing a commodity-type product
, whether corn (for livestock) or hay," says Christopher Markuson, director of the county's Department of Economic Development.
A wide variety of commodity-type product
has been coming in from China for years, but more often than not, today's goods made there are of superior quality and are attracting attention from high-end retailers.
"Being an importer of a commodity-type product
like a vertical machining center or a knee mill is not in our sweet spot.
Growth has followed the advent of pre-ground coffee; the introduction of brick pack technology in packaging; the conversion of coffee from a simple, commodity-type product
to a sophisticated branded concept; and the development of private label and discount coffees.
The company's business model is based on offering commodity-type products
. Low insurance penetration and reduced consumer confidence in the local economy strongly limits organic growth as well as the development of new products.
Ironically, at a time of static growth in demand, this has made the market for commodity-type products
even more stressful.
Retailers have done a fine job on the store brand side balancing product quality with price so far, especially when it comes to commodity-type products
such as distilled white vinegar, apple cider vinegar and vegetable oil.
These "indirect" characteristics can be used to differentiate very similar or commodity-type products
and may be fertile ground for differentiation.
"To meet the challenge of globalization, many producers are moving to more unique and customized products as a way to compete with the mass-produced, commodity-type products
that are being imported," he says.
This is the result of a strategy adopted by large broiler processors in Brazil to add value to their products in order to increase profit margins and shift away from commodity-type products
like whole broilers.
The move shifts Rockwell away from commodity-type products
and into more specialized factory automation solutions that combine Rockwell hardware and higher-margined consulting services.
"Companies that manufacture commodity-type products
are less likely to be able to push through price increases because of the competition from private label," says Jay McIntosh, Americas director of consumer products for Ernst & Young.