The best organic companies are not ashamed of charging premium prices for their products.
In fact, because they know the high value of their products, they don’t hesitate to charge more.
They don’t waste time apologizing for their high prices, nor do they focus excessively on the topic of cost reduction.
Today I came across a quote from Jane Miller, CEO of ProYo (and former CEO of Rudi’s Organic Bakery). Speaking on ProYo, she says:
“I am particularly interested in accessibility to nutritious food for all consumers. In my newest role as CEO of ProYo, we are looking at innovative ways to reduce the cost of our product and find more venues to expose consumers to non-GMO products. For example, our product is a perfect supplement to the diet of a senior, and we are pursuing Medicare reimbursement. If we can make ProYo available in the hospital and senior care environments, we will dramatically increase accessibility of better-for-you food to an underserved consumer group.”
On the surface her comment sounds noble, right?
She wants to make ProYo (high-protein frozen yogurt) products available to people who are essentially financially poor or financially struggling in some way.
Here’s the problem: In order for her agenda to exist in the first place, she and ProYo, the company, would have to believe wholeheartedly in the idea that “there are certain consumers out there who are financially struggling and who cannot afford our product without some help.”
If everyone on the planet were rich, there would be no need for this agenda to exist. In other words, the agenda is based entirely on lack.
The agenda only exists in response to a perceived external problem: that of financial lack of a particular consumer group.
Again, it seems like a noble agenda on the surface — helping the poor.
However, ProYo is supposed to be a premium product. In fact, the company’s products are named using that very word: “Premium Vanilla Bean.” “Premium Banana Vanilla. “Premium Blueberry Pomegranate.”
By definition, premium means “of the highest quality.” Perhaps even the best. Producing a premium product involves spending an amount of money above and beyond that which is NOT the best.
So a premium yogurt company looking for ways to cut costs of its products in order to serve a population who is experiencing “lack” — is actually going against its own brand’s promise.
The act of investing time, energy, and money into finding “innovative ways” to make ProYo cheaper — is not consistent with the brand’s promise. It’s not in alignment.
Premium products, by nature, cost more money. Consumers value premium over non-premium, which is why they’re willing to pay more for it. The primary objective of a premium product maker should be best quality, not cheapest cost. In other words, we work to make the best quality product regardless of what it costs. If we can’t do that successfully, then we find a different line of work.
ProYo is “premium” because it’s GMO-free, high-protein, gluten-free, soy-free, probiotic, etc.
By looking for ways to reduce costs on their own product, ProYo (probably unintentionally) calls into question the integrity of its own brand.
ProYo would be better served keeping its higher prices, and perhaps donating a portion of its revenue to the hospitals and senior care environments it wants to help.
What the company is REALLY doing is attempting to engage in charity.
There’s nothing wrong with charity. But if it’s charity, it should be treated as such. Not as a strategic business maneuver.
ProYo’s desire to involve itself in Medicare reimbursement is also questionable and out of alignment for a company that calls its products “healthy.”
Medicare is a deeply flawed government program that started off with good intentions…but ended up becoming a wasteful mess — one that’s far beyond ever being salvaged or fixed. The program rewards people for taking prescription drugs (which are a part of disease management, not health). The program encourages people to behave as though they’re powerless and small in life, requiring government financial assistance. It’s one of those programs that’s better off being deleted entirely so that something new and better can be created in its place, from scratch.
Funny thing is, Medicare started because certain people in government had the idea that a “problem of lack” existed. The program was created to give elderly citizens more access to hospitals and doctors. These citizens were apparently lacking in such access.
“The problem of elderly Americans who lacked health care was acute, according to the Department of Health, Education, and Welfare,” says a New Yorker article. “Older Americans required more than twice as much hospital care as people under the age of sixty-five. Even with Social Security benefits, most could not afford the cost of hospitalization, which was rising rapidly during these years as a result of medical advances.”
So what was the answer?…create Medicare to resolve the lack.
Does this sound similar to what ProYo’s CEO said?
I think it does.
Decades later, Medicare has morphed into a formidable circumstance in which the U.S. government interferes with doctor-patient relationships, while exerting an inappropriate amount of power over the nation’s health care…such that it’s no longer even “health care” — it’s disease management.
When you create a program or agenda (or do ANYTHING) based on trying to eliminate a perceived problem, or trying to fill a perceived lack…you actually create more lack and more problems later down the road.
While ProYo’s intentions are good, their actions are off…just like the original creators of Medicare.
As Robert Fritz, author of The Path of Least Resistance (a great book that I’ve blogged about), says: Responding and reacting to an unwanted problem is quite different from creating the thing you actually desire.
To be in alignment with its brand promise, ProYo can simply donate money to its intended charity recipients. Or it could offer coupons, gift certificates, prizes, contests, or other mechanisms to allow certain people to receive free or less expensive products.
No “cost reduction” of its premium products is needed. Especially not for the purpose of serving a particular group of consumers who apparently believe in “lack.”
If ProYo really wanted to do something big, creative, and innovative, it could start by asking possibility-focused questions, rather than lack-focused questions. For example:
- How can we help hospital and senior care environments create more wealth, so that they can afford better food?
- How can we help seniors not wind up in hospitals in the first place?
- How can we inspire individual consumers to connect with their purpose in life and add more value to the world…so that they can be paid more money…so that they can easily afford to buy our premium products?
These kinds of big questions rarely ever get asked. It’s easier just to focus on “Where can we cut costs?”
If you’re an organic product company (or other premium-priced product company), exploring how you can cut costs in order to reach financially poor consumers may not be the best use of your time or energy. Plus, it may go against your brand’s promise.
Marketing & Action Tip: Don’t ever apologize for your high prices. High prices are in alignment with premium products. In fact, raise your product prices! Use the extra money to fund the marketing of your organic product company, so that more people know about you. Create marketing content that inspires consumers to rise to their better, richer, happier, healthier selves. Encourage them to view the world from an “abundance mindset” — where anything is possible, where lack doesn’t exist, and the only thing limiting a person is their own small/inaccurate thinking. Don’t teach people to look for “deals” or to sign up to programs that reward financial smallness. Fuck a coupon. Life is too short to be financially small or to encourage others to be small.