The expansion of branding in international marketing: The case of olive oil, 1870s–1930s

This article was originally published with errors. This version has been corrected. Please see Erratum (https://doi.org/10.1080/00076791.2017.1361621).

Abstract

Drawing on a variety of sources, this article investigates the emergence and expansion of branding in the international olive oil markets prior to World War II. It documents the rapid growth of the world trade in packaged olive oil from the 1870s onwards and shows that the main destinations of this consumer-ready product were in the Americas. In this respect, it complements previous findings based on the use of trademark registration figures. The article then argues that the expansion of canned and branded olive oil exports to the New World was the result of three interconnected factors: the mass migration of southern Europeans in the late nineteenth century and the formation of a new market on the other side of the Atlantic; significant transformations in the commodity chain of the product in the Americas during the first third of the twentieth century; and the problems of quality uncertainty and fraud in the emerging New World markets for olive oil. By analysing these factors, this study also provides evidence to further the debate on the purpose of branding and modern marketing.

Keywords:

• Branding
• international trade
• migration
• commodity chain
• quality uncertainty

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Correction to: The expansion of branding in international marketing: The case of olive oil, 1870s–1930s

Acknowledgements

Previous versions of this article were presented and discussed at the 16th Annual Conference of the European Business History Association (Paris, 2012), the 14th International Conference on Agricultural History (Badajoz, 2013), the International Seminar ‘Brand and its History: Economic, Business and Social Value’ (Madrid 2014) and the 11th International Conference of the Spanish Economic History Association (Madrid, 2014). I would like to thank the participants at these meetings, as well as Jaime Reis, the editors of this special issue and the anonymous referees of this journal for their useful comments. The usual disclaimer applies.

Notes

This article was originally published with errors. This version has been corrected. Please see Erratum (https://doi.org/10.1080/00076791.2017.1361621).

1. For modern marketing, see, for example, Fullerton’s general rejection of the belief that ‘sophisticated marketing is a recent phenomenon’. Fullerton, ‘How’, 108. For the particular case of branding, Moore and Reid ‘The birth’, 419 argued that ‘brands and branding are as old as known civilisation’. For modern retailing, Alexander and Akehurst, ‘Introduction’, 5 proposed ‘the emergence of modern retail systems during the period 1750–1950’ as the theme that connected the essays they were editing; and for modern advertising, Church ‘Advertising’, 641, concluded by suggesting that in Britain ‘modern advertising originated during the late seventeenth century’. On the periodisation of marketing history, see also Berghoff, Scranton and Spiekermann, ‘The Origins’.

2. On the concept of modern marketing applied to historical research, see, among others, Church and Godley, ‘The emergence’, 1 and Church ‘New’, 407.

3. There are, certainly, dissenting views regarding the chronology, as well as the typology, of firms in the genesis of modern marketing. For the particular case of branding, see Wilkins, ‘The neglected’, Wilkins ‘When’, and Duguid, ‘Developing’.

4. Duguid, da Silva Lopes and Mercer, ‘Reading’.

5. Ramon-Muñoz, ‘Product’.

6. See, for example, Chandler, The visible; Tedlow, New; Wilkins, ‘The neglected’.

7. Ramon-Muñoz, ‘Specialization’.

8. For references, see below.

9. Chandler, Scale, 63–65, 147–49; Tedlow, ‘The fourth’, 12; and Wilkins,‘When’, 30. If packaging can be considered a proxy for branding, one is tempted to say that it can also be considered a proxy for advertising, since branding and advertising progressively became two sides of the same coin. This is, however, more difficult to prove. Advertising is related to many factors that differ from firm to firm as well as from country to country, although it is true that a larger use of branding techniques would be expected to correspond with a higher intensity in advertising.

10. The foreign trade statistics of the largest trading countries progressively detailed both the use and quality of the product (edible and inedible olive oil) and the weight and size of the package used to trade it. On the basis of these sources, as well as other qualitative and quantitative information obtained from a large variety of sources, the data shown in Figure 1 and Table 1 have been estimated. These data report estimates on international olive oil imports for the period from 1870–74 to 1934–38 distinguishing by packages (large and small) and continents (Europe and the Americas, which accounted for more than 90 per cent of total world olive oil imports). The sample countries for Europe are Austria-Hungary (only up to 1914), Belgium, Bulgaria (excluding 1870–1874), Czechoslovakia (only after 1919), France, Germany, Hungary (only after 1919), Italy, Norway, Portugal, Romania (excluding 1870–1874), Russia (only up to 1913), Switzerland and the United Kingdom. For the Americas, the sample includes Argentina, Brazil, Chile (excluding 1870–1874), Cuba, Mexico (excluding 1870–1874), Peru (excluding 1870–1874), Uruguay (excluding 1870–1874), the US and Venezuela (excluding 1870–1874 and 1890–1894). When necessary, data from the foreign trade statistics of Spain as well as of other exporting countries have also been considered in the estimates. As a rule, and in accordance with the information available, it has been assumed that olive oil imported for industrial uses was traded in large packages. For more details on methods and sources, see Ramon-Muñoz, ‘Patterns’.

11. Da Silva Lopes and Guimaraes, ‘Trademarks’, Duguid, da Silva Lopes and Mercer, ‘Reading’; Higgins, ‘The making’; Lluch ‘Marca’; Mercer, ‘A mark’; Sáiz and Fernández, ‘Catalonian’.

12. Ministero di Agricoltura, Industria e Commercio (hereafter MAIC), ‘Il commercio’, 3–38.

13. MAIC, ‘Il commercio’, 44–101.

14. Author’s own estimates from International Yearbook, various issues.

15. Ramon-Muñoz, ‘Patterns’.

16. Ferenczi and Willcox, International. See, among others, Hatton and Williamson, ‘The issues’, on the nineteenth century European mass migration.

17. See Ramon-Muñoz, ‘Migration’, and Fernández, Un ‘mercado étnico’, for the particular case of Argentina.

18. Wilkins, ‘When’.

19. On this issue, see, for example, the summary by da Silva Lopes Global, 5–7.

20. Tolman and Munson, ‘Olive oil’, 56–59.

21. Câmara Portuguesa de Comércio e Indústria do Rio de Janeiro, Inquérito, 301–2 and Consejo de Economía Nacional, El aceite de oliva, 11.

22. This process might also be expected in colonial territories. Late-nineteenth century colonialism also encouraged European settlement abroad; when the new settlers came from olive oil-producing countries such as France or Italy, the demand for southern European oil in the newly colonised territories might have been expected to increase, contributing both to the creation of new markets for olive oil and the expansion of branding and other modern marketing techniques. More research into this issue is needed, but at present there is no clear evidence to support this hypothesis; in fact, French olive oil exports to its colonial possessions declined between the periods of 1897–1899 and 1909–1913. The only colonial territory where the consumption of French olive oil appears to have significantly increased was Tunisia, a French protectorate since 1881 as well as an emerging producer and exporter of olive oil. In this respect, and for the case of the wine industry, James Simpson has argued that ‘the vine followed European settlement in the New World and North Africa’ (Simpson, ‘The Emergence’, 267). For the case of the olive oil industry, the picture is slightly different: the European settlers certainly promoted the olive oil industry in northern Africa, but the New World remained highly dependent on the supply of Mediterranean olive oil.

23. Casson, ‘Brands’, 42.

24. Ramon-Muñoz, ‘Product’.

25. For Uruguay, see for example, Mercurio. Revista Comercial Ibero-Americana, No. 167 (January), 1913 and El Aceite de Oliva de España (hereafter AOE), No. 49 (December), 1932, 347. For Argentina and Peru, see MAIC, Il commercio, 186–87, 384. According to an Italian consul in Argentina, once a firm had established its own brand ‘[retailers and importers] can enhance their sales and obtain major profits, which would be more difficult to achieve if consumers bought the same brand of olive oil from other retailers, [In addition, ] ‘the same type and quality of olive oil [is] sold under different names’. MAIC, Il Commercio, 186–87. The translation is mine. For Brazil, Hijos de J. Sabater, a Spanish exporting firm, acknowledged in the mid-1920s that they were both producing and exporting seven different brands of olive oil for Brazil; two of them belonged to the firm itself but the other five were property of different Brazilian importers. Sabater was not alone in applying this strategy. According to his agent in Rio de Janeiro, this was an extended practice for many Spanish firms exporting olive oil to Brazil (Arxiu Comarcal del Baix Camp. Fons Sabater (hereafter ACBC. FS). Letter from Rio de Janeiro dated 8 July 1926). For the US, see, among others, Tolman and Munson, ‘Olive oil’, 53–59 and Espuny, De Gallur, 51, who refers to the case of the firm Giacomo Costa fu Andrea, from Genoa, one of the largest exporters of canned olive oil to the US in the late 1920s. According to T. Espuny, a Spanish businessman, in 1929 Costa exported 35,000 boxes to the US, of which 5,000 contained a high-quality olive oil sold under the brand Costa and 15,000 consisted of olive oil of lower quality sold under the brand Dante, which was also owned by this Italian company. The other boxes (15,000) contained olive oil packaged and exported by Costa under brands owned by several importers.

26. The strategy of establishing warehouses in the largest producing areas seems to have been followed by a number of US firms. Musher & Co, for example, which opened for business in New York in 1907, imported about 1,300,000 gallons of olive oil in bulk in 1919, around 14% of all bulk olive oil imports. In 1921, the company president Nathan Musher stated that ‘Musher & Co. maintain very expensive warehouses throughout Spain and Italy, where the oil is brought in by local farmers and immediately placed in tiled tanks and kept at an even temperature, away from the light and air, which are detrimental to olive oil’ (US Congress, Tariff information, 240. Heinz (H.J.) & Company, the well-known US food processing firm, also invested in the olive oil business abroad. In the early 1930s, the Spanish attaché in Texas noted that ‘Spanish olive oil imports to the South of the United States are almost totally made by means of Heinz (…), who (…) has its own house in Spain’. AOE, No. 73 (November), 1934, 377.

27. Chandler, The visible; Chandler, Scale; Tedlow, New.

28. In 1931, for example, information concerning the result of operation of 27 plants packaging Maine sardine (herring) shows that sardines in olive oil only accounted for 0.2% of the total product value, whereas in the case of sardines in cottonseed oil the figure was 45%. Olive oil. Official organ of the olive oil industry published monthly by the Olive oil Association of America (hereafter OAA), 5, No. 9 (September, 1932), 9.

29. US Congress, Tariff Information, 240–41.

30. US Tariff Commission, Report, 8.

31. US Congress, Tariff Readjustment, 706. In 1913, however, the representative of the Pompeian Corporation, from Baltimore M.D., argued that ‘the 10 cents per gallon differential not only protects the manufacturers of packages and labels used in packaging olive oil, but gives the American packager a chance to spend a little more on packaging the olive oil under better conditions’. US Congress, Tariff Schedules, 121.

32. US Congress, Tariff Act, 241–43, 248–49, 259–61; US Congress, Tariff Readjustment, 712–29.

33. US Congress, Tariff Readjustment, 714.

34. US Congress, Tariff Act, 259–61.

35. US Congress, Tariff Readjustment, 721. P. Pastene and Co. was a company established in Boston in 1874. By the late 1920s, it had become one of the largest distributors of imported groceries in the US and Canada.

36. For the role of retailers’ own brands, see, for example, Wilkins, ‘When’, and Williams, ‘Multiple’.

37. The numbers included in this figure must be considered approximate. The Annual report, the Index of trademarks and the database of the US Patent and Trademark Office, the sources used to create this figure, do not always allow proper identification of the trademarks that were registered to brand a large variety of food products under the same trademark. For example, the firms that were classified in the official reports under the trademark title of canned food might have branded canned olive oil, among many other products, although this is not always stated in the sources.

38. Wilkins, ‘The neglected’. For a dissenting view, Higgins and Tweedal, ‘Asset’. For the protection of firms’ brand through court actions see, among others, Duguid, ‘Developing’, Duguid, ‘French’, Higgins and Mordhorst ‘Reputation’, and for the legal use of the word ‘sherry’, Fernández, ‘Unsuccessful’. On the responses of British multinationals in roder to protect the global reputation of their brands between 1870 and 1929, see da Silva Lopes and Casson, ‘Brand’.

39. Camera di Commercio Italiana in New York (hereafter CCINY), Nel cinquentenario, 129.

40. OAA, 5, No. 3 (March, 1932), 8. Other examples include actions brought by P. Sasso & Figli and Filippo Berio & Co., two other well-known Italian exporters from Oneglia (Liguria) and Lucca (Tuscany) respectively. In the case of Sasso, the defendants were again the United Cicchetti Stores, Inc., P. Cicchetti & Co. and Nazareno Pichione & John in New York, who were accused of both filling Sasso’s cans with inferior olive oils and selling a blend consisting mainly of cottonseed oil in cans which − Sasso claimed − were deceptively coloured and labelled to imitate his brand. The lawsuit brought by Filippo Berio was against A. Ferrara & Bros, who ran a grocery store. This time the defendant admitted, first, packing mixtures of sesame oil with olive oil and selling these mixtures in cans supplied by the Superior Can Co., and, second, attaching labels with the word ‘Tiberio’ and ‘Luca & Co.’, in an attempt, according to the plaintiffs, to imitate the brand name of Berio from Lucca.

41. These strategies have been well documented for the wine industry. See for exemple Duguid, ‘Developing’; Duguid, ‘Networks’; Fernández, ‘Unsuccessful’; Simpson, ‘Selling’, and Simpson, ‘Too little’.

42. CCINY, Nel cinquentenario, 160.

43. See, among others, Dupré, ‘If it’s yellow’ for the case of butter in north America between the 1880s and the 1940s, and Stanziani, ‘Negotiating’ for wine, butter, and milk adulteration in France between 1870 and 1914.

44. Wood, ‘The Strategic’. For a more general approach to pure food regulation, see, for example, Law, ‘The Origins’ and Stanziani, ‘Negotiating’.

45. US Congress, Tariff Act, 243.

46. Tossi, ‘Protect Sales’. As in the early 1920s, many cases of fraud still consisted in repackaging mixtures of olive oil with other cheaper vegetable oils, which were sold in cans labelled with foreign names and symbols in an attempt to mislead the buyer. Together with this ‘traditional’ fraud, another more simple violation was becoming common: the short-filling of the containers. The most sophisticated fraud, however, consisted of blending olive oil with tea oil, a mixture that was difficult to detect by traditional chemical analysis, something which only became possible in 1936. CCINY, Nel cinquentenario, 129. Finally, misbranding practices were not uncommon either. See, for example, OAA, 5, No. 3 (March), 1932, 5, 9 and Servicio Informativo de la Federación de Exportadores de Aceite de Oliva de España (hereafter SIFE), Reports No. 1,494 (1932), 1,546 (1932) and 1,547 (1932).

47. For example, in 1926, Italian olive oil exporters (and importers) were accused of introducing adulterated olive oil to the US. These accusations mobilised both those involved in the business and the Italian Chamber of Commerce in New York. They probably also led Tossi to call the matter to the attention of the members of his association and to recommend that the product, either in cans or in bulk, should be imported directly from well-known and credited exporting firms even if this proved more expensive. See CCINY, Nel cinquentenario, 149 and SIFE, Supplement to the Report No. 199 (1927), copied from a letter sent by Tossi to the members of the Olive Oil Association of America on 2 September 1927.

48. Tolman and Munson, ‘Olive oil’. 62.

49. US Congress, Tariff Act, 245–46.

50. SIFE, Reports No. 1,494 (1932) and 1,495 (1932), originally published in OAA, volume V, 1932.

51. US Congress, Tariff Readjustment, 716.

52. In 1929, A. E. Rittwagen, Sabater’s agent in New York, reported that in the US the (Catalan) name of Gasull, the owner of the firm Establecimientos Félix Gasull, S.A., was associated with a very high-quality olive oil. Rittwagen regretted that the same could not be said of Sabater, suggesting the existence of a connection between the exporter’s name and product quality. Letter dated 19 March 1928. ACBC. FS. Letters to and from A. E. Rittwagen, New York (1923–1933), boxes 4 and 165 M respectively.

53. In 1921, the representative of the Pompeian Sea Food Co. claimed that the packagers of sardines and tuna fish in California used almost three-quarters of a million gallons of olive oil a year (around 2.6 thousand metric tons), but that all of it had to be imported because the oil produced in California contained a high percentage of free fatty acid. US Congress, Tariff Information, 241. While this statement probably requires some qualification, what is clear is that packagers of fish required a high-standard product, although they did not always make use of the same grades of olive oil. In fact, fish-canners’ demands for olive oil tended to differ, not only because of the particular variety of olive oil used in canning but also because of the quantity of refined olive oil introduced in the can and the amount of vegetable oils other than olive oil that they used.

54. AOE, 6, No. 70 (September 1934), 310; AOE, 7, No. 74 (January, 1935), 455; AOE, 7, No. 81 (September, 1935), 716.

55. Ministerio de Estado (hereafter ME), Estudio comercial, 8–9.

56. ME (1920), pp. 21–29, for a detailed review of the Argentinian legislation between 1913 and 1920.

57. The Spanish Chamber of Commerce in Buenos Aires opposed this new legislation forcefully; the law was confusing, since it not only failed to protect olive oil against adulterations but also showed that the Argentinian authorities were exclusively interested in protecting the interests of the national industry of vegetable oil rather than the domestic consumers. The main arguments of the Spanish Chamber of Commerce are summarised in SIFE, Reports No. 45 (1927), No. 137 (1927), No. 244 (1928), No. 605 (1929), No. 845 (1930) and Supplement to the Report, No. 1,028 (1930). For an opposing view in SIFE, Supplement to the Report No. 193 (1927), Supplement to the Report No. 358 (1928) and Supplement to the Report No. 352 (1928).

58. ME, El aceite español, 21–23.

59. Consejo de Economía Nacional, El aceite de oliva, 10–12.

60. Simpson, ‘The emergence’.

61. In the particular case of branding, see, for example, Wilkins, ‘When’ and Cason, ‘Brands’.

62. A short review of the literature on product differentiation and entry barriers can be found in Ramon-Muñoz, ‘Product’.

63. See, for example, Simpson, ‘Selling’, for fortified wines in Britain in the nineteenth century, and Fernández, ‘Unsuccessful’, for the case of the sherry industry in the twentieth century.

64. US International Trade Commission, ‘Olive oil’, 4.3.