How is recognition obtained?

In the agriculture and food sector, there are two major types of markets: commodities and value-added products.

The global commodities market is supplied by agricultural surpluses in major countries (European Union, Canada, United States). This market for the most part consists of basic products such as milk, cereal and meat. Prevailing prices in these markets are generally low and are likely to remain that way, at least according to the World Bank.

In contrast to the basic product market, there is also a niche market that includes more elaborate, value-added products such as country foods, organic foods and nutraceuticals, many of which are produced by the processing industry.

The value-added products market is subject to market rules that are fundamentally different from those for products sold on the mass market. As a general rule, the supply is fairly limited and demand relatively strong. Moreover, production is usually tightly controlled. In order to justify the added value attributed to them, each of them must meet precise specifications.

Once placed on sale, therefore, these foods have the following shared characteristics: their labels contain allegations or claims that in the eyes of certain consumers confer added value on the products.

For food production companies, this consumer segment represents a potentially lucrative market, providing them with numerous opportunities to increase their sales and profits. In return, these consumers have the right to demand authentic products.

For this reason the Québec government passed the Act Respecting Reserved Designations (A20.02) in 1996. This legislation was enacted to control the designations that are assigned to agricultural and food products as an attestation of their production method, region, and specificity. Another objective of this legislation is to monitor the use of these designations. It was replaced by the Act Respecting Reserved Designaitons and value-Added Claims on June 15, 2008.

These designations are signs of quality and only certain agricultural and food products may bear them. Their use is part of the repertoire of strategies firms or groups of firms can use to identify their products. These designations refer to one or more specific characteristics of a product and distinguish them from other common products in the same category.