Local Roots and Global Responsibility: Terroir Brands and Their Responsible Engagement

Abstract

The authors introduce the construct of terroir branding—distinct from country-of-origin effects and place branding—to explain how, in regions such as Champagne, France (wines), Biella, Italy (wool), and Vuelta Abajo, Cuba (cigars), competing local firms develop global brands while being engaged in responsible actions that influence the brand perceptions in the global marketplace. Terroir brands have three critical features: placial distinctiveness, craftsmanship specificity, and processing traditionalism. Terroir branding integrates firm-owned host brands with a collective regional brand. Drawing on the resource-based view, coopetition theory, and the concept of moral engagement, the authors identify a virtuous circle of local collective efficacy that supports the location and enables a terroir brand to be seen by global markets as being responsibly sustained. The authors also identify a vicious circle through moral disengagement that can lead global markets to perceive terroir brands as irresponsibly sustained. They identify hazards such as host-brand strength variability, rival set stability, locational ownership, and competitor concentration. Finally, they highlight the importance of local terroir branding using a broad spectrum of place-based characteristics and identify conditions under which terroir branding benefits an individual brand and the wider collective of brands, while sustaining the location.