Direct Sales - Direct Interactions: The Importance of Social Interactions at Farmers Markets

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Muriel Strickland
3 years ago
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What is the negative effect of the increased work hours?
Does the increase in spending increase or decrease in the market?
What type of products are more likely to be purchased at the market?

1 Direct Sales - Direct Interactions: The Importance of Social Interactions at Farmers Markets Alan Hunt Northeast Midwest Institute

2 Research Questions Initial Research Questions: Why do people go to farmers markets? Is there a relationship to open-space? Research Questions that Emerged: What is the role of consumer and producer interactions in a direct market? What does this tell us about this type of market and agriculture in general?

Research Questions that Emerged: What is the role of consumer and producer

3 Methods Survey development Expert review and local knowledge from Maine Dept. of Agriculture Consumer focus group (n=1, n=5) Producer interviews and background research Consumer and producer pretests Survey consumers and producers at 8 markets In person surveys Consumers self selected (n=216) All producers surveyed (n=81) Completed August 2004 Analytical tools Descriptive statistics Cluster analysis Correlations Regression (Linear and Probit)

producer pretests Survey consumers and producers at 8 markets In person surveys Consumers self selected (n=216)

4 Research Sites Orono Home of UMaine Farmington Interior Maine Falmouth Portland suburb Portland Maine s largest city Maine Orono farmers market Coastal Regional service centers Portland farmers market

5 What are the social aspects? ¾ Marketing and Economics ¾ Community ¾ Environmental Quality

6 Marketing & Economics What is your annual household income? (35% non-response) Distribution of Farmer Income by Quartile Compared with 2000 Census Data Survey Farmers n=48 Farm, ranch, and other agricultural managers n=140,950 Farmers and ranchers n=362, Income % 50% 75% Quartile Distribution of survey farmers not statistically different from farm managers (D=.3333, p=1) and Farmers (D=.3333, p=.6) using the Kolmogorov-Smirnov test. Bar Harbor farmers market

and other agricultural managers n=140,950 Farmers and ranchers n=362,670 70000 60000 Income 50000 40000 30000 20000 10000 0 25%

7 Marketing & Economics Influences on Farmer Income ln(farmer income) = α (years at market) + β (years at market)2 + γ (hours per year) + δ (hours per year)2 + ρ (product type: nursery/floriculture) + ε Linear regression n = 39 R2 =.3205 p-value = F-statistic = Income increases as experience and hours worked increases, BUT diminishing returns limits income growth. Each year at the market increased farmer income by 7.6% with an effect of diminishing returns reducing income by 0.3% per each additional year squared at the market. (p>.05) Each additional 1000 hours worked significantly increased income by 66.5% but has an associated 13% negative effect because of diminishing returns. (p<.05) Selling nursery/floriculture products increased income by 44%. (p=.055)

868 Income increases as experience and hours worked increases, BUT diminishing returns limits income growth. Each year at the market increased farmer income by 7.

8 Marketing & Economics Influences on Consumer Spending Linear regression n = 212 R2 =.3115 p =.0000 F-statistic = 6.17 Positive Influences Making the market a family event increases spending by $6.78 Each $10,000 increase in income increases spending by a $1 Talking to farmers about seasonal products increases spending by $5.70 Enjoying the market increases spending by $4.16 Each additional trip to the market per month increases spending by $1.52 Negative Influences Freshness as a reason to shop at the market

78 Each $10,000 increase in income increases spending by a $1 Talking to farmers about seasonal products increases spending by

9 Community Farmers' Markets Consumer Segments n=211 Lifestylers Lifestylers Average age - 47 Income - $74,169 Families with children - 34% Distance traveled to market Spending per visit - $24.42 Chemical concerns - 95% Farmer contact important - 85% Quality most important - 51% Purchase vegetables - 94% Would visit farm - 83% Seasonal Shoppers 72% Utiliarians Average age - 53 Income - $89,531 Families with children - 22% Distance traveled to market Spending per visit - $20.47 Chemical concerns - 58% Farmer contact important - 36% Quality most important - 74% Purchase vegetables - 89% Would visit farm - 65% Utilitarians 26% 2% Seasonal Shoppers Average age - 68 Income - $83,500 Families with children - 20% Distance traveled to market Spending per visit - $23.00 Chemical concerns - 0% Farmer contact important - 33% Quality most important - 25% Purchase vegetables - 100% Would visit farm - 20%

$89,531 Families with children - 22% Distance traveled to market - 5.7 Spending per visit - $20.

10 Community Motivations to Shop at Farmers' Markets n=203 Intrinsic qualities of food 57% Market qualities and social interaction 30% Support Farmers Local Local Economy Freshness Local Quality Organic Factors external to the market 13% Atmosphere Fun Friendly Community

Support Farmers Local Local Economy Freshness Local Quality

11 Community Influences on Meeting People Do you meet people that you know at the market other than vendors? Binary choice probit model n=210 Formula: Meet = Permanent resident + Miles from market + Shopping frequency + Size of "local" + Household size + Age Change in probablity of meeting someone Variable Effect of being a permanet resident Distance from home to market from 0-10 miles Distance from home to market from 0-20 miles Trips to market from once a month to once a week 1 Change in perception of local from County to State Change in household size from 1 to 2 Change in household size from 2 to 3 Change in age from 20 to 49 Change in age from 49 to 70 All values significant at p=.050 except Wald chi-suqare p= Permanent Not Permanent 22% -3% -7% -19% -14% 57% 31% -27% -7% 59% 34% 64% 38% 42% 16% 65% 32% which is significant at p=.056 Mean 72% State

Effect of being a permanet resident Distance from home to market from 0-10 miles Distance from home to market from 0-20 miles Trips to market from once a month to once a week 1 Change in perception

12 Links to Environmental Quality Correlations with farmers changing products to meet consumer demand if: they practice low spray/low chemical use (28% correlation) use the environment as a selling point (32% correlation) (both significant at p =.05) n = 65 Auburn farmers market

chemical use (28% correlation) use the environment as a selling

13 Links to Environmental Quality Farmer Adoption of Value-added Practices Practice Heirloom varieties Low spray/low chemical use Certified organic Uncertified organic Free range animal production Product labelling/differentiation No genetically modified organisms* Hormone-free animal production Antibiotic-free animal production Other None * The sample size for this response is 46. Percent of Farmers n=61 44% 36% 34% 34% 31% 26% 25% 23% 20% 10% 5% Orono farmers market

genetically modified organisms* Hormone-free animal production Antibiotic-free animal production Other None * The

14 Needs of Market Farmers Vendor's Future Needs for Support Category Marketing Informal/Workshop training Other - total 1 Trained labor/apprentices Collaboration with other businesses Loans Formal or technical training Advice Help to comply with regulations Other investment captial (e.g. partnerships) Percent of Vendors n=66* 65% 24% 21% 6% 17% 15% 14% 12% 9% 9% * This question had a non-response rate of 18%. 1 Other response volunteered from respondents, percent calculated from total. Blue Hill farmers market

15 Where to now? 1. Research that educates and informs about the role of direct marketing as one of many marketing options, with its own unique benefits. Evaluate USDA data by Market Type (e.g. Age) Review the USDA farmers market survey due out this fall Falmouth farmers market

16 Where to now? 2. Improve the marketing resources available to farmers markets nationally. National Farmers Market Working Group Funded through Risk Management Agency at USDA 13 partner market associations, farmer training organizations, and technical assistance groups Underserved Farmer Recruitment Handbook for Farmers' Market Managers Best Practices Guide for Direct-marketing at Farmers Markets Auburn farmers market

associations, farmer training organizations, and technical assistance groups Underserved Farmer

17 Where to now? 3. Look for opportunities (or make them) for the 2007 Farm Bill. Farm and Food Policy Project Local and Regional Food System concepts Strong focus on scaling up successes learned from direct-marketing Working with many organizations nationally Orono farmers market

Farm and Food Policy Project Local and Regional Food System concepts Strong

18 Acknowledgements Randy Kramer advisor Jon Eisen-Hecht technical advice Mary Ellen Johnston ME Dept. of Ag. Deanne Herman ME Dept. of Ag. The farmers market coordinators Edna Bailey Sussman Foundation Fund Contact: Alan Hunt, Northeast Midwest Institute, Auburn farmers market

Marketing and Promotion Resources: Leveraging Existing Programs and Resources

Marketing and Promotion Resources: Leveraging Existing Programs and Resources Dawn Thilmany, Ph.D. Professor Department of Agricultural and Resource Economics Colorado State University Kynda R. Curtis,

Direct Sales - Direct Interactions: The Importance of Social Interactions at Farmers Markets

What is the negative effect of the increased work hours?

Does the increase in spending increase or decrease in the market?

What type of products are more likely to be purchased at the market?