Organic Direct Marketing
Why Direct Marketing? Small-scale producers can compete in a local market. Puts Puts power back into the hands of the producer. Maximizes income by selling direct to the consumer. Produces Produces new relationships between the producer and the consumer. Value Value in knowing where food comes from and how it is produced.
Knowing what s s happening in the marketplace is the difference between the farmer who makes it and the farmer who doesn t t make it. -Don Anderson, Specialty Vegetable Grower* *taken from ATTRA s publication Direct Marketing
Challenges to Direct Marketing Time! Time! Good Good communication & people skills. Quality Quality and consistency. Legal Legal regulations. Market Market saturation and oversupply of niche markets.
Tips for Successful Direct Marketing Talk with other farmers. Do your market research and find a niche. Create a marketing plan. Remain consistent. Don t t undersell your product or your neighbor. Stay attentive to market changes. Add value. Stay connected with your customers. Be organized and deliver on time. Know the value of your product and don t t be afraid to tell people how good it is.
Market Research Who Who is your target audience? Talk Talk with customers, local stores, food clubs, ethnic stores, restaurants and find out if there is an unfilled niche. What What are the ages, incomes, lifestyles and ethnic affiliations of your buyers? What are their wants? Where Where do they live? Develop Develop a customer profile based on the answers to these questions.
Market Research Who Who is your competition? Why Why do people buy from your competitors? Are there ways you can improve on what they are doing? How How is their product similar or different than yours? What have they done to stay in tune with market trends?
Market Research Understand your product. Read Read everything you can about your product sources, marketing, production, processing, packaging and sales. Be on top of the trends by reading culinary magazines and talking with restaurateurs. Innovate!
30-mile market technique Most Most customers of small, direct market farmers live within thirty miles of point of sale. Do your research within this area. Thorough market research will reduce business risk, identify problems in the market as well as new opportunities for profit. Avoid Avoid wasting time and money marketing to the wrong people by knowing your market well.
Building a Market Plan Create a marketing plan based on your research. Can be one component of your whole farm business plan. A good plan will define the consumer, the products and services they want, AND the most effective promotion and advertising strategies for reaching those customers. Clarifies objectives, appropriate actions, projected income, pricing structures, costs and potential profitability.
Elements of a Marketing Plan Marketing situation ~ your customers, your products, your competition, etc. Marketing objectives ~ your goals, diversification ideas and future markets. Marketing strategies ~ how you will promote or advertise, your marketing channel, what you will produce. Budgets ~ estimated costs and return based on sales and strategies for monitoring costs. Action plan ~ steps to reach your goal (i.e., newspaper advertisement, make flyers or brochures, get a space at the farmers market etc.) Evaluation ~ summary of progress on your marketing objectives (monthly, annually etc.)
Niche Markets Niche marketing is a method of differentiating your product from all the other products on the market. Types of niche markets include grass-fed and grass- finished, organic, free-range, range, salmon-safe, safe, natural and family farm. You can differentiate your product through adding value, i.e. garlic braids, cut flower bouquets, sausages, bagged salad mix, etc.
Niche Markets Educate your consumers about the benefits of your niche product. If raising grass-fed meat, tell a story about the animals, the farm, the grass, everything and all that goes into your product. Build a relationship with your customer. Know their names. Create a bond and build trust. Create a mission statement for your farm and display it boldly so people can understand why you are in business. Stay current with niche market trends.
Value-Added Marketing By processing or modifying your product through cooking, churning, culturing, drying, etc. you add value. It is more labor-intensive, requires more management and investment, but you can charge more for your product. Relies Relies heavily on good marketing skills and promotion. Be aware of rules and regulations regarding processing.
Rules & Regulations for Direct Marketers Whichever type of direct marketing channel you choose, there are laws and rules to consider. There are various special inspections, exemptions and other legal issues for livestock producers to understand in order to market directly to consumers. Resources The Legal Guide for Direct Farm Marketing OSU Extension Small Farms http://smallfarms.oregonstate.edu Oregon Department of Agriculture Food Safety Division www.oda.state.or.us
How Law Relates to Direct Farm Marketing Can raise issues of customer satisfaction and liability. Processed food can raise food safety concerns. Specialty items like eggs or meat have licensing and inspection requirements. Local zoning laws and business licensing come into play with on-farm sales. Subscription sales and home deliveries raise concerns about payment and business relations. Issues of liability and land-use come into play with agri-tourism and entertainment farming.
Types of Direct Marketing Farmers Markets Roadside Markets, Farm Stands and On-Farm Sales CSA and Subscription Institutional Marketing Restaurants
Farmers Markets Farmers markets are hot!
What You Need to Know About Farmers Markets Farmers markets offer a secure, regular and flexible outlet for marketing where a vendor can sell a wide range of products. Farmers markets are a good place for beginning farmers to market their products. You can sell beef, pork and lamb directly to the consumer at a market as long as the meat has been processed at a licensed USDA facility. You must have a license from ODA as well. You can sell eggs at the farmers market without an egg handler s license and without any labeling as long as you are selling eggs from your farm and no one else s s farm. Poultry processors of 20,000 birds or less per year are exempt from f the USDA inspection requirements if they raise, slaughter and sell their own product. Selling at the farmers market can lead to other sales, i.e. ethnic markets or subscription sales.
More on Farmers Markets All farmers markets have rules developed by the farmers market board that vendors must agree to follow in order to sell at the market. Vendors will have to pay a daily fee for the booth space, usually around $15 per space (most vendors take two spaces). There is a market manager for each market, who is responsible for running the market and enforcing rules. Ashland and Medford Farmers Market: Tuesdays and Thursdays, Rogue Valley Growers and Crafters Market, 888-826 826-9868 or http://roguevalleygrowersandcraftersmarket.com roguevalleygrowersandcraftersmarket.com/ Grants Pass: Saturdays at 4 th & F Street, 541-476 476-5375, or http://www.growersmarket.org www.growersmarket.org/ Other towns have smaller farmers markets like Selma or Eagle Point, which may be a good way to break into your area.
Subscription Farming & Community Supported Agriculture CSA movement began in the U.S. in the 1980s. It is a community-based food system that relies on trust between the farmer and the eater. A formal arrangement between farmer and eater where the farmer supplies food on a weekly basis to the eater with a set price paid at the beginning of the season. The farmer and eater share in the risk of farming together, celebrating a bountiful harvest and sharing in the risks of crop failures. Many CSA farms require the members to commit time to the farm so that they can understand what growing food is all about.
More on CSA You can also have dairy CSA, where customers buy shares in the cow or goat as well as supply meat and eggs to CSA members. Planning and organization is key to CSA from planning the staggered harvests to managing the CSA subscription list. Offers a secure and reliable market for farmers and produces healthy and fresh food for urban dwellers and others. Provides up-front income to the farmer at the beginning of the season in order to budget out expense needs. Puts a face on food and reinvigorates community.
Good CSA Websites Fully Fully Belly Farm http://www.fullbellyfarm.com www.fullbellyfarm.com/ Angelic Angelic Organics http://www.angelicorganics.com www.angelicorganics.com/ Siskiyou Siskiyou Sustainable Cooperative http://www.siskiyoucoop.com/index.html Gathering Together Farm http://www.gatheringtogetherfarm.com www.gatheringtogetherfarm.com/
Farm Stands & On-Farm Sales If you are located on a busy road, consider putting together a farm store in your barn or other farm structures. It is easier to sell your produce straight from your farm and encourages getting to know your customer. Building materials, permits, insurance and other expensive legal obligations can be a barrier to opening a farm stand. Sell products from other farms like honey or soaps. This attracts more customers if you have diversity of product.
Restaurant & Specialty Food Stores Health Health food stores and restaurants pay good prices for quality produce, meat and eggs. It takes time to establish a relationship with restaurants and stores. Quality, Quality, consistency and post-harvest handling are big issues that growers must face. Restaurants provide opportunities for developing specialty and niche products.
More on Restaurants & Stores Restaurants buy in limited quantities, so lining up a few restaurants can justify your deliveries. Talk Talk with stores and restaurants before your growing season and ask them what they would buy or use in their menus. Take Take samples of your product to restaurants and stores.
Institutional Marketing Selling directly to institutions gives farmers new and reliable markets. Consumers gain access to higher-quality food and more food dollars are invested into the local economy. One constraint is that most institutions use national food distributors so it is hard to break into this system. Also, education is key.
What You Need to Know about Institutional Marketing Program coordination is key. Farmers must be able to supply food in quantities that meet the needs of the institution Producers must be able to assure food quality and food safety and follow federal meat processing regulations You will need to create a marketing arrangement with the institution and efficiently distribute and transport products to institutional buyers. Initial program implementation takes time and energy.
Distribution Approaches A farmer s s cooperative. A local non-profit group acts a distributor and broker. A local wholesaler acts as a distributor and broker. Farmers markets serve as the central location for pick- up of farm products. Private food service companies that contract with colleges or other institutions to procure, process and deliver local food from farmers.
Last Thoughts on Institutional Marketing If interested, find a facilitator or coordinator who can begin researching the possibilities for institutional marketing locally (i.e. college student, non-profit, faculty member). Form a food advisory committee, which will include farmers, food purchasers, kitchen personnel, school board members, and other representatives (extension, etc.). Start slow and do the necessary research to ensure success.
Resources for Information on Institutional Marketing OSU Small Farms Program can assist and facilitate a group of farmers interested in designing an institutional buying program that works for them. Other partners might include THRIVE, SOU, Jackson County School District, Rogue Community College, SWCD, etc. ATTRA, www.attra.org Community Food Security Coalition, www.foodsecurity.org National Farm to School Program, www.farmtoschool.org
Local Diversified Marketing Farms Whistling Duck Farm, Applegate Valley Farming 22 organic acres since 1992. Sell to a variety of retail outlets including the Ashland Food Coop, Gooseberries and Shop N N Kart as well as restaurants, growers markets,, and a farm stand. They add value by pre-washing and bagging salad mix. Niche marketing includes certified organic and salmon safe.
Siskiyou Sustainable Cooperative CSA Program 10 farms growing diverse veggies 105 105 families subscribe Distribution in Grants Pass, Medford & Ashland Farmers Farmers sign up for crops, come together once a week to pack boxes Limited Limited marketing by farmers, organized by coordinators, guaranteed market at beginning of season
Resources USDA Agricultural Marketing Service, www.ams.usda.gov Oregon State University Small Farms Program, http://extension.oregonstate.edu/sorec/about/smallfarm s.php Appropriate Technology Transfer for Rural Areas (ATTRA), www.attra.org The New Farm: Farmer-to to-farmer Know-How, www.newfarm.org USDA Sustainable Agriculture Research and Education, www.sare.org New Farm Options http://www.uwex.edu/ces/agmarkets/index.html
More Resources Direct Farm Marketing and Tourism Handbook http://ag.arizona.edu/arec/pubs/dmkt/dmkt.html Robyn Van En Center www.wilson.edu/csacenter Alternative Farming Systems Information Center www.nal.usda.gov/afsic North American Farmers Direct Marketing Association www.nafdma.com Oregon Small Farms Farm Direct Marketing Conference in February. Attend the annual Food Connection where chefs meet up with growers to establish marketing connections.
Last Thoughts on Direct Marketing Be creative and innovative. Diversify Diversify and differentiate. Go for quality, consistency and flavor and your markets will grow. Be organized and on time. Develop Develop very good communication and shrewd marketing skills. Tell Tell your story and don t t forget to have fun.