Adopting EBT and Debit Technology at the Farmers Market Dr. Tim Woods Ag Economics University of Kentucky Janet Eaton KY Farm Market Association
Kentucky Direct Market Sales Million $ 16 14 12 10 8 6 4 2 0 1992 1997 2002 2007 Source: Census of Agriculture, various years 160 140 120 100 80 60 40 20 0 Number of Farm 2004 2005 2006 2007 2008 2009 Source: KDA and UK estimates
Kentucky Farm 2,500 Number of Vendors 2,000 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 Source: KDA and UK
Tracking Debit and EBT Sales Test Franklin County Owensboro Christian County Middlesboro Stanton Control Owen County Hardin County Woodford County Somerset Warren Test : Provided EBT/Debit machine, tokens, promotion budget, Training Data collected: monthly sales and change in sales, individual transaction sales, Repeat sales, EBT and Debit sales by market
Debit and EBT Expenses USDA Farm Market Improvement Grant KFMA and UK 5 units were provided to the Test locations Franklin, Owensboro, and Christian Counties had dedicated staff administrating program Small promotional fund for advertising and signage Unit cost: $1150 $45 monthly service (used on average 4 months) $0.10/EBT $0.40/Debit Most markets charged $1 transaction fee
Debit and EBT Revenues 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 EBT Debit Market Debit EBT Franklin 13534 2733 Christian 2258 1763 Owensboro 1580 1004 Middlesboro <100 <100 Stanton <100 <100 *All farm market info is based on preliminary data.
Sales Differences 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Over $750 in Vendor Sales Test Market Control Increase in Sales over Same Month Last Year 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Test Control *All farm market info is based on preliminary data.
Sales Differences 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Increase in Sales over Previous Month Test Market Control 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Average Selling Days Per Month Test Control *All farm market info is based on preliminary data.
Sales Differences Increase in Patron Visits over Same Month Last Year Increase in Patron Visits over Previous Month 45.0% 50.0% 40.0% 45.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% Test Market Control 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% Test Control 5.0% 5.0% 0.0% 0.0% *All farm market info is based on preliminary data.
Sales Differences Percent Repeat Customers Increase in Patron Visits over Previous Month 80.0 30.0% 70.0 60.0 50.0 25.0% 20.0% 40.0 30.0 20.0 10.0 Test Market Control 15.0% 10.0% 5.0% Test Control 0.0 0.0% *All farm market info is based on preliminary data.
Conclusions From Sales Data No significant evidence of sales increases to individual vendors using Debit or EBT for the KY test markets in 2009. No significant evidence of impact on patron visits or repeat customer sales for markets using Debit or EBT in the KY test markets in 2009
Is it worth considering? Urban markets are adopting Debit and EBT to meet new customer service demands Vendors in 3 markets learned quickly Adoption cost very low Probably not feasible for very rural markets Management commitments can be significant, especially initially
Debit Card Services in Perspective Services in most demand in KY Farmers' Market Sampling Expanded market days Expanded market hours Rest room access Debit card Cooking/recipe demonstrations Expanded parking Senior nutrition and/or food stamps Entertainment 9 10 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Based on 302 patron intercepts in 11 different KY Farm, Summer 2009 Services rated on 1 = not important to 10 = very important
Changing Market Customers Do you use a debit card? Number Percent Yes 212 71.9% No 83 28.1% Total 295 Based on 302 patron intercepts in 11 different KY Farm, Summer 2009
Success Factors High customer traffic Promotion to community EBT not difficult to add onto Debit program (although different selling rules) EBT difficult to justify as primary use Implementation manager very useful, especially initially
Acknowledgements Janet Eaton, Stephanie Wetzel, and the KFMA Board Sara Williamson & Nick Wright, Extension Associates Managers & Vendors at the test and control markets
ECONOMICS Contact Information Dr. Timothy A. Woods Extension Specialist in Horticulture Marketing The University of Kentucky s College of Agriculture Department of Agricultural Economics 400 Barnhart Bldg, Lexington, KY 40546 (859) 257-7270 Tim.Woods@uky.edu