Innovative Strategies for Benefiting from both "Direct to Consumer" and Traditional Marketing Channels

Lonni Davenport Kucik

  1. Identify Market Niches
    1. Market niche is
      1. Defined as - Areas of consumer need not being completely filled
      2. Often too small for larger businesses to pursue
      3. Constantly changing because the consumer and market environment is always changing - so monitoring change equals opportunity
    2. Niche opportunities - examples pursued by small scale agriculture
      1. Product Differentiation and Certification - set product/service apart from the crowd. Emphasize, capitalize on product/service's characteristics different from the competition
        1. Organic - pesticide free - certified
        2. Homegrown, Grown in Indiana
        3. Unique offerings - ethnic specialty products
        4. Business identification for accountability on quality, safety
      2. Value-Added Processing - adding value to raw product according to consumer demand.
        1. Create new product - and new product uses
        2. Take on middleman functions of changing product - retain more of consumer dollar spent on product
        3. Examples include cheese, meats, soaps, wine and vinegar, vegetable oils, pickles, fabrics, woodcraft, building materials
      3. Agri-tourism or Destination/Entertainment Farming - niche combining farm product and lifestyle with increased demand for leisure activities and educational experiences
        1. Encourages whole family to come to the farm for farm products
        2. Helps bridge the current disconnect between the consuming population and the farm - increasing consumers' understanding and appreciation of the source of their food
        3. Examples include Bed and Breakfast, school tours, rural culture workshops, harvest festivals, hunting, fishing, birding, photo treks
      4. Community Supported Agriculture - Partnership between consumer and producer
        1. Consumers share in risk with pre-paid subscription and sometimes in labor by helping with production and harvest.
        2. In exchange - they receive a share of product at harvest
        3. Most common with organic production systems

  2. Promotion Strategies
    1. Ways to reach and develop relationships with target consumers to encourage use of products/services offered
      1. Purchasing traditional media advertising (newspaper, radio, yellow pages, etc.)
      2. Organizing direct mailing of announcement flyers, coupons, newsletters, etc. to current consumers, and other target consumers
      3. Posting signs or posters in areas frequented by target consumer
      4. Participation in or hosting community, regional, or State special events for exposure and contribution to market area
      5. Participating in public interest events - events with community groups which builds a relationship and reputation as a generous and involved community member
      6. Utilizing the Internet - a growing business tool for exposure and sales
        1. Post homepage for business - increase exposure and information on business
        2. Links from related sites helps people become aware of your business
        3. Marketing/sales channel - actually able to take orders via the internet
        4. Great source of information - facilitates industry research
        5. Allows for consumer feedback
        6. AND MORE

  3. Collaborative Marketing Strategies
    1. Many marketing channels/opportunities require volume and postharvest handling activities beyond the capacity of small producers individually, but feasible collectively. Collaboration possibilities include:
      1. New and conventional cooperatives (grower owned entity that consolidates, prepares for forward distribution as buying entities require, markets, and delivers product)
      2. Marketing alliances / collaborations - formal and informal. Agreements/partnerships to work together to meet the buying entities product requirements
      3. Corporations - limited liability (LLC), sub-chapter S, and C. Organization/ownership structure to limit personal liability of each stockholder

Selected Resources

Marketing Strategies for Farmers and Ranchers. Offers alternatives to marketing commodities through conventional channels. USDA Sustainable Agriculture Network (SAN) publication. Contact NCR SARE 402-472-7081 or ncrsare@unl.edu. Online version at: www.sare.org/market99/index.htm.

Sell What You Sow: The Grower's Guide to Successful Produce Marketing, by Eric Gibson. 304-page book with specific strategies from master marketers around the country. Cost $22.50. New World Publishing, Auburn, CA. Credit card orders call: 888-281-5170, other orders call 530-823-3886, or email to: ericgib@earthlink.net.

Marketing Your Produce: Ideas for Small-scale Farmers is a collection of Growing for Market's best articles. Cost is $20 + $3 shipping and handling. Send check to Growing for Market, P.O. Box 3747, Lawrence, KS 66046 or call 800-307-8949.

Dynamic Farmers Marketing: A Guide to Successfully Selling Your Farmers' Market Products, by Jeff Ishee. Covers the best ways for farmers to display their products and themselves, the best items to sell, and how to interact with customers. Cost $16.95 from Bittersweet Farmstead, 540-886-8477.

The Legal Guide for Direct Marketing, by Neil Hamilton. Offers tips about legal issues t consider when direct-marketing farm products. Cost $20. Contact Agricultural Law Center, Drake University, Des Moines, IA 50311, 515-271-2947.

Making Your Small Farm Profitable, by Ron Macher, editor of Small Farm Today. Covers marketing and balanced farm management for the beginning or experienced farmer. Cost. $23.23 (includes shipping). Contact Small Farm Today, 800-633-2535.

Marketing For Success: Creative Marketing Tools for the Agricultural Industry, by Robert Matarazzo, Dow Hollow Publishing. Contact rjm@interactive.net or 908-475-4460.

Cheap But Good Marketing Research, by Alan R. Andreasen. 1988. A good text for understanding and planning market research. Appendix includes a thorough listing of secondary resources. Cost $24.95. Dow Jones-Erwin Publishers, Homewood, IL.
ISBN 0-87094-772-9

Developing a Strategic Marketing Plan for Horticultural Firms, by Gerald B. White and Wen-fei L. Uva. Dept. Agricultural, Resources, and Managerial Economics, College of Agriculture and Life Sciences, Cornell University, NY. gbw2@cornell.edu.

Marketing Options for Commercial Vegetable Growers: Publication exploring various marketing options for producers of vegetable crops. Univ. of KY, College of Agriculture, Cooperative Extension ID-134. Available online: www.ca.uky.edu/agc/pubs/id/id134/id134.htm.

Farmer/Consumer links. www.localfarm.net and www.smallfarms.com

Internet Marketing Center. Offers marketing tips and strategies, research resources, a free monthly newsletter and more. www.marketingtips.com/index.html.

Direct Marketing Books and Videos:

Direct Marketing of Farm Produce and Home Goods. A publication with direct marketing alternatives and strategies for beginning and established producers. Cost $3.50. Order through Department of Horticulture, University of Wisconsin Cooperative Extension, 1575 Linden Drive, Madison, WI 43706, phone 608-262-3346.

The Direct Marketing Resource Notebook by Nebraska Sustainable Agricultural Society. Includes case studies of different direct marketing enterprises, Midwestern state and federal marketing contacts, and an extensive resources section. Cost $20. Order 402-254-2289.

Direct Marketing Today: Challenges and Opportunities. A look at the direct marketing outlet options and survey of industry participants. USDA, Ag Marketing Service. Available at: www.ams.usda.gov/directmarketing/DirectMar2.pdf.

Facilities for Roadside Markets (NRAES-52); and Produce Handling for Direct Marketing (NRAES-51). From Roadside Marketing Series, Cooperative Extension. Cost $7 each; to order or receive additional information call Publications office at Cornell University: 607-255-2080.

Family Farm Series. Small Farm Center, University of California at Davis. Call Small Farms Center at 530-752-8136 for publication availability and costs.

Farmer Direct Marketing Bibliography. USDA/Agricultural Marketing Service. Online availability at: www.ams.usda.gov/directmarketing/.

Farmer-to-Consumer Marketing. Leaflet series PNW 201-206 provided as a cooperative effort between Washington State University, Oregon State University, and the University of Idaho. To order send check or money order to: WSU Bulletins Office, P.O. Box 645912, Pullman, WA 99164-5912. Each leaflet is $0.25, and include $1.00 for shipping and handling.

Farmers and their Diversified Horticultural Marketing Strategies, by the Center for Sustainable Agriculture. 50-minute video for $15. Contact 802-656-5459 or susagctr@zoo.uvm.edu.

Food Consumption, Prices, and Expenditures, 1970-97, by Judith Jones Putnam and Jane E. Allshouse, Economic Research Services, USDA (No. 965). Describes U.S. consumer purchasing habits from 1970 to 1997. Free, contact 800-999-6779 or www.ers.usda.gov/publications/sb965/.

Free Range Poultry Production and Marketing, by Herman Beck-Chenoweth. A guide to raising, processing, and marketing chicken, turkey and eggs. Cost $29.50. Contact 740-596-4379.

Internet Marketing for Farmers (FS 510) by Washington State University Cooperative Extension, King County. Free. Contact 206-296-3900.

Marketing Periodicals:

American Vegetable Grower or American Fruit Grower. A subscription magazine for produce growers and marketers. Cost $15.95 annually. Contact Meister Publishing at 440-942-2000

Growing for Market. A subscription newsletter for market gardeners or small producers. One-year subscription (12 issues) is $27. Send check or money order to Growing for Market, P.O. Box 3747, Lawrence, KS 66046 or call 800-307-8949.

Produce Business. A subscription magazine focused on produce retailing and retail management. Cost $48 annually. Contact 561-447-0810.

Small Farm Digest. A subscription newsletter published three times a year that discusses issues impacting today's small farmers. Free subscription. To subscribe contact the Small Farm Program, 800-583-3071.

The Packer. A business newspaper for the produce industry. Subscription cost $65 annually. Contact The Packer, 913-438-8700.

Marketing Web Sites:

Agricultural Direct Marketing E-mail Discussion Group (direct-mkt@reeusda.gov). Information about agricultural direct marketing. Send "subscribe direct-mkt" as a message to majordomo@reeusda.gov, with the subject line empty.

Altmarketing E-mail Discussion Group. A discussion list for farmers, educators and others interested in alternative/direct marketing. Send email to listserv@crcvms.unl.edu with command SUBSCRIBE altmarketing Firstname Lastname.

Agricultural Direct Marketing Information Site. Resources for farmers' markets and market farmers. www.emarketfarm.com.

Agriculture Marketing Service. USDA general website for marketing of agricultural products, including grading standards, market orders, export procedures, etc. www.ams.usda.gov

Agricultural Marketing Service's Farmers' Market. USDA resource site focusing on farmers' markets in U.S. www.ams.usda.gov/farmersmarkets

Agricultural Marketing Service , Farmer Direct Marketing. USDA resource site for information on direct marketing. www.ams.usda.gov/directmarketing.

Alternative Farming Systems Information Center. CSA resources for farmers & consumers. www.nal.usda.gov/afsic/csa or contact 301-504-6559; afsic@nal.usda.gov.

Sustainable Farming Connection. http://metalab.unc.edu/farming-connection. Offers a forum for farmers to find and share information including a diverse collection of resources and links about marketing.

Other Marketing Resources:

Fresh Vegetable Marketing Opportunities in Indiana. Department of Horticulture, Office of Agricultural Research Programs, Station Bulletin No. 64. Contact county extension office, or Publications Mail Room, 301 South 2nd St. Lafayette, IN 47901-1232, phone 765-494-6794.

Market opportunities and production strategies for fruit and vegetable growers. G.H. Sullivan and W. Dennis Scott. 1993. IHETS Professional horticultural workshop: VHO-21. Cost is $20; very limited supply. Available for loan from county extension offices or Purdue's Horticulture Department 765-494-1314.

Pastured Poultry Profits, by Joel Salatin. This how-to manual offers information about relationship marketing for poultry. Cost $30. Contact ACRES USA, 800-355-5313.

Postharvest handling of fruit and vegetables to achieve new market opportunities. W. Dennis Scott and G.H. Sullivan. 1993. IHETS Professional horticultural workshop:. VHO-22. Cost is $20; very limited supply. Available for loan from county extension offices or Purdue's Horticulture Department, 765-494-1314.

Salad Bar Beef, by Joel Salatin. This guide explores marketing beef in addition to production methods to raise superior beef on pasture. Cost $30. Contact ACRES USA, 800-355-5313.

The 2000 Directory of Flower and Herb Buyers, lists 36 companies seeking to buy all types of flowers and botanicals. Cost $15. Contact Prairie Oak Seeds, Marysville, MO, 660-562-3743.

The Blue Book, by the Produce Report Company. A book that is published twice a year (April 1 and October 1) which provides concise listing information on produce and transportation businesses in the U.S. Canada, Mexico and other international locations. This information helps business evaluate produce suppliers/distributors/retailers, etc. Available in hard copy or electronic form via subscription. Membership fee is $555 annually for the hard copy. For more information, see: www.bluebookprco.com

The Red Book, by Vance Publishing. This book is published twice a year (March and November) and describes itself as the "information and credit rating services for the produce industry". It includes produce and transportation company listing along with credit and performance ratings. Available in hard copy or electronic form via subscription. Membership fee is $625 annually. For more information call 916-438-0606 or see website: www.rbcs.com

Sustainable Agriculture