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Marketing Strategies
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Organic plums grown in Portland,Ore.,
draw a premium at area farmers markets.
– Photo by
Jerry DeWitt |
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The methods that organic farmers use to market their products are
as diverse as the types of organic farming systems proliferating
across the country. According to the OFRF survey, about 80 percent
of organic farmers market through wholesalers, 13 percent sell directly
to the consumer at farm stands, farmers markets and local restaurants,
and the remainder market direct to retail outlets or stores.
One of the hardest challenges for farmers converting to organic
is learning how to market products before growing them. Yet, many
organic farmers become very successful marketers, particularly those
farmers who direct market. They work hard to build relationships
with their customers, and rely upon creativity, education and development
of alternative outlets, such as alliances, cooperatives and other
resource-pooling ventures.
"Many of the most successful growers are the best marketers,"
said extension agent Brad Brummond. "Long-term growers have
good relationships and are top-notch marketers. They spend time
figuring out what the market wants and they negotiate prices, because
in organic systems farmers can really affect the final price by
the relationships they develop with buyers."
Farmers markets are an excellent direct market venue for
organic farmers. Between 1994 and 2002, the number of U.S. farmers
markets grew 79 percent, reflecting the expanding market base. "You
may not see a big premium at a farmers market, but you get more
customers, people get to know you, and most markets welcome organic
farmers," said Dan Nagengast, executive director of the Kansas
Rural Center and an organic farmer.
Grower Alliances. Pooling resources can be invaluable. Organic
growers in North Dakota lacked lucrative markets for their fresh
produce, meat, grain and value-added products. Ben Larson, a researcher
and organic farmer, contacted the Organic Alliance in St. Paul to
develop a marketing strategy, consumer education information, and
a media plan. Larson also went directly to large grocery stores
to introduce available product. He then coordinated all the interested
local growers so the stores would only need to make one call a week
for their order.
As part of the plan to help educate consumers, Larson provided
stores with "point of sale" materials and advertised on
public radio and in newspapers to promote organic foods. He also
started a new farmers market to focus on locally grown foods. As
a result, sales increased at the farmers market and the grocery
stores - and their success selling organic potatoes encouraged the
grocers to try other products.
"We were trying to reach the larger segment of the population
who will choose organics if they're available in the grocery store,"
said Larson.
Restaurants. Many organic farmers direct market to high-end
restaurants and farmers markets. A New York chef, quoted in a cover
story on organic agriculture in a fall 2002 Newsweek said, "When
people taste asparagus or string beans grown in richly composted
soil, they can't get over the depth and vibrancy of the flavor."
The farm-restaurant relationship has worked well for Urban Oaks
Farm in New Britain, Conn. "Even if you grow the best tomato
in the world, if you can't sell it, it isn't going to work,"
said Urban Oaks co-manager Tony Norris, who grows greens, herbs,
tomatoes and eggplant, among other vegetables. Norris sells much
of his organic produce to Hartford restaurant chefs based on relationships
he built with care.
He advises farmers to arrange an appointment with a sympathetic
chef, and bring a sample of products, a price list and clear billing
and delivery system. "You have to think it through," he
said. Norris considers himself a "consultant" to the chefs
he supplies, but "if you're not comfortable doing that, maybe
a partner or spouse can do it."
Marketing Companies. Organic farmers Richard and Peggy Sechrist
of Fredericksburg, Texas, who have a 50-head herd of beef cattle
and raise 750-1000 pastured chickens per month, formed a company
specifically for marketing purposes. When they found it too difficult
to reach the volume they needed to turn a profit in direct sales,
they developed a label to differentiate their products and fetch
a premium. Under this label, they now sell their own products and
those of neighboring ranchers raising organic meat. Sales go to
an initial customer base of about 750 built through mail order,
farmers markets, booths at fairs, and small health food stores,
but new purchasers also find them.
Their financial success comes from the strong market for chicken
and relationships with food distributors. But they also work constantly
to educate consumers about their product, how their meat was raised
and the issues around organic farming.
Asked whether their changes in production practices and organic
certification have increased the profitability of their ranch, Peggy
Sechrist responded positively. "Definitely," she said.
"Our distributors understood 'organic' and now understand 'grass-fed,'
" a distinction that translates to higher returns.
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Challenges for Organic Farmers
INFORMATION. Extension agents and
farm advisers are increasingly knowledgeable about organic
farming, although you still may find it difficult to gain
information through typical channels. Many extension agents
can recommend someone who specializes in organic production.
A nationwide survey conducted by the Organic Farming Research
Foundation found that organic farmers find other farmers,
suppliers, grower's associations, books, conferences, seminars
and periodicals the most useful sources of information. The
Appropriate Technology Transfer for Rural Areas (ATTRA) program,
a national sustainable agriculture information service, provides
free technical assistance to farmers, ranchers, educators
and others, including numerous publications on organic production
and a well-respected "Organic Matters" series (See
"Attra Resources"
for more information about ATTRA and "Resources"
for more information about the print series.)
PRICING. According to USDA's Economic
Research Service, organic farmers face challenges in finding
markets and negotiating prices. Organic farmers say they would
like to see more information on organic prices and lists of
buyers. Many small to mid-size organic farmers form cooperatives
or alliances with other organic farmers to strengthen their
negotiating power (see "Marketing Strategies" on
p. 18). A new website from the Rodale Institute provides a
weekly comparison of conventional and organic prices for 40
products, from grains to vegetables. (www.newfarm.org).
USDA's daily Market News Report for Boston, Mass., and occasionally
other terminal markets, reports organic vegetable premiums
www.ams.usda.gov/fv/mncs/termveg.htm).
Also, a private firm based in Florida, Organic Food Business
News FAX Bulletin (OFBN), has been selling a weekly organic
price report containing farm gate prices for grains and produce
since the 1990's (407-628-1377).
RESEARCH. Research on organic farming
practices has lagged significantly behind conventional research
due to a lack of institutional interest in organic farming,
the complex nature of organic farming systems, and the fact
that most agricultural researchers are trained to focus on
disciplinary rather than integrated systems research. Now,
more organic research is occurring at state and federal institutions,
much of it funded by SARE, and while results are not yet widely
disseminated, research summaries and links to other reports
are available at www.organicaginfo.org. ATTRA and OFRF also
summarize organic research. (See "Resources,")
TIME MANAGEMENT. Recordkeeping associated
with certified organic production is time consuming. You must
keep accurate post-certification records on the production,
harvesting and handling of agricultural products sold as organic.
Don't underestimate the additional time needed to gain new
skills, such as managing crop species, controlling weeds mechanically
and undertaking new marketing strategies. Organic farming
requires preventative rather than prescriptive strategies
and a considerable amount of planning ahead.
GMO CONTAMINATION. In some regions of
the country, contamination of organic crops with genetically
modified crops has become a problem. In particular,organic
corn and soybean loads grown in the Midwest have been rejected
by purchasers after the crop was found to be contaminated.
"For North Dakota organic growers it's the number one
issue," said Brad Brummond, a Walsh County, N.D., extension
agent who specializes in organic production. "We've already
given up on canola because we can't keep it clean." Brummond
recommends that organic growers communicate with their neighbors
who are growing transgenic crops to try and get as much distance
as possible. He also points out that contamination can result
from shared equipment such as elevators and trucks. |
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