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Building Relationships in Today’s Changing Marketplace: Direct Marketing Strategies Presented by: Fred Berman WSDA Small Farm and Direct Marketing Program Cultivating Success Class October 13, 2009 Direct Marketing: Basics

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building relationships in today s changing marketplace direct marketing strategies

Building Relationships in Today’s Changing Marketplace:Direct Marketing Strategies

Presented by: Fred Berman

WSDA Small Farm and Direct Marketing Program

Cultivating Success Class

October 13, 2009

direct marketing basics
Direct Marketing: Basics

Marketing strategies where the farmer sells his/her own product. “Relationship Marketing”

Direct-to-Consumer:

  • Farmers Markets, CSA, Farm stand, & U-pick

Direct-to-Retail:

  • Grocery stores (Co-ops), Restaurants, Institutions (Schools, hospitals, etc.)

Other Alternatives:

  • Internet, Agritourism, Food buying clubs, other…
direct marketing some good reasons
Direct Marketing: Some Good Reasons

Why add direct marketing to your marketing plan:

  • Receive a higher percentage of the retail food dollar.
  • Diversify your production and your marketing.
  • Have more control over your product.
  • Developing a market base creates relationships that engender more stable sales.
  • Put a “face” on agricultural production.
  • Receive direct appreciation for your products.
  • Contributes to a healthy local food system.
diversity is strength
Diversity is Strength
  • Consider diversifying production to meet many different markets.
  • Don’t rely on just one, or even two, markets for your products.
  • Consider both wholesale and direct marketing as a part of your overall plan.
  • Diversification is key to sustainability.
direct marketing some challenges
Direct Marketing: Some Challenges
  • Regulation and licensing requirements for selling direct.
  • Processing infrastructure.
  • Dealing with the public can be challenging.
  • No slacking! Product quality, consistency are key.
  • Showing up when you don’t always feel like it.
  • Competition exists everywhere.
today s new farmer
Today’s New Farmer
  • Be developer, producer, packer, marketer, sales person.
  • Assess all their strengths and make use of them.
  • Think about consumer trends & about “niches” for common products.
  • To be willing to try new ideas.
  • Must be a “people” person.

Relationship marketing requires farmers to:

farmers markets
Farmers Markets
  • WA has over 140 markets state wide.
  • Combined sales topped 58 million in 2008.
  • Successful in both rural and urban areas.
  • Not your grandpa’s “truck-market”
farmers markets considerations
Farmers Markets: Considerations
  • Costs of labor and transportation.
  • Building customer base takes time.
  • Consider selling at several markets a week.
  • Plan marketing into your production schedule.
  • Your new role as agricultural liaison!
  • Enjoy interacting with people.
  • Be flexible, clean, and professional.
  • F. M. - a great place to begin direct marketing.
having a stake in the farm community supported agriculture csa
Having a Stake in the Farm: Community Supported Agriculture (CSA)
  • Customers buy a “share” of the harvest at the beginning of the season, and receive a box of mixed fruits and vegetables each week through the growing season.

Multiple models:

  • single farm;
  • multiple farms – market basket;
  • CSA tag-on (fruit, flowers, eggs, meat)
  • RSA! Restaurant Supported Agriculture
csa considerations
CSA: Considerations
  • Experienced growers
    • Planning ahead to have product each week
    • Diversity in each box
    • Top-quality produce
  • Organic/Sustainable oriented consumer
  • Maintain communication with customers
    • Weekly newsletters, work/farm parties, surveys, recipes, anecdotes & FUN stories
direct to restaurants
Direct-to-Restaurants
  • Today’s consumer will eat 45% of their meals outside the home.
  • Many chefs are seeking distinction and are capitalizing on increased consumer demand for local foods.
  • Independently owned, higher-end restaurants.
more direct to restaurants
more: Direct-to-Restaurants
  • Can be a fickle market or it can be a very strong market: Relationship is key.
  • Requires top-quality; consistency; communication.
  • Payment is often made only once a month.
  • Delivery is most often required by the farmer; sometime two times a week.
  • Organic certification is a plus.
  • Seasonality (flexible menu planning)
farm to cafeteria
Farm-to-Cafeteria
  • K-12, Universities, Colleges, Hospitals, Nursing homes, State agencies.
  • Growing demand in this sector.
  • Greatly contributes to community health and nutrition.
  • Good market for farms who have experience in wholesale.
agritourism
Agritourism
  • On-farm retail sites
  • U-pick
  • Farm tours
  • Overnight stays
  • Culinary/educational retreat.
  • Recreational land use
  • Petting zoos
  • Crop festivals
agritourism market overview
Agritourism: Market overview
  • Cultural heritage and eco-tourism are the fastest growing sectors of the tourism industry.
  • People are taking more frequent but shorter vacations than they did in the past.
  • Weekend and day trips are becoming more common as people (and especially families) explore entertainment and enrichment options near where they live.
  • 30% of all tourists today are “knowledge seekers”
  • High quality, genuine, “real” experiences are what many people are seeking -- not just entertainment.
  • People are willing to pay for things today that only a generation or two ago would have seemed silly.
agritourism challenges
Agritourism: Challenges
  • Unhappy neighbors!
  • Zoning restrictions.
  • Liability insurance.
  • Tendency to move away from practicing agriculture and toward entertainment.
value added products
Value-Added Products
  • Examples : processed foods, packaged foods, meat & poultry
  • Capture a high price for your product.
  • Meet customer needs.
  • Extend season of products.
  • Longer retention of seasonal employees.
  • Differentiate your product.
value added challenges
Value-Added: Challenges
  • Regulations and processing infrastructure.
  • Additional time and labor.
  • Need to develop a strong business plan.
labeling branding
Labeling/Branding
  • Differentiate your product.
  • Potentially higher premiums.
  • Capture greater market share.
  • Contributes to consumer awareness of agriculture.
  • Value-Added: 57% of all consumers would purchase an eco-labeled product (Organic, Salmon Safe, Food Alliance Certified, ‘Local’, etc.)
  • Assist in direct marketing strategies.
resources for alternative marketing
Resources for Alternative Marketing
  • Other Farmers!
  • Visit Farmers Markets and retail stores.
  • Internet sites.
  • WSDA Small Farm & Direct Marketing Program
  • WSU Small Farm Program
  • Washington State Farmers Market Association
  • USDA Ag Marketing Service (AMS)
washington state department of agriculture small farm and direct marketing program
Washington State Department of Agriculture: Small Farm and Direct Marketing Program

Contacts:

Fred Berman, Program Coordinator

(360) 676.2059, fberman@agr.wa.gov

Patrice Barrentine, Program Coordinator

(360) 902.2057, pbarrentine@agr.wa.gov

P.O. Box 42560, Olympia, WA 98504

http://agr.wa.gov/marketing/smallfarm