Marketing of Food: Alternative (Direct) Strategies
MARKETING OF FOOD
Alternative (Direct) Strategies
Direct marketing refers to the strategy in which the producer of a commodity sells that commodity retail, directly to the consumer or end-user, rather than through a broker, distributor, or wholesaler. Direct markets for producers of food commodities include roadside stands, pick-your-own, farmers' markets, community-supported agriculture, mobile marketing, and mail-order sales. The supply of many food products through direct channels will fluctuate in accordance with the local harvest calendar. This is particularly true for fresh fruits and vegetables and less so for other foods, such as milk and milk products, eggs, meats, fish and poultry, grains, beans, and cereals.
In the United States, direct marketing continues to grow as a method for small-and medium-sized producers to increase their profits. Several forms of direct marketing—farmers' markets, roadside stands, Community Supported Agriculture (CSA) farms, and pick-your-own operations—have accounted for most alternative marketing strategies. Newer forms, such as "farm-to-school" connections and Internet marketing, are also being developed and piloted in many locations through the United States. Direct marketing data from the Census of Agriculture showed that between 1992 and 1997, the number of farms involved in direct marketing increased 7.8 percent to 93,140 farms. The total value of direct-marketing sales and direct-marketing sales per farm also increased.
"Alternative" or direct-marketing opportunities are part of a new agriculture that is being referred to as civic agriculture. The name suggests a locally based agricultural and food production system that is tightly linked to a community's social and economic development and to enhancing social capital. While civic agriculture may not represent a challenge to the conventional agriculture and food industry, it does include some innovative ways to produce, process, and distribute food. Additionally, the connections and relationships that are possible between producers and consumers from these marketing channels are unique to community-based food systems and civic agriculture.
Several factors have led to a growing consumer interest in purchasing directly from farmers: desire for fresh, high-quality products, the ability to personally interact directly with farmers who grew/raised the food, and interest in supporting local, small farms. Availability of product information such as growing method, instructions about use, recipes, and taste samples also draw customers to direct-marketing outlets.
Farmers' markets, now an integral part of the urban/farm linkage, have continued to rise in popularity, mostly due to growing consumer interest. The number of farmers' markets in the United States has grown dramatically, increasing 63 percent from 1994 to 2000. According to the 2000 National Farmers' Market Directory, nearly 3,000 farmers' markets now operate in the United States. This growth indicates that farmers' markets are meeting the needs of an increasing number of farmers with small-to medium-sized operations. Small farm operators benefit most from farmers markets—those with less than $250,000 in annual receipts who work and manage their own operations meet this definition (94 percent of all farms). Farmers' markets are also an important source of revenue. In the 2000 USDA Farmers' Market Study, 19,000 farmers reported selling their produce only at farmers markets. Communities also benefit from farmers' markets. Dollars spent on food are recycled several times within the community and thereby help boost the local economy.
Farmers' markets also serve an important role in increasing community food security. In many urban centers where fresh, nutritious foods are scarce, farmers markets increase the availability and access of these options for segments of the population that need them most. Farmers' markets also help to provide nutrition education, focusing on selection, storage, and preparation of a wide diversity of fruits and vegetables. Nearly 60 percent of markets participate in WIC Farmers' Market Nutrition Program, most accept food stamps (although the development of electronic benefit transfer [EBT] will make this difficult at many markets) as well as other local and/or state nutrition programs. A quarter of all farmers' markets participate in gleaning programs aiding food recovery organizations in the distribution of food and food products to needy families.
USDA's Women, Infants, and Children (WIC) Farmers' Market Nutrition Program (FMNP), established in 1992, provides additional coupons to WIC participants that they can use to purchase fresh fruits and vegetables at participating farmers' markets. The program has two goals: To provide fresh, nutritious, unprepared, locally grown fruits and vegetables from farmers' markets to WIC participants who are at nutritional risk; and to expand consumers' awareness and use of farmers' markets. Fiscal Year 2000 federal funding for the WIC Farmers' Market Nutrition Program was $15 million. The FMNP operates in thirty-nine state agencies, including four Indian tribes, one territory, and the District of Columbia.
Roadside stands or markets are a type of direct marketing system where a grower establishes a selling place (stand) near a roadway and sells produce directly to consumers. Often a stand is located on a farm or orchard. Produce sold in a roadside stand may be grown exclusively on the farm or may be purchased from outside sources. A roadside stand may be open only during harvest periods or throughout the year, depending on produce supply sources.
To producers, a roadside stand often represents a supplemental source of income, additional employment for family members, and a way to market surplus produce. Besides measurable financial benefits, producers establish relationships through direct exchange with customers. These relationships provide critical feedback to farmers when making planting decisions, developing customer education, and developing marketing strategies.
Roadside stands allow direct market sales without off-farm transportation costs, although some stands are located off the farm to get closer to traffic volume or population centers. Generally, marketing costs depend on the size of the retail outlet. These range from self-serve tables at the end of a driveway to pseudo-supermarkets with a huge selection of off-farm merchandise in addition of farm products. As volume, traffic, and product selection increase, so too will stand size, operating costs, and management time.
This type of direct marketing, where customers come to the farm and harvest produce directly, is most common at fruit farms in the northeastern United States. As fewer families now "put up" (can, freeze, or otherwise preserve) large quantities of food, the "farm experience" has become a more important reason for people to pick produce at a farm.
Through the school meals programs during the school year and summer programs, schools, colleges, and universities represent a largely untapped opportunity to strengthen the market for farmers and increase access to locally grown, high-quality foods for young people. Such direct purchases are increasing through an expanding number of farm-to-school projects throughout the country.
Direct Marketing as a Way to Build Civic Agriculture
Increasingly, alternative or direct-marketing channels are seen as engines for growth in civic agriculture. Since over 80 percent of the consumer food dollar currently goes to pay for the marketing bill, leaving less than 20 cents for every dollar for the farmer, direct marketing may be critical to the economic survival of agriculture.
See also Farmers' Markets; Food Cooperatives; Marketing of Food; Retailing of Food; WIC (Women, Infants, and Children) Program .
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Jennifer L Wilkins
Seniors Farmers Market Nutrition Program
The Seniors Farmers Market Nutrition Program (SFMNPP) is a new program established by USDA's Commodity Credit Corporation (CCC). Under the program, CCC makes grants to states and to Indian tribal governments to provide coupons to low-income seniors that may be exchanged for eligible foods at farmers' markets, roadside stands, and community-supported agriculture programs. USDA CCC awarded almost $15 million in grants to thirty-one states and five Indian Tribal Organizations for the new program. State departments of agriculture, aging, and health and tribal governments administering the grants have developed creative partnerships. They are utilizing existing infrastructure to offer farmers' markets the opportunity to expand to serve seniors and to certify and distribute benefits to the estimated 370,000 low-income seniors this pilot is expected to serve.