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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

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

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  1. 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

  2. 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…

  3. 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.

  4. 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.

  5. 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.

  6. 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:

  7. 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”

  8. 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.

  9. 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

  10. 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

  11. 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.

  12. 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)

  13. 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.

  14. Agritourism • On-farm retail sites • U-pick • Farm tours • Overnight stays • Culinary/educational retreat. • Recreational land use • Petting zoos • Crop festivals

  15. 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.

  16. Agritourism: Challenges • Unhappy neighbors! • Zoning restrictions. • Liability insurance. • Tendency to move away from practicing agriculture and toward entertainment.

  17. 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.

  18. Value-Added: Challenges • Regulations and processing infrastructure. • Additional time and labor. • Need to develop a strong business plan.

  19. 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.

  20. 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)

  21. 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

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