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Small Farm Direct Marketing
Source:
An Overview of
Small Farm Direct Marketing
by M.
E. Swisher and James Sterns
Cooperative Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, 32611.

| Direct marketing
refers to selling that is based on a
personal, one-to-one relationship that ties farmers and consumers
together. Many times this relationship is face-to-face, like at
farmers' markets. Other times, the consumer and farmer may not actually
meet, for example, Internet sales.
How
Small Scale Farmers Can Use Direct Marketing to Their Advantage
Competing solely on price is rarely feasible for small scale farmers.
Farmers who accept the lowest price for their products must have the
lowest costs. Larger farms can almost always produce high volume,
uniform products more cheaply than smaller farms.
| While
small farmers cannot effectively compete with large scale
operations on price, their businesses are uniquely positioned to
compete on other, non-price factors. Competing on non-price factors
means that farmers must offer their customers something they want but
cannot buy at the grocery store, or anywhere else. Differences can
include: convenience, flavor, variety and novelty. |
|
- Convenience
Ready-to-eat salad mix is an example of products that are more
convenient for consumers and could be direct marketed by small-scale
producers effectively. Selling produce or meat with recipes and serving
suggestions is another way that farmers can make their products more
convenient than what is sold at the grocery store.
- Flavor:
Consumers often list taste and freshness as the top reasons for buying
directly from farmers. Producers who get their products to consumers
the same day they are harvested will always win on this issue. Also,
small scale producers can pay more attention to detail, which often
results in a more flavorful product.
- Variety:
Small farmers can produce 20 different varieties of tomatoes, or grow a
multitude of vegetables, flowers and raise livestock. Small farms can
diversify in a way that larger farms do not, and offer their consumers
a wide variety of products.
- Novelty:
This
ties into the variety and specialty issues. Farmers who are tuned into
their customers' preferences are prepared to respond to those
preferences with their products.
- Specialty Products:
Labeling can distinguish your unique products from the generic.
"Eco-labels" are a good example of this: locally grown, certified
organic, grass-fed or free-range. When consumers purchase products with
these labels, they are expressing preferences; they are "voting with
their dollars."
Direct
Marketing Alternatives for Small Farmers
There are a variety of ways that small scale farmers reach their
customers with direct marketing. Some may be more suited to your farm
and products than others. For many farmers, a combination of several
marketing outlets is effective. Specific examples of direct marketing
strategies follow below along with a breakdown of their advantages and
challenges:
|
Advantages |
Potential
Issues |
| U-Pick |
* No harvest costs
* No transportation costs
* No intermediary
* Crop/Product mix is not critical |
* Location is critical
* Legal liabilities
* Intrusion on family life
* Parking and staffing
* Limited growth potential and product
value |
| Roadside Stand |
* No intermediary
* No one on your farm
* Can re-sell products you don't raise
* Long potential season, depending on
the crop mix
* Usually limited transportation and
packaging |
* Location is critical
* Appearance, upkeep of the stand
* Advertising
* Crop/Product mix
* Staffing - long business hours
* Parking and traffic |
| Farmers'
Market |
* No intermediary
* No one on your farm
* Product mix can be supplied by other
vendors
* Networking opportunity |
* Requires farmer to be good salesperson
* Can be time intensive
* Packaging and presentation are
important
* Distance to market
* Market fees
* Market season and days may not fit
your needs
* Competition among vendors |
| Internet
or Mail
Order |
* Reduced physical infrastructure needs
* No one on your farm
* Very flexible hours (weekends and
evening are fine!)
* Growth is virtually (no pun intended)
unlimited |
* Management
of web site
* Freshness advantage may be lost - not
appropriate for extremely perishable items
* Payment mechanism and security of
transactions
* Packaging
is critical
* Shipping cost and reliability |
| CSA
and Subscription |
* Up-front payments help with cash flow
* Income doesn't depend on weather
(farmers market) or crop prices (retail)
* Acts as an "insurance policy" in case
of crop failure in the case of CSAs
* May help with labor shortage; many CSA
members volunteer on farm
* Satisfied members are great advertising |
* Hard "sell" because of the up-front cost to the consumer
* Requires quality consistency with
variety of products
* Member turnover
* Requires highly organized farmer and
"core group" of helpers
* Delivery logistics can be complicated |
| Cooperative
Marketing |
* Large potential for growth
* Pooled resources - purchases,
advertising, transportation, etc.
* Product mix and variety of group is
greater than any one producer
* Little added infrastructure or demand
on your farm
|
* Now you're part of a group - you may not like all of the decisions
* Legal costs and time to establish a
co-op
* Management is critical - hiring
professionals may be the best route
* Competition among members (prices go
up so I decide to sell my stuff somewhere else, for example) |
| Consumer
Cooperatives |
* Stable, non-volatile market
* High growth potential
* Farmer gets high portion of food dollar
* Small farmer investment
* Farmers are consumers too!
|
* Requires organization of or by consumers
* High degree of management required
* Staff/personnel issues
* Legal responsibilities
* Formal organization with rules and
regulations, just like a grocery store |
| Institutional
Markets |
* Non-volatile market
* Very long planning cycle (up to a year
in advance)
* High potential for growth in Florida,
with the importance of cruise lines, amusement parks, etc. |
* Up front legwork - contacts
* May require that farmers or group of
farmers meet regulatory requirements
* Failure to deliver is a disaster
* May be suitable for a limited number
of products
* Transportation, delivery
* Requires large and consistent volume |
|
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