Ron Strolic organic marketing barriers

Improving Markets for Small and Mid-sized Organic Growers
Ron Strochlic
“Growing the Organic Market”
CCOF Conference
February 19, 2011

Background
Organic sales up 15-20% per year
From $4b in 1997 to $25b in 2009
Organic historically considered a promising marketing niche for small and medium growers – has not been entirely the case
Marketing is a key factor constraining the success of small and medium organic farmers

Research Questions
What are the main marketing challenges facing small and mid-size organic growers in California?
Grower and buyer perspectives
What are policy & program recommendations to
improve marketing for these
growers?

About the study
Interviews/survey with
35 Farmers
22 Buyers
21 Key Informants
Survey - 103 farmers
3 Farmer Group Interviews
Focus on fruit and
vegetable growers

Overall findings
Marketing is a challenge!
For 80% of respondents
“Major problem” for half
42% had sold organic product as conventional
Most report multiple
marketing channels
Main channels
Direct sales ~ 75%
Farmers markets ~ 65%
Wholesale ~ 60%

Organic Marketing Challenges
Need to recoup higher production costs
Growth of organic sector and loss of niche markets
Certification costs and paperwork burden
Competing attributes - “local,” “sustainable” and “no-spray.”
Consumer concerns regarding safety of organic products
Limited access to organic price information
Limited university research and outreach for organic production and marketing
Low demand for organic products in certain regions
Other challenges are similar to those of all small farmers

Main Marketing Challenges Cited by Farmers
Volume (too much or too little): 84%
Lack of price premiums: 66%
Accessing markets: 65%
Competition: 55%
Price information: 47%
Meeting buyer requirements: 37%
Language is a problem for most immigrant farmers

Buyer Challenges
Price
“Fair” price based on real production costs is too high for many buyers, esp. institutional settings
Transaction costs & logistics
Per unit costs are higher when buying smaller amounts from multiple farms
Quality, appearance & packing
“It’s difficult to get a clean, consistent pack from small growers.”
Post-harvest handling is an issue – lack of coolers

Buyer Challenges
Grower knowledge of business & markets
Growers need to know market conditions, pricing & competition before planting
Product consistency& availability
Buyers need to be assured of certain volume at a certain time
“Availability is less consistent and less predictable.”
Communication
Need for clear and frequent communication. Buyers need to know:
What farmers have, how much, when available
Need to know this before product is ripe!

Buyer Challenges
Buyers seeking local organic products also cited challenges connecting with growers
Disconnect  need for better systems to provide growers and buyers with information about each other

Opportunities
Values-based marketing is key
Small growers can compete on values, not price
Building strong relationships
Adaptive, flexible, creative marketing
Onlinecommunications & social networking

Recommendations - Farmers
Small and mid-sized organic farmers can improve their marketing opportunities by:
Competing on values rather than price – “telling the story” of their farm
Diversified production and marketing
Accessing larger markets through coops, distribution hubs and bundled CSAs
Wholesale:focusing on quality and appearance, packing, knowledge of the wholesale market, frequent communication

Recommendations - Buyers
Buyers can improve their ability to source from small and mid-sized organic farms by:
Educating growers on quality, communication and business standards
Develop cropping plans with growers to coordinate supply and demand
Communicating the importance of buying from small and mid-sized farms to customers
Supporting marketing coops and consolidation points to reduce transaction costs

Recommendations- Policymakers
Policymakers can support small and mid-sized organic farmers by:
Support for programs supporting organic agriculture
Connecting growers and buyers through the development of online databases
Preferential purchase of local and organic food by public agencies
Expanded land-grant university organic research and outreach
Tailoring food safety and direct marketing regulations to the needs of small and medium organic farms

Recommendations – NGOs
Organizations working with small and mid-sized organic farms can improve marketing opportunities by:
Informational exchanges between farmers and buyers
Centralized database of farmers and buyers
Farmer education - marketing, telling the story, working with wholesalers, online/digital marketing, etc.
Supporting distribution infrastructure
Technical assistance for limited-English farmers; linking immigrant/minority farmers with their communities
Consumer education on organic, food safety and the importance of buying from small and medium organic farms

Farmer Interest in Solutions

Specific Solutions

Ron Strolic organic marketing barriers

by tinadora on Mar 22, 2011

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