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Ron Strolic organic marketing barriers

Ron Strolic organic marketing barriers






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    Ron Strolic organic marketing barriers Ron Strolic organic marketing barriers Presentation Transcript

    • 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
    • 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
      “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.”
      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