Ron Strolic organic marketing barriers
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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
    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