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Ron Strolic organic marketing barriers


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Ron Strolic organic marketing barriers

  1. 1. Improving Markets for Small and Mid-sized Organic Growers<br />Ron Strochlic<br />“Growing the Organic Market” <br />CCOF Conference<br />February 19, 2011<br />
  2. 2. Background<br />Organic sales up 15-20% per year <br />From $4b in 1997 to $25b in 2009<br />Organic historically considered a promising marketing niche for small and medium growers – has not been entirely the case<br />Marketing is a key factor constraining the success of small and medium organic farmers<br />
  3. 3. Research Questions<br />What are the main marketing challenges facing small and mid-size organic growers in California? <br />Grower and buyer perspectives<br />What are policy & program recommendations to <br /> improve marketing for these <br /> growers?<br />
  4. 4. About the study<br />Interviews/survey with<br />35 Farmers<br />22 Buyers<br />21 Key Informants<br />Survey - 103 farmers<br />3 Farmer Group Interviews<br />Focus on fruit and <br /> vegetable growers<br />
  5. 5. Overall findings<br />Marketing is a challenge!<br />For 80% of respondents<br />“Major problem” for half<br />42% had sold organic product as conventional<br />Most report multiple<br /> marketing channels<br />Main channels<br />Direct sales ~ 75% <br />Farmers markets ~ 65%<br />Wholesale ~ 60%<br />
  6. 6. Organic Marketing Challenges<br />Need to recoup higher production costs<br />Growth of organic sector and loss of niche markets<br />Certification costs and paperwork burden<br />Competing attributes - “local,” “sustainable” and “no-spray.” <br />Consumer concerns regarding safety of organic products<br />Limited access to organic price information<br />Limited university research and outreach for organic production and marketing<br />Low demand for organic products in certain regions<br />Other challenges are similar to those of all small farmers<br />
  7. 7. Main Marketing Challenges Cited by Farmers<br />Volume (too much or too little): 84%<br />Lack of price premiums: 66%<br />Accessing markets: 65%<br />Competition: 55%<br />Price information: 47%<br />Meeting buyer requirements: 37%<br />Language is a problem for most immigrant farmers<br />
  8. 8. Buyer Challenges<br />Price<br />“Fair” price based on real production costs is too high for many buyers, esp. institutional settings<br />Transaction costs & logistics<br />Per unit costs are higher when buying smaller amounts from multiple farms<br />Quality, appearance & packing<br />“It’s difficult to get a clean, consistent pack from small growers.”<br />Post-harvest handling is an issue – lack of coolers<br />
  9. 9. Buyer Challenges<br />Grower knowledge of business & markets<br />Growers need to know market conditions, pricing & competition before planting <br />Product consistency& availability<br />Buyers need to be assured of certain volume at a certain time<br />“Availability is less consistent and less predictable.” <br />Communication<br />Need for clear and frequent communication. Buyers need to know: <br />What farmers have, how much, when available <br />Need to know this before product is ripe! <br />
  10. 10. Buyer Challenges<br />Buyers seeking local organic products also cited challenges connecting with growers <br />Disconnect  need for better systems to provide growers and buyers with information about each other<br />
  11. 11. Opportunities<br />Values-based marketing is key<br />Small growers can compete on values, not price<br />Building strong relationships<br />Adaptive, flexible, creative marketing <br />Onlinecommunications & social networking<br />
  12. 12. Recommendations - Farmers<br />Small and mid-sized organic farmers can improve their marketing opportunities by: <br />Competing on values rather than price – “telling the story” of their farm <br />Diversified production and marketing<br />Accessing larger markets through coops, distribution hubs and bundled CSAs<br />Wholesale:focusing on quality and appearance, packing, knowledge of the wholesale market, frequent communication<br />
  13. 13. Recommendations - Buyers<br />Buyers can improve their ability to source from small and mid-sized organic farms by:<br />Educating growers on quality, communication and business standards<br />Develop cropping plans with growers to coordinate supply and demand<br />Communicating the importance of buying from small and mid-sized farms to customers<br />Supporting marketing coops and consolidation points to reduce transaction costs <br />
  14. 14. Recommendations- Policymakers<br />Policymakers can support small and mid-sized organic farmers by: <br />Support for programs supporting organic agriculture<br />Connecting growers and buyers through the development of online databases<br />Preferential purchase of local and organic food by public agencies<br />Expanded land-grant university organic research and outreach<br />Tailoring food safety and direct marketing regulations to the needs of small and medium organic farms<br />
  15. 15. Recommendations – NGOs<br />Organizations working with small and mid-sized organic farms can improve marketing opportunities by:<br />Informational exchanges between farmers and buyers <br />Centralized database of farmers and buyers<br />Farmer education - marketing, telling the story, working with wholesalers, online/digital marketing, etc. <br />Supporting distribution infrastructure<br />Technical assistance for limited-English farmers; linking immigrant/minority farmers with their communities<br />Consumer education on organic, food safety and the importance of buying from small and medium organic farms<br />
  16. 16. Farmer Interest in Solutions<br />
  17. 17. Specific Solutions<br />