department of agricultural economics organic marketing study overview by simon weseen
TRANSCRIPT
Department of Department of Agricultural Agricultural Economics Economics
Organic Organic Marketing Marketing
Study OverviewStudy OverviewBy Simon WeseenBy Simon Weseen
Purpose and ObjectivesPurpose and Objectives PurposePurpose
Profile 4 commodities as they move from producer Profile 4 commodities as they move from producer to end consumer (wheat, lentils, oats, flax)to end consumer (wheat, lentils, oats, flax)
ObjectivesObjectives Provide a description of the vertical supply chainProvide a description of the vertical supply chain Identify issues and opportunities for the marketing Identify issues and opportunities for the marketing
of these commoditiesof these commodities Determine if there are opportunities for the gov’t to Determine if there are opportunities for the gov’t to
facilitate industry development (e.g. provide facilitate industry development (e.g. provide information)information)
Provide new producers with basic marketing Provide new producers with basic marketing informationinformation
Identify opportunities for further research Identify opportunities for further research
Need for Marketing Need for Marketing StudyStudy
Few studies in the area of organic Few studies in the area of organic marketingmarketing Thompson (2001) examined feed Thompson (2001) examined feed
markets in Europe and the USmarkets in Europe and the US Alberta Food and Rural Development Alberta Food and Rural Development
(2001) profiled an organic grain and (2001) profiled an organic grain and oilseed enterpriseoilseed enterprise
Neither study attempted to Neither study attempted to understand the entire supply chain understand the entire supply chain for non-feed commoditiesfor non-feed commodities
Need for Study cont’dNeed for Study cont’d
The organic industry is rapidly The organic industry is rapidly expanding and is now entering expanding and is now entering mainstream marketsmainstream markets New marketing information requiredNew marketing information required
New entrants into the industry may New entrants into the industry may require information about organic require information about organic marketsmarkets
Examples of Examples of Issues/OpportunitiesIssues/Opportunities
Why does Saskatchewan export raw Why does Saskatchewan export raw commodities and import finished goods?commodities and import finished goods?
How can local processors develop How can local processors develop relationships with local retailers?relationships with local retailers?
Is there a lack of marketing information Is there a lack of marketing information available to producers?available to producers?
Are producers, marketers, processors Are producers, marketers, processors and certifiers satisfied with the and certifiers satisfied with the relationships that they have with each relationships that they have with each other?other?
Issues and Opportunities Issues and Opportunities Cont’dCont’d
What types of end products are What types of end products are produced from commodities grown produced from commodities grown on the Prairies?on the Prairies?
How do producers and other How do producers and other industry groups perceive regulation?industry groups perceive regulation?
How can producers maximize their How can producers maximize their returns?returns?
Approach to StudyApproach to Study
Survey’s conducted on 4 major groupsSurvey’s conducted on 4 major groups Producers, marketers, processors, and Producers, marketers, processors, and
wholesaler/retailerswholesaler/retailers ““Mirror Image” approachMirror Image” approach
Interviewees are asked the same questionsInterviewees are asked the same questions Can determine if all industry participants Can determine if all industry participants
perceive the same problems and perceive the same problems and opportunitiesopportunities
Can make recommendations to industry Can make recommendations to industry based on results based on results
ApproachApproach ExampleExample
Marketers indicate that they are providing Marketers indicate that they are providing producers with all information required to sell a producers with all information required to sell a cropcrop
In contrast, producers indicate that they need more In contrast, producers indicate that they need more information to sell e.g. time to sell, what to grow, information to sell e.g. time to sell, what to grow, etcetc
Result: Result: Marketer loses producer as potential clientMarketer loses producer as potential client Producer loses potentially valuable marketing opportunityProducer loses potentially valuable marketing opportunity
Potential Recommendation:Potential Recommendation: Marketers can keep producers happy by providing Marketers can keep producers happy by providing
additional informationadditional information Lobby gov’t to provide additional marketing informationLobby gov’t to provide additional marketing information
Preliminary ResultsPreliminary Results
Results will be presented in a series Results will be presented in a series of short industry papersof short industry papers
Current Results are based only on Current Results are based only on producer surveyproducer survey
Analysis of Organic Wheat Buyers in Analysis of Organic Wheat Buyers in Saskatchewan: A Vertical Coordination Saskatchewan: A Vertical Coordination ApproachApproach Examines the type of marketing Examines the type of marketing
arrangements that offer producers the arrangements that offer producers the highest return on wheathighest return on wheat
ConclusionsConclusions There are significant differences in farm price and There are significant differences in farm price and
marketing costs under alternative marketing marketing costs under alternative marketing arrangementsarrangements
Producer owned marketing firms were found to Producer owned marketing firms were found to generate the highest profit per tonne for generate the highest profit per tonne for producersproducers
Organic Producers’ Perceptions of Organic Producers’ Perceptions of Their MarketersTheir Marketers Examines the perceived importance of Examines the perceived importance of
various functions performed by marketersvarious functions performed by marketers Examines the effectiveness of marketers at Examines the effectiveness of marketers at
carrying out these functionscarrying out these functions E.g. advice on timing of sale, what to grow, E.g. advice on timing of sale, what to grow,
future market prospectsfuture market prospects Conclusions:Conclusions:
Producers were generally pleased with serviceProducers were generally pleased with service Young producers and very large producers Young producers and very large producers
were less satisfied with marketing services were less satisfied with marketing services
Organic Producers’ Perceptions of Organic Producers’ Perceptions of Market Information AvailabilityMarket Information Availability Examines specific problems that Examines specific problems that
producers may have with marketing their producers may have with marketing their wheatwheat E.g. Contracts not honoured, quality and E.g. Contracts not honoured, quality and
price disputes, can’t find buyers, no market price disputes, can’t find buyers, no market infoinfo
Conclusions:Conclusions: Producers feel that they have much less Producers feel that they have much less
market information than buyersmarket information than buyers There may be a role for public or private There may be a role for public or private
market information organizationmarket information organization
Organic Producers’ Perceptions of the Organic Producers’ Perceptions of the Role of CBsRole of CBs Examines the importance of various Examines the importance of various
functions performed by certifiersfunctions performed by certifiers Examines the effectiveness of certifiers at Examines the effectiveness of certifiers at
performing these functionsperforming these functions ConclusionsConclusions
Producers are divided on the importance, Producers are divided on the importance, appropriateness and effectiveness of services appropriateness and effectiveness of services provided by CBs (e.g. connecting with buyers, provided by CBs (e.g. connecting with buyers, research)research)
Less experienced and larger producers are less Less experienced and larger producers are less satisfied with services performed by certifierssatisfied with services performed by certifiers
Organic Producers’ Perceptions of Organic Producers’ Perceptions of Organic Regulation in CanadaOrganic Regulation in Canada Examines producers opinions on Examines producers opinions on
regulating the organic industry in Canadaregulating the organic industry in Canada E.g. How would regulation affect market E.g. How would regulation affect market
access? What are the main marketing access? What are the main marketing challenges for the organic industry?challenges for the organic industry?
Conclusions:Conclusions: Producers support regulation that provides Producers support regulation that provides
market accessmarket access Developing a mandatory standard is deemed Developing a mandatory standard is deemed
more important than educating and promoting more important than educating and promoting organics to consumersorganics to consumers
TimelineTimeline
Near completion of survey stageNear completion of survey stage Next Stages: Next Stages:
Data AnalysisData Analysis Writing of Industry Papers Writing of Industry Papers Marketing Guide?Marketing Guide?
Industry papers available at our Industry papers available at our tradeshow booth - come visit!tradeshow booth - come visit!
Questions or Questions or Comments?Comments?