FRUIT and VEGETABLE MARKETING

Small Farm ConferenceWednesday May 16, 2007

Dr. Allen F. WysockiFood and Resource Economics

(352) 392-1826 ext 403wysocki@ufl.edu

View this presentation at: http://www.fred.ifas.ufl.edu/~wysocki/Articulate/May-2007-Central-Florida-Small-Farms-Conference-F&V-Marketing/F&V-Marketing.html

Hosted by the Lake County, Orange County, and Seminole County extension offices

Marketing Fruits and Vegetables May 16, 2007 2

Looking into the Crystal Ball

The U.S. food system is changing

Access to large markets is diminishing

Understand value

Start small, think big

Marketing Fruits and Vegetables May 16, 2007 3INPUTSUPPLIES

AGRICULTURAL

PRODUCTION

COMMODITY

ASSEMBLY

INITIAL

PROCESSING

FURTHER

MANUFACTURING

WHOLESALING

RETAILING

CONSUMPTION

MAJOR ALTERNATIVE MARKETING CHANNELS OF THE US FOOD SYSTEM

Agricultural InputSuppliers

LocalAssemblers

TerminalAssemblers

Food Manufacturers

U.S. Consumers

GovernmentPurchases

Export Markets

ImportMarkets

Initial Food Processors

Integrated Food Service

Wholesalers/Distributors

Non-Integrated Grocery

Wholesalers

IntegratedGrocery

Wholesalers

Non-IntegratedFood ServiceWholesalers

Specialty Retailers Food Service Outlets

Agricultural Producers

Retail FoodStores

Marketing Fruits and Vegetables May 16, 2007 4

Are You Offering Value?

Why do buyers have price objections? Seller has not effectively communicated

Value is different for different customers Value is and not necessarily a firm

amount. Perceived value = ________________

Value

Perceived

Perceived BenefitsPrice

Marketing Fruits and Vegetables May 16, 2007 5

Accessing Wholesale/Retail Markets

State Farmers’ Market Sellers Larger produce grower/shippers Produce brokers Produce Suppliers Foodservice suppliers Independent retailers Restaurants

http://www.florida-agriculture.com/marketing/markets/sanford_market.htm

Sanford State Farmers’ Market

http://www.longandscottfarms.com/

Long and Scott

http://www.eastcoastfruit.com/index.html

East Coast Fruit Company, Inc.

http://www.chrobinson.com/

CH Robinson, Worldwide, Inc.

http://www.sysco.com/home.html

Sysco Foodservice

http://www.iga.com/

IGA

http://www.emerils.com/restaurants/orlando_emerils/

Emeril’s Restaurant-Orlando

Marketing Fruits and Vegetables May 16, 2007 6

Access to Wholesale/Retail Markets: The Pros

Generally a larger volume channel Size of the sale is a relative concept

Access to new and different markets

Less need for daily marketing once a relationship is established

Marketing Fruits and Vegetables May 16, 2007 7

Access to Wholesale/Retail Markets: The Cons

Larger volumes may be greater than producer’s capacity to supply

Buyer may want additional promotional support

Generally, you will sell at the lowest average market price in exchange for volume

Increased potential for being taken advantage of relative to the market

Marketing Fruits and Vegetables May 16, 2007 8

Producer must deliver consistent acceptable quality product

Producer must be able to supply products when and how buyers want them, including any packaging requirements

Producers may be required to meet 3rd party certification requirements

Barriers to access aplenty (e.g., corporate buying mentality, etc.)

Access to Wholesale/Retail Markets: The Challenges

Marketing Fruits and Vegetables May 16, 2007 9

One-on-One access to the end-users of your products (who you are may matter)

Smaller, more manageable volumes Generally receive a higher price vs.

wholesale More flexibility relative to your product

availability Increased ability to move all variability in

product quality

Access to Direct Markets: The Pros

Marketing Fruits and Vegetables May 16, 2007 10

Smaller volume requires more customers to move the entire crop

More daily marketing required Does this fit the operation and skills?

Just because you remove the middleman, doesn’t mean you can skip their functions May or may not earn higher profits

Is their a large enough customer base?

Access to Direct Markets: The Cons

Marketing Fruits and Vegetables May 16, 2007 11

Meeting customer expectations Restaurants Walk-in customers Internet sales

Access to various customer groups requires different approaches and skills

Can you constantly find ways to differentiate your product/service?

Access to Direct Markets: The Challenges

Marketing Fruits and Vegetables May 16, 2007 12

In Conclusion…

The U.S. food system is changing

Access to large markets is diminishing

Understand value

Start small, think big

Join organizations like the: FFVA http://www.ffva.com/

Farm Bureau http://floridafarmbureau.org/

Thank You

For more information visit the Small Farms web at http://smallfarms.ifas.ufl.edu

Take a virtual field day tour by visiting the Virtual Field Day web at http://vfd.ifas.ufl.edu

This presentation brought to you by the

Small Farms/Alternative Enterprises Focus Team.