ron strolic organic marketing barriers
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Improving Markets for Small and Mid-sized Organic Growers
Ron Strochlic
“Growing the Organic Market”
CCOF Conference
February 19, 2011
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Background¨ Organic sales up 15-20% per year
– From $4 b in 1997 to $25 b 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
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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?
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About the studyInterviews/survey with¨ 35 Farmers¨ 22 Buyers¨ 21 Key Informants¨ Survey - 103 farmers¨ 3 Farmer Group
Interviews¨ Focus on fruit and vegetable growers
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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%
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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
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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
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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
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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!
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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
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Opportunities¨ Values-based marketing is key
– Small growers can compete on values, not price
– Building strong relationships– Adaptive, flexible, creative marketing – Online communications & social
networking
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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
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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
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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
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Recommendations – NGOsOrganizations 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
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Farmer Interest in Solutions
Category Importance (1-10)
% Responding “Important”
Direct Marketing 7.4 92%
Regulations and Certification 6.9 86%
Information, Communication and Technology
6.6 90%
Wholesale Distribution 4.5 65%
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Specific SolutionsRecommendation % Responding
“Important”
Promotion of buy-local campaigns 95%
Food safety regulations accounting for farm size and marketing channels 91%
More consumer education on organics and food safety 90%
More consumer education on the meaning of organic 86%
Farmer-to-farmer networking opportunities for sharing information 85%
Funding to help smaller farms comply with food safety regulations 84%
Databases to connect growers and buyers based on products 84%
Simplified organic certification process for smallest-scale farmers 83%
Policies supporting local and organic purchasing for public agencies 81%
Increasing grants for direct marketing and value-added production 79%