New Directions in Alabama Agriculture 8

New Directions in Alabama Agriculture: Niches, Chains, and Relationships : 

New Directions in Alabama Agriculture: Niches, Chains, and Relationships Joseph J. Molnar Agricultural Economics and Rural Sociology Auburn University Butler-Cunningham Conference Montgomery 8 October 2004

Objectives : 

Objectives Clarify notion of market niche in farming Identify marketing chains and their implications for producers Discuss community- supported agriculture (CSA)

Alabama’s 72 farmers’ markets : 

Alabama’s 72 farmers’ markets

Farmer's markets : 

Farmer's markets When people come looking for an experience, Generally don't work when they depend on third-party vendors Replacement of farmers with resale vendors seemed to kill a downtown Birmingham market under the red mountain expressway in the early 1990s Same mistake in the 1980s with state farmer's market Montgomery's downtown curb market near Crampton bowl retained relationships and atmosphere Birmingham’ Pepper Place is pricier and spiffier

Marketing Niche : 

Marketing Niche

Uses of term Niche (Nich, Nish) N. : 

Uses of term Niche (Nich, Nish) N. Physical A recess in a wall, as for holding a statue or urn A cranny, hollow, or crevice, as in rock Socioeconomic A situation or activity specially suited to a person's interests, abilities, or nature: found a niche in life A special area of demand for a product or service: the best carving pumpkins in East Alabama Biological Function or position of an species within an ecological community Particular area within a habitat occupied by a species

A Niche Market : 

A Niche Market A focused segment of demand for a good or service A product or service that is not otherwise supplied by mass retailers A narrowly defined group of potential customers An acute interest in a specialized product, experience, or service Direct, on farm OR at other venues or modes

Niche Marketing : 

Niche Marketing Finding a unique aspect or type of buyer focusing efforts on reaching that niche Differentiate product, or set it apart from those of competitors Target to a select group of customers with unique needs or interests Promoting through web site, flyers, advertising, speaking

Some Popular Niches : 

Some Popular Niches Organic and natural foods, cut flowers, vegetables and decorative vegetables Building a customer base either by word of mouth or through advertising Connections to identity of farmer, land, locality Agrotourism

"U-pick" Operations : 

"U-pick" Operations Location, location, location 100+ in Alabama Renewed growth in popularity Combining experience with product

Practical Market Research : 

Practical Market Research Ask buyers and customers what they want If you own a roadside stand, ask those people who purchase from you or shop at your stand, Why they stopped? What are they looking for? What else can you do to meet their needs?

Supply Chains : 

Supply Chains

Supply Chain Management : 

Supply Chain Management A procurement model Streamlining the distribution system Reducing number of transactions Firms want to treat fresh produce like other food Commodities with more stable pricing and volumes

Fresh Produce Industry : 

Fresh Produce Industry Greater vertical coordination of the distribution system Via more supply chain oriented procurement models Growth of the Supercenter format Compelling force on all retailers

Supply Chain Elements : 

Supply Chain Elements

Consumer Interest in Organic : 

Consumer Interest in Organic A Supply Chain in formation Whole Foods and other corporations feature organic items Sales still represent a niche market Composed of many sub-structures and interactions Great deal more complicated than may first appear

Organic Vegetables : 

Organic Vegetables Organic is a distinct product characteristic Typically premium prices Certification of land takes 3 years, documentation, and consultant Niche served by CSAs, other direct mechanisms Community-supported agriculture or CSAs Consumers "subscribe" to a nearby farmer's fruit and vegetable harvests

Consumers Value Fresh Produce : 

Consumers Value Fresh Produce From a producer they trust and respect As much as a product with an organic label

CSAs = Marketing + Relationships : 

CSAs = Marketing + Relationships

Community Supported Agriculture : 

Community Supported Agriculture A viable alternative To the long-distance relationship most of us have with food we eat Farm-to-table clubs

What Is Community Supported Agriculture (CSA)? : 

What Is Community Supported Agriculture (CSA)? An innovative & resourceful strategy to connect local farmers with local consumers Develop a regional food supply & strong local economy Maintain a sense of community Encourage land stewardship Honor the knowledge & experience of growers & producers working with small to medium farms

CSA : 

CSA Is a unique model of local agriculture whose roots reach back 30 years to Japan Where a group of women concerned about the increase in food imports And the corresponding decrease in the farming population Initiated a direct growing & purchasing relationship between their group & local farms

Arrangement : 

Arrangement "teikei" in Japanese Translates to "putting the farmers' face on food“ Japan in the 1960's to find pesticide-free foods

Slide 25: 

Growing fresh produce using only environmentally-sound practices for families in and around Tuscaloosa, Alabama. To get better produce, you'll have to grow it yourself

Concept : 

Concept Traveled to Europe & was adapted to the U.S. Given the name "COMMUNITY SUPPORTED AGRICULTURE" at Indian line farm, Massachusetts, in 1985 Over 1000 CSA farms across the US & Canada At least five in Alabama

CSA : 

CSA Partnership of mutual commitment between a farm & a community of supporters Provides a direct link between the production & consumption of food Supporters cover a farm's yearly operating budget by purchasing a share of the season's harvest

CSA Members : 

CSA Members Make a commitment to support the farm throughout the season Assume the costs, risks & bounty of growing food along with the farmer or grower Members help pay for seeds, fertilizer, water, equipment maintenance, labor, etc

Farm Provides : 

Farm Provides To the best of its ability A healthy supply of seasonal fresh produce Throughout the growing season

Mutually Supportive Relationship : 

Mutually Supportive Relationship Between local farmers, growers & community members Helps create stable farm operation Members assured the highest quality produce Often at below retail prices Farmers & growers are guaranteed a reliable market for a diverse selection of crops

How Does CSA Work? : 

How Does CSA Work? Money, members & management A farmer or grower Often with the assistance of a core group Draws up a budget reflecting the production costs for the year Includes all salaries, distribution costs, investments for seeds & tools, land payments, machinery maintenance, etc

The Budget : 

The Budget Divided by the number of people for which the farm will provide Determines the cost of each share of the harvest

One share : 

One share Designed to provide the weekly vegetable needs for a family of four Some purchase fractional shares 1\2, 1\4 Seasonal or year-round Flowers, fruit, meat, honey, eggs & dairy products are also available through some CSA

Community Members : 

Community Members Sign up & purchase their shares Either in one lump sum before the seeds are sown in early spring Or in several installments through-out the growing season Production expenses are thereby guaranteed And the farmer or grower starts receiving income as soon as work begins

CSA members : 

CSA members Receive a bag of fresh, locally-grown produce Typically organic Once a week from late spring through early fall Summer and fall in northern climates And year-round in milder zones

Members : 

Members Prefer a wide variety of vegetables & herbs Which encourages integrated cropping & companion planting These practices help reduce risk factors And give multiple benefits to the soil

Crops Are Planted in Succession : 

Crops Are Planted in Succession To provide a continuous weekly supply of mixed vegetables As crops rotate throughout the season Weekly shares vary by size & types of produce Reflecting local growing seasons & conditions

CSA Vary Considerably : 

CSA Vary Considerably Based on farm or garden location, practices Specific farm & community goals & needs Memberships include a variety of community members Low-income families, homeless people, senior citizens, & differently-abled individuals Extra fee typically is charged for home delivery

Many : 

Many Try to expand to provide additional food items such as honey, fruit, meats, eggs, etc Networks of CSA have been forming to develop associative economies By growing & providing a greater range of products in a cooperative fashion

Some CSA : 

Some CSA Provide produce for local restaurants, roadside stands or farmers' markets While building farm membership Or in many cases, in addition to it

Some CSA : 

Some CSA Have members come to the farm & weigh out their own share Leave members behind any items they don't want at a surplus table And possibly find something there they could use

Some CSAs : 

Some CSAs Other farms have a distribution crew To weigh items & pack shares To be picked up my members at the farm Or at distribution points

A Core Group : 

A Core Group Farmers or growers, distributors & other key administrators, & several CSA members The decision-making body for CSA Determines short & long-range goals Prepares the budget Conducts publicity & outreach Organizes events, etc

Basic Means of Communication : 

Basic Means of Communication Between the farm & its members Annual meetings A member newsletter And occasional surveys

Why Is Community Supported Agriculture Important? : 

Why Is Community Supported Agriculture Important? CSA's direct marketing gives farmers & growers the fairest return on their products CSA keeps food dollars in the local community And contributes to the maintenance & establishment of regional food production CSA encourages communication & cooperation among farmers

CSA : 

CSA Creates opportunity for dialogue between farmers & consumers CSA creates a sense of social responsibility& stewardship of local land CSA puts "the farmers face on food" Increases understanding of how, where, & by whom our food is grown

Farmers and Club Members : 

Farmers and Club Members Say that the key to their dialogue is that Despite the fading of family farms Ever faster pace of urban life Endless choices of the convenience culture The land and things that spring from it still carry a mystique

Conclusion : 

Conclusion Market niches Marketing chains CSAs