Final Report for FNC98-239
Project Information
PROJECT BACKGROUND
Our farm is located in Bourbon County in southeast Kansas. Our farm is certified organic and is a diversified operation consisting of greenhouse vegetables, grain, hay a cow/calf and free range poultry operation. We own and operate a federally inspected multi-species processing plant in Uniontown, Kansas. We are members of the all natural beef cooperative. We market our farm products, along with 30 other farm families to a local supermarket chain in Kansas City. We have been certified organic since 1995.
PROJECT DESCRIPTION AND RESULTS
The goal of the project is to give small beef producers a competitive advantage by developing a customer driven market strategy for natural beef based on product “localness and customer environmental sensitivity”.
Process:
1) Improve customer’s environmentally value added concepts of natural beef.
a. Two methods were implemented to increase producer accountability and further develop the verification the all natural beef label claims. A producer workshop on ATTRA’s Beef Farm Sustainability Checklist was conducted on March 22, 2000. Bart Hall a former ATTRA employee and OCIA certification officer conducted the workshop. Participating producer completed the 8 page ATTRA Beef Farm Sustainability Checklist and rated their beef farm sustainability. The producers concluded the workshop to be very beneficial in developing the initial steps of all natural beef production accountability. The second method was the development of the Quality System Verification Program (QSVP) producer manual. The Producer QSVP manual is available upon request. The USDA QSVP is a more detailed program than initially anticipated at the time of submitting the SARE proposal. SARE funds were used to assist in the initial development of the producer QSVP manual. Additional funds were received from USDA SBIR to further develop the USDA QSVP for the all natural beef program. One of the most beneficial producer results of the QSVP was the development of the ‘Producer Passport’. The passport has also proven to be very timely in light of Country of Origin Labeling (COOL) legislation.
2) Identify customers and track their satisfaction.
a. Due to the rapidly changing technology, several changes were made in how we approached this process. We evolved from the kiosk to working directly with the supermarket data bases. The web site (www.goodnatured.net) was updated and linked to Hen House Market’s web page. Several approaches were used to identify customers, track their satisfaction, and reward their support. One method was the use of a coupon on the customer’s receipt. For example, upon purchasing GNFF all natural beef roast, the customer would receive a coupon on the back of their receipt for a dollar off 2 lbs. or more of all natural ground beef. Another method was using the customers Hen House Rewards Card. For example, every time you use your Hen House rewards card you are registered to win a GNFF all natural beef grill pack. We also tried sale advertisements of GNFF all natural beef in weekly store flyers. The result was a 33% increase in GNFF all natural beef sales.
3) Use positive reinforcement to recognize and reward repeat customers.
a. The development of the newsletter initially was considered to be the least difficult objective to accomplish. However, accomplishing this task turned out to be the most challenging. Several obstacles had to be overcome in order to distribute the newsletter in the supermarket. The articles within the newsletter had to be informative about sustainable agriculture but simultaneously not demeaning to the conventional agriculture food system. The layout and each article had to be approved by the supermarket chain. In addition, photos accompanying each article were crucial to make the newsletter more reader friendly. Finally, distribution of the newsletter through the mail using the supermarket data base had numerous hurdles. The newsletter was distributed by mail to 10,000 identified GNFF customers. The newsletter is available on the GNFF web site and linked form the supermarket web site. The newsletter has been very well received and it is anticipated that the following issues will be less cumbersome as many of the technicalities have been worked out.
Note: all consumer data base information is confidential to the supermarket and at no time did we have access to any of the information. All materials were supplied to the supermarket for distribution.
4) Employ strategies to empower meat managers to promote natural beef.
a. A farm tour was conducted on October 4, 2001. A notebook ‘Ball’s Food Stores Farm Tour’ was prepared for each of the meat managers. Fifteen meat managers and seven corporate office support staff attended the farm tour. The tour included stops at three producer’s farm, a tour of a couple of watersheds, conservation practices, and a home grown lunch courtesy of the producer’s wives and daughters with a luncheon guest speaker. The farm tour was definitely a benefit to both the producers and the meat managers. This has become an annual event.
The producers participated in at least two in store promotions. Mid America Promotions prepared the all natural beef samples in the store and the producers handed out information about the product, recipes, and talked to customers about their farm operation. Producer involvement with in store product sampling is a very effective method of product promotion. However, due to food safety regulations an approved promotional company is required to prepare the samples. This greatly increases the cost.
People:
Many relationships developed as this project evolved. Kansas State University Department of Agriculture Economics Dr. Michael Boland provided assistance with the development of the quality control manual. The farm tour had numerous individuals helping including the following; David Key – Nemaha County Extension Agent, Terry Newell – USDA NRCS, Lori Oleen – K State Extension Assistant, Ron Wilson – Huck Boyd National Institute for Rural Development K-State, and the supermarket corporate support staff. In addition the all natural beef cooperative has grown to include 27 producer members.
Results:
We expanded to 19 supermarket stores. We increased sales to 24 head of beef per week. We identified approximately 18,000 customers who purchase GNFF products. This increase is definitely a result of achieving our initial goal of developing a consumer driven market system.
In 2002 the average price of conventional beef was $1.07 and the average price for the all natural beef co-op members was $1.27 or a $150 premium per head.
The results were greater than initially anticipated. In future proposals, I would narrow the focus of the project to just one task rather than four tasks. This would allow for a more appropriate budget and a timelier project completion and reporting.
Discussion:
The main two things I learned from the grant are: 1) The supermarket is an integral part of the success of a natural beef program. Since beef often can not be sold at farmers markets or must be sold frozen the supermarket is an essential part of the program. In addition it provides a year round market. Supermarket data base technology provides the means by which producer groups can connect with their customers. 2) There are numerous barriers in selling to a supermarket. The greatest obstacle is understanding their needs, their infrastructure, and how to work together to build a program where both the producer and retailer benefits. This is no small task. However, I think this project is an example of how this can be successfully achieved.
The advantage is providing a profitable market alternative to small family farms. The supermarket provides a year round market with sufficient volume. The disadvantage is the cost to market your product and advertise and the competitiveness of the supermarket industry.
Look at a supermarket as an opportunity to build a year round farmers market with in their structure. Become knowledgeable of box beef requirements and become informed n the latest technology on supermarket data mining.
OUTREACH
Due to the high visibility of this project and that the project had a marketing emphasis, excellent outreach was achieved. The GNFF all natural beef program was highlighted in The New American Farmer, 2001 (pp 20-22), Small Farm Today, 1999 (pp 63-65), Kansas Farmer, 2001 (pp 12017), The High Plains Journal, 2002 (pp 1-2B), Kansas City Star, 2000 (FYI Sunday), and numerous others. Most notable is presentations about the project at the Kerr Center’s Supermarket of Ideas November, 2002 and the USDA Agriculture Outlook Forum February, 2003.