Marketing Sustainable and/or Organic Products in Small Metro Areas

Increase memberships in community supported farms (CSAs).

After submission of the SARE grant proposal in early 1998, both CSA producers involved in this project saw their fields suffer from terrible weather in the summer of 1998. Knowing that recruiting in 1999 would be difficult, they aimed to maintain membership levels. What CSA producers tried were innovations in membership options. Ten members of one farm tried the "shopping share," which gave them the flexibility to come and shop for their produce whenever they could fit it into their busy schedules. The CSA serving Fargo-Moorhead found it increasingly difficult to recruit members by going door to door, and found that radio advertising was even less effective. The ineffectiveness of traditional advertising reinforces the importance of word of mouth promotion in the growth of CSAs, suggesting that recruitment of friends and acquaintances of existing members is more effective. The three members interviewed for this final report are all faculty members at local universities. Perhaps their level of education validates the appeal organic foods have to a more knowledgeable population and future marketing efforts could be more focused on educators. Here are comments from some of the members of the Moorhead, MN CSA:

"It was great, especially in the middle of the project," said a Fargo woman. She said she had a feeling of being a part of the agriculture community with people interested in the environment and the foods they ate. "You got the intrinsic feeling you were doing something good connected to agriculture." She likes organic because it is friendly to the earth and she knows where it came from and what farming practices were used.

A Moorhead man said, "He was excited about the CSA because it allowed him to be connected with what he ate and to take a risk along with the grower. He found the farmer to be very knowledgeable, well read, and diligent about his use of organic methods. The farmer also seemed to have a commitment to the community and was also a good conversationalist. He was very principled in his approach."

Another Moorhead man said, "The first two years of the CSA were really good, after that it appeared the grower was coasting to the finish line." The farm stand was on the honor system the last year, and that was a problem. People appeared to be taking from one another's food supply.

Increase sales at roadside stands and farmers markets.

Despite the risk of starting a new farmers market, three compelling reasons encouraged the group to do so. First, access. The existing Fargo-Moorhead farmers market excludes any new members. Secondly, six of the local organic growers were not, or have not yet been certified, so they could not sell to grocery stores as organic. And thirdly, we knew we could not sell all of our produce through existing CSAs or road side stands. The original location, at a city park, was denied three weeks before it was scheduled to open. So contact was made with churches and businesses, which unlike governments, could quickly make a decision. The decision was made to work with one church that enthusiastically allowed the growers to set up their market in their parking lot, which was located on a busy residential street in an affluent residential area. A formal agreement was drafted with the church, advertisements were placed in the local newspaper and on public radio, and a brightly colored sign was set up next to the market. The market started successfully and continued throughout the summer and fall. There was no cost to growers because the church believed it would benefit by increasing its own membership by providing this community service. Here are some comments from vendors at the farmers' market:

"I thought the project went well in the summer of 1999," said a Fargo woman. She enjoyed everyone except one grower who was told not to return. "That guy came on too strong, yelling at people as soon as they got out of their parked vehicles, yelling at them to come over to his particular stand. It is important to have a friendly, but calm, laid back atmosphere." She made money selling specialty spreads and breads, but she doesn't know how much. Although she wishes the farmers market continued in Fargo, she realized the growers didn't want to come back and the public expected more vendors and more variety.

A farm couple said they grew frustrated with the standards set at the farmers' market, i.e., magazine perfect looking produce. They prefer to sell at another local farmers market where it doesn't have to look perfect and you don't have to sell it yourself. They described themselves as introverts who found it hard to sell their own produce. They appreciated the times Larson sold for them. They have scaled back their farming operation because of low prices and now make most of their living in another occupation.

A Fargo vendor said she liked the organic marketing project at the farmers' market because she enjoyed the people and repeat business. She doesn't know how much money she made but appreciated the chance to get her name and product out to the public.

Increase sales of certified organic products at retail outlets.

Doubtful that small sales to small natural food stores would be profitable, the decision was made to only sell to larger grocery stores in Fargo-Moorhead. Since the project leader, Ben Larson, was unsure of the interest store level produce mangers would have in buying certified organic produce, he wanted to give them one option, to say "yes." Consequently, he went straight to their boss (either the regional produce manager or the manager of several stores), hoping they would think selling "upscale" organic produce was an opportunity, rather than a risk. In preparing his sales pitch, Larson consulted the Organic Alliance in St. Paul, MN., a non profit marketing group that has successfully promoted organics to retailers. (Organic Alliance also helped the project leader plan the local group's outreach and media campaign.)

The sales technique focused on the recent growth of organics in the Twin Cities and ways the Fargo-Moorhead growers could help the produce managers. Larson designed an attractive looking letterhead and business cards with the name of the growers' group, Red River Organic Growers (appendix). These preparations prior to the initial sales calls worked. Of the three grocery store chains in Fargo-Moorhead, two agreed to start marketing locally grown organic produce. (The one chain that declined did so in part because its ordering is centralized through its Minneapolis area office.) The managers committed to work with certified growers (they did not want to sell any noncertified "chemical free" produce). Once they'd committed to trying organics, the managers set up meetings with their store level produce managers and the project leader to discuss the issues involved in buying and selling local organics.

The produce managers had many issues, and it was crucial to take their concerns seriously. They needed to know that the farmers would listen to their concerns; they seemed to like having an honest broker that would relay their concerns to the growers. Chief among their concerns was produce quality, appearance, and price. They said they only wanted good looking produce priced at not more than 20% above conventional prices. However, given an exceptional product, they would accept a higher price. For instance, the produce managers raved about the organic carrots one local grower sold to them years ago, which were so sweet and delicious that consumers loved them even though they looked the same as the competition and were considerably more expensive than conventional carrots. Also, one organic producer delivered exceptional melons in 1999 and the managers wanted more and more of them. It was clear that the produce managers' sense of quality can be expanded to include taste and freshness (i.e., locallygrown) if they are provided with exceptional products. But produce managers do not share many of their consumers' ecological concerns.

The other major concern the produce managers had was receiving too many calls each week from growers. One of the regional produce managers suggested the project leader coordinate with the local growers and send the produce managers a fax once a week listing the available produce and prices. This approach worked well for both growers and grocers. The growers were able to just make one call to Larson, and likewise, the grocers received only one call from the project leader. The produce managers also seemed to appreciate telling Larson about problems with produce rather than telling the grower himself. Once the growers had product in the stores, they provided the grocers with attractive point of sale promotional materials produced by Organic Alliance.

Here are some comments regarding the project from produce managers from the two chains in the Fargo area:

A northside grocer thought the project went well in the summer of 1999 and he appreciated Larson's efforts to coordinate the growers. He explained, he doesn't want ten growers calling him. He'd like to see it set up as a cooperative in the future with coordination provided for all involved.

Another Fargo grocer said he doesn't deal with organic produce. He only sells Dole's organic salads shipped in from California. He said his small store doesn't attract organic shoppers.

A southside grocer got more involved in the project and attributes some of the success to his clients who are more educated and affluent than other Fargo residents. He said he likes the grower to call him at least a week prior to when his produce is ready and make a deal. Unlike some grocers, he doesn't mind a number or growers calling him directly but he doesn't want "a hundred of them calling." It is difficult for the check out clerks to identify the more expensive organic produce from the conventional produce. UPC stickers are needed, he said, and he's willing to put them on if provided with them. Since the local organic supply wasn't sufficient, he deals with a California company but would like to support farmers in the area, consequently he is considering a southern Minnesota organic company.

A westside grocer in Fargo said the organic project "didn't really do anything." He doesn't have a whole lot of people looking for organic produce because his store is located near numerous apartment buildings housing either young or elderly people who look for bargains when they shop. He also said it was difficult to deal with organic farmers at times because they were not consistent. "They appear to be very, very independent." Quality was also an issue, "The shoppers are picky and too often the farmer was inflexible, delivering product that had been sitting too long and had defects." Despite the shortcomings he said he is willing to try the project again and he still has the organic produce signage that he thought was well done, as well as the literature provided by this project.

A produce manager from another Fargo chain said he would definitely like to see a steady, local supply of organic produce but it just isn't there. Currently he buys from a Minnesota wholesaler who ships in organic produce from California. Potatoes are the only organic item he receives from a local grower. He has seen a growing interest on the part of shoppers for organic items. He also mentioned the problem check-out clerks have identifying organic items and pricing them accordingly. Despite his support of organic food, he was concerned about the growers' lack of reliability. It isn't just the local farmers at fault, he said, a large California organic company also keeps his trucks waiting for hours at a time, time they can't waste so at times they have to go to their next stop and eventually return to North Dakota without organic produce.

Two organic growers gave their perspective of the linkage this project provided them with grocers:

A Minnesota potato grower appreciated Larson's coordination of the orders as he took the role of a middleman between the grocery stores and grocers. He learned the hard way that people want good looking produce if they are going to pay premium prices. Consequently, when his older, malformed potatoes didn't sell, he removed the organic sign and sold them as just "potatoes" for less. He sells a lot of his produce in Chicago and Minneapolis but is frustrated with trying to find transportation.

A North Dakota grower was disappointed that his organic melons didn't sell for a higher price in Fargo. He supplies stores elsewhere in the state and receives a much higher price (as high as 59 cents a lb. compared to a low of 30 cents a lb. in Fargo). He'd also like to sell three times the volume as he did in Fargo the summer of 1999, but he realizes cheaper, conventionally grown melons are beating out his produce at the store.