Promoting Sustainable - Locally Grown Farm Products: Creating a Model Partnership to Increase Farmer Access to New Market Opportunities

Final Report for LNE00-134

Project Type: Research and Education
Funds awarded in 2000: $159,253.00
Projected End Date: 12/31/2003
Matching Federal Funds: $87,344.00
Matching Non-Federal Funds: $132,369.00
Region: Northeast
State: Pennsylvania
Project Leader:
Donna Pitz
The Food Trust
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Project Information

Summary:

The goal of this initiative was to develop a model to increase the sales and demand for sustainable and locally grown farm products in urban communities throughout the Delaware Valley Region. The project created a low overhead information and delivery system for sustainable and locally grown farm products that connects small farmers and end users in the densely populated mid-Atlantic corridor. Project partners included farmers from within a one hundred mile radius of
Philadelphia in Delaware, Maryland, New Jersey and Pennsylvania interested in marketing their products in Philadelphia and the region; other agricultural professionals; wholesale, retail and institutional buyers; farmers’ market development organizations; and others.

The project objectives were to: increase the number of local farmers penetrating the Philadelphia market; strengthen delivery systems between farmers and buyers, including consumers, institutions, and chefs in the Delaware Valley region; identify at least three major new outlets for local and sustainably grown farm products in Philadelphia; create a database of farmers and buyers that could be disseminated via telephone, meetings, printed material and the internet; and increase Philadelphia consumer access to locally grown sustainably produced foods. The overall approach of the project was to develop a sustainable low cost mechanism to provide information to farmers about potential markets, make contacts with institutions and brokers about available local and sustainably grown produce, assist farmers as appropriate to make sales, and, assess the extent to which this approach was successful.

Introduction:

This initiative was designed to assist the many small- and medium-scale growers in the Delaware Valley who face significant hurdles to marketing their products in Philadelphia. The challenges result from major infrastructure changes in the region's agriculture, such as the consolidation of
the food industry and loss of farmland.

The goal of this project was to develop a model to increase sales and demand for sustainably and locally grown farm products in urban communities in the Delaware Valley region. The project brokered local produce to a food cooperative that serves Philadelphia and its environs; connected farmers and a major supermarket chain that sold local produce in 24 area stores; expanded farmers'
markets in Philadelphia, and linked growers with bakeries, CSAs, corner grocery stores, and other buyers. By 2003, more than $1.6 million dollars in sales had been generated by the project, and work with the food cooperative and the supermarket was continuing. In the process, Delaware
Valley residents - including lower income residents - gained increased awareness of and access to locally grown foods. This was the result of a stream of newspaper articles, farmers' market advertising flyers, a social marketing campaign, and other project initiatives. A model for increasing access of farmers to major metropolitan markets was created.

Achieving these outcomes required coordination among multiple individuals and agencies from Pennsylvania, New Jersey, Maryland, and Delaware, each of which brought unique expertise and resources to the project. These included Cooperative Extension, Eastern Lancaster County
School District Adult Farmer Educator, state departments of agriculture, as well as other agricultural professionals, farmers' market development organizations, and nongovernmental organizations interested in sustaining agriculture in the region and increasing access of Philadelphia residents to local foods. And of course, it involved the participation of growers, who farm within a one hundred mile radius of Philadelphia, in Delaware, Maryland, New Jersey, and Pennsylvania.

Project Objectives:
  • Increase the number of local farmers penetrating the Philadelphia market.

    Strengthen delivery systems between farmers and buyers, including consumers, institutions and chefs in the Delaware Valley region.

    Identify at least three major new outlets for local and sustainably grown farm products in
    Philadelphia.

    Create a database of farmers and buyers that can be disseminated via telephone, meetings, printed material and the Internet.

    Increase Philadelphia consumer access to locally grown sustainably produced foods.

Cooperators

Click linked name(s) to expand
  • John Berry
  • Paul Hauser
  • Bruce Mertz
  • Elvin Padilla
  • Ted Patterson
  • Torrey Reade
  • Leon Ressler
  • Michael Rozyne
  • Sandy Sherman
  • David Specca
  • Jeff Stoltzfus
  • Julie Swarts
  • Patrick Temple-West
  • Maria van Hekken

Research

Materials and methods:

The overall approach was to identify farmers to work with, identify and develop local markets for local product, then function as a "match maker" between buyers and sellers. This involved supporting growers, finding and negotiating contracts with buyers, and building public awareness of, and access to, locally grown produce. Coordinating these initiatives was the project's Project Manager, functioning as a "match maker" between producer and buyer. Her many roles included catalyst, facilitator, information manager, public relations specialist, and more.

The project began by identifying farmers through multiple sources, including Cooperative Extension, Pennsylvania Association for Sustainable Agriculture (PASA), agricultural educators, and others. At the same time, the project investigated markets, focusing initially on institutional
markets and retail markets, both large and small.

Once a list of potential buyers and sellers was created, the project assumed the role of "marriage broker," making the contacts to make the sale. This involved the following.

Demonstrating the value of buying local. Each potential customer had to be convinced that
buying local farm products would help them. Each sale had to be approached strategically,
finding the best approach to interest the potential buyer in local farm products.

Matching farm product with buyer's demand. The Project Manager worked with the potential buyer to find farmers' products that met the
buyer's demand in terms of volume, packing and labeling requirements, and delivery schedules. Scale was an important factor here. For example, a small scale grower might use casually graded produce for his own stand but needed to grade by higher standards to sell to a restaurant, supermarket, or other market. Or a large scale grower with his/her own packing house was unlikely to deliver produce to a restaurant because the quantities were simply too small to make
it profitable.

Negotiating the price. The Project Manager worked as an advocate for the farmer to negotiate a price that was at or above the going rate. This often involved reminding the buyer of the important differences in quality and freshness found in local farm products.

Troubleshooting. When problems arose, it was the Project Manager's role to solve them. For example, a supermarket required that all deliveries had to be made before 11 a.m. When this was a problem for the farmer, the Project Manager negotiated a later delivery time. An intermediary can sometimes be more successful ironing out difficulties between farmers and buyers.

Using this approach, the project was able to build relationships with both farmers and buyers that were critical to penetrating new markets and ensuring adequate product for the markets.

Research results and discussion:
Milestones

The Project Manager was employed as planned, collaborating with a Steering Committee (see cover page Team Members) which provided guidance on project implementation.

Established Partnerships for Project Implementation. In order to build a network of farmers, the project's Project Manager worked with Cooperative Extension agents, agriculture educators at area colleges or school systems, and representatives of farmer associations. Steering Committee members initially provided excellent contacts among farmers. For the project component involving the food cooperative, the primary farmer liaison was an agriculture educator who worked with farmers in Lancaster County. He introduced us to farmers, provided information on commodity production, vouched for our legitimacy, and helped find solutions when problems arose. He was an essential partner in this endeavor.

The project worked with Pennsylvania growers primarily, and some New Jersey and Delaware farmers. Although contacts were made with farmers in Maryland, over time it became clear that distance to Philadelphia was a major obstacle for many of them. On one project component, introducing locally grown fruits and vegetables to a food cooperative, the Project Manager worked
largely with Lancaster County growers, including Plain Sect and "English" farmers. Plain Sect farmers had until recently generated significant cash from tobacco production. With the loss of these tobacco contracts, many were moving into fruits and vegetables, seeking new marketing options.

Created an Information Management System. The project set up an information management system that provided immediate access to data on farmers, their products and potential markets. The system had three components: (1) a farmer database that tracked farmer contact information, farm
acreage, county, crops, growing practices (organic, transitional, IPM, conventional), where they currently sell, sales volume details, packing and grading information, and delivery means (truck size, refrigerated or not, etc.); (2) a potential buyer database that tracked business name, contact, title, address, current product sources, new products that they might be interested in purchasing, favored production/growing practices (organic, conventional, etc.), packing and grading requirements, delivery details (time constraints, do they allow individual farmers to deliver, etc.), insurance needs,
and vendor registration requirements; and (3) an activity log with a record of identified buyers, dates products were needed, status of discussions, and terms of any contracts.

The information was disseminated in multiple ways including through telephone conversations, printed materials, and the Internet. A comprehensive resource notebook was created containing information on websites, farm products, potential markets, and more.

Identified Markets for Development. While the project proposal called for the identification of and sales to three regional institutional markets, by the end of the project, agreements had been facilitated between an area broker and 24 stores within a supermarket chain, numerous sales had been consummated between individual farmers and small grocery stores, a variety of small farmers' markets had been expanded into new communities in Philadelphia, and a new monthly "Farm Fresh Package" had been established in partnership with a food cooperative (SHARE), that provides food at discounted prices to hundreds of urban and suburban customers, some of whom are lower income.

The Project Manager chose a wider range of potential market segments, including educational institutions, the Pennsylvania Convention Center, cooperatives, faith-based and community development organizations providing food to members and/or low income
neighborhoods, educational, health, retirement and other institutions, farmers' markets, wholesale and distribution firms, and community supported agriculture organizations (CSA's). The project
did not focus on restaurants since other nonprofit organizations were already working specifically to increase use of local farm products at restaurants.

Working with a wide range of market segments had several advantages. It enabled local farmers to penetrate multiple venues, including institutions, restaurants, supermarkets, CSA's, etc. It also widened the range of farmers (including smaller scale growers) involved and crops marketed because products could be procured in both small and large volumes. Further, working with multiple farmers increased transportation options available, e.g. if one farmer dropped off a small quantity of product to a restaurant, his/her truck might be available to carry other farmers' goods as well. Finally, the diversified base of farmers limited the impact if a contract was lost.

Working with multiple market segments took more time, however, because small contracts would take as much time as larger ones. It also required more information management. Further, it was less likely to achieve the same volume as when farmers are selling through a supermarket or to a large institution.

Contracts Between Broker and Supermarket Chain.
From an initial meeting convened by the Project Manager with a regional supermarket chain, five farmers and a small produce
brokering firm, an ongoing relationship was established at 24 stores resulting in sales over $250,000 during the 2003 growing season. The Project Manager established the contact and provided information showing how the supermarket's bottom line could be improved by buying local produce, how the promotion of local foods could strengthen their chain's competitive position,
and how to highlight locally grown foods in promotions to increase sales. The contact was successful, and over time, a local produce broker obtained a contract to provide five stores with specific commodities. When the supermarket chain was sold to another chain which had a different
policy for buying local produce, the Project Manager worked with supermarket staff to successfully expand the contract.

Sales Between Individual Farmers and Smaller Markets.
The Project Manager also functioned as a
broker between farmers and a bakery, "mom and pop" grocery stores, and three CSA's. In one case, the Project Manager assisted a small broker who supplemented his own sales to restaurants with that of his neighbor farmers for a small fee.

Farmers' Markets.
The Project Manager helped to establish eight new farmer's markets, involving 26 new farmers. This expansion of farmers' markets occurred in conjunction with another
complementary SARE project, providing additional staff resources.

Farm Fresh Package.
In partnership with SHARE (Self Help and Resource Exchange), a new initiative was established, incorporating local vegetables and fruits into monthly food packages sold
at discounted prices to residents of eastern Pennsylvania, Delaware, New Jersey, and the eastern shore of Maryland. Called the "Farm Fresh" package, it is available during the growing season from June to November.

SHARE is a nonprofit organization that buys food in volume, and requires members to volunteer two hours of community service each month. In exchange, members can buy food at a discounted price. Members do not need to meet income or other eligibility guidelines for participation. Foods available through SHARE cooperative include staples (canned goods, beans, rice and/or other dried
goods); several meat, poultry and seafood items fresh or frozen (such as a roasting chicken, hamburger); eggs, and fruits and vegetables. SHARE's program is promoted through churches, community centers, tenant associations and other community-based organizations, which operate as host sites, take orders and handle distribution to customers.

The Farm Fresh package consists of locally grown fruits and vegetables. SHARE provides
transportation to farms, where product is collected and taken to the SHARE warehouse. There it is sorted into packages by SHARE members and other volunteers for delivery to customers. The Food Trust receives a fee for ordering the produce sold in the Farm Fresh package. The fee is paid per package purchased and represents approximately 10-20% of the cost of the package, depending
on the size.

To set up the program, The Food Trust worked with SHARE and members of host sites to prepare a list of fruits and vegetables to offer in the package, then identified farmers to supply the products. Whenever possible, produce was purchased from sustainable growers. Cooperative Extension and an Agriculture Educator from Lancaster County, who served as the liaison to the farmers, provided assistance in locating farmers.

The Project Manager devoted approximately 20 hours per month for nine months in the first year to develop the Farm Fresh program. Now established, the program requires approximately two days of staff time per month for broker services, which is covered by fees from sales of packages. (Fees did not cover all staff time during program start up.)

Sales of the Farm Fresh package have grown each year. In 2003, an estimated 1,100 Farm Fresh packages were sold, an increase of about 10% over 2002. Farmers gave the program high marks in evaluation interviews, because the Farm Fresh package has given them access to a new market and operates very smoothly. In addition, a strong partnership among SHARE, The Food Trust, and farmers and other agricultural professionals has been created.

Building Supply Network.
The Project Manager built a network of over 100 farmers who are interested and able to supply product for urban markets. Letters were sent to a list of growers using member directories supplied by Pennsylvania Vegetable Marketing and Research Program and the Pennsylvania Association for Sustainable Agriculture (PASA) to announce this marketing opportunity. In addition, farm contacts were gathered through the Agriculture Educator from Lancaster County and many of the same aforementioned organizations: Cooperative Extension,
state departments of agriculture, producer associations including sustainable/organic agriculture organizations, commodity associations, farm shows, farm publications such as Lancaster Farming, and farmers' market organizations.

Organizing Transport and other Intermediary Services.
Transportation turned out to be
one of the thorniest problems in the project. For farmers selling small volumes with only a pickup truck and no refrigerated storage, access to transport is a critical issue. The Project Manager addressed the issue by facilitating connections between farmers with transport and those without, by piggybacking on existing farmer transport routes and taking advantage of opportunities for backhauling.

Increasing Consumer Awareness of Local Foods.
A social marketing campaign designed to
increase public awareness of local foods, location and times of farmers' markets, and importance of eating fresh fruits and vegetables was carried out during the project. This campaign was designed
to have short-term effects such as building the customer base for the markets and long-term effects such as building public awareness of the health, land use, and economic importance of local food.

The social marketing campaign included newspaper articles and other print media publicity activities
(see below 8. Publications/Outreach ) supplemented by tee shirts and shopping bags, and refrigerator magnets with local food graphics and phrases, as well as nutrition education and food samplings.

A focus group was conducted to determine the most effective slogan for promoting locally grown foods. These groups indicated the most successful slogan would be, "There's no place like home...grown." This was incorporated in multiple activities to
encourage the public to "buy local." (See Appendix 3. Focus Group Results)

During the period of the social marketing campaign, sales increased at the farmers' markets. Customer surveys conducted at farmers' markets during the campaign showed increased consumer
awareness of locally grown foods.

Participation Summary

Education

Educational approach:

Earlier sections of this report have described the social marketing campaign and promotional activities for the SHARE Farm Fresh package. The project also instituted a media campaign to build public awareness of the importance of buying local foods and farmers' markets, primarily in the summer of 2003. Project staff worked with a consulting public relations professional, who
coordinated the following media events:

Radio interview with Duane Perry, Executive Director of The Food Trust, on COMCAST Cable Television Network show "Newsmakers", which aired during week of July 7, 2003.

Mayoral proclamation declaring July 24, 2003 "Homegrown Food Day" in Philadelphia.

Inclusion of nine articles in eight area newspapers on fresh-picked produce and farmers' markets in Philadelphia, including The Philadelphia Inquirer, Camden Courier-Post, Philadelphia Daily News, Three Star weekly newspaper, Port Richmond Star weekly newspaper, Olney Times weekly
newspaper, Fishtown Star weekly newspaper, and The Phoenix.

Weekly calendar listings throughout the market season in The Philadelphia Inquirer and neighborhood papers.

Inclusion in article in the July 2003 Philadelphia Magazine Farm Stands.

No milestones

Project Outcomes

Impacts of Results/Outcomes

The project resulted in improved markets for local farmers, for both the short and long term.

Sales of locally produced foods through project-generated sales contracts with supermarkets, a Farm Fresh package with SHARE, an expanded network of farmers' markets, and other markets totaled more than $1 million, annually.

More than 45 farmers have new or increased sales to Philadelphia area markets through project-facilitated contacts. An additional growers (8) supply the two local produce brokers assisted by the project.

The markets created and established through this project will not disappear with the completion of the project. All are expected to continue in 2004 and beyond. This sustainability results at least in part because of the careful attention to relationship building between and among the Project Manager, farmers, buyers, and brokers. The importance of relationships in the produce marketing
process -- and the success of this project in building good relationships -- was a consistent refrain in end-of- project evaluation interviews.

Working with a food cooperative provides a
consistent, dependable buyer. Farmers selling to SHARE who were interviewed in the end-of-project evaluation were all very pleased with the results of their participation and wanted the relationship to continue. They found it a valuable new market that increased the diversity of their market options and thus reduced their risk.

Philadelphia residents' access to locally grown fruits and vegetables increased significantly.

Farmers' markets in new urban locations, the Farm Fresh package and SHARE brought fresh produce into the city. These initiatives connected producers with end users. The sales to a supermarket chain resulted in a considerable increase in availability of local foods in 24 supermarket stores

Knowledge and awareness about the availability and benefits of sustainably and locally grown foods among regional residents was increased.

Literally hundreds of thousands of people saw and/or heard promotions for locally grown fruits and vegetables. Promotion activities included multiple articles in both city-wide and neighborhood newspapers on the benefits of locally grown fruits and vegetables; a very visible social marketing campaign; informational materials in thousands of SHARE Farm Fresh packages; a buy local
campaign, and other outreach activities that told the story of local agriculture and why it is
important. A series of farmer's market surveys conducted by The Food Trust staff indicate that
customers are both aware of and appreciate improved access to local produce.

Increased knowledge of the production, distribution, and marketing system in the Delaware Valley among project participants, particularly the Project Manager and those who worked with her. All continue to use this information to sustain the project activities informally through referrals and contacts.

Solid partnerships among farmers, The Food Trust, the Agriculture Educator, Cooperative
Extension, SHARE, and many other organizations continue to collaborate to increase the profitability of regional farmers. The relationships grew as the project unfolded; partners continue to serve as resources to each other and collaborate on projects. For instance, several individuals
among Delaware's Department of Agriculture became involved in the annual Future of Our Food and Farms Summit because of their participation.

Economic Analysis

Sales significantly increased at the farmers' markets, with total revenues exceeding $1 million; $6.66 of sales were generated for every grant dollar.

Also, almost $400,000 of sales were created at supermarkets, restaurants, CSA's and other markets; $2.45 of sales were generated for every grant dollar.

In addition, the Farm Fresh package sales totaled close to $40,000. This initiative will continue beyond the grant, since the fees cover the cost. There is great potential to increase Farm Fresh package sales, since only 25% of SHARE customers currently purchase it.

Farmer Adoption

This project focused on increasing marketing opportunities rather than production technologies. New technologies were required in labeling and packaging to secure some sales. For example, many stores now require product location unit (PLU) stickers on all items. This can be labor intensive, and not all farms chose to or were able to comply.

Areas needing additional study

Future Research Needed

From project implementation and evaluation, several areas for future study were identified.

Strategies to increase purchase of fresh fruits and vegetables. While fruit and vegetable
consumption is increasing, consumption levels among some groups remain too low.

Strategies to encourage more small scale broker and transport operations. Transportation and brokering to urban markets is a challenge for smaller growers. Finding ways to address this constraint requires further study, including investigation of economic development or business
incubator programs that might be support such services.

Strategies to address price fluctuations in contract growing. Several farmers interviewed noted the dilemma they face in contract growing. On the one hand, they have a guaranteed buyer; on the other hand, if the market price has increased significantly by the time the order is delivered, the grower locked into a fixed price can forfeit a substantial income. Developing win/win strategies -
that is strategies that work for both grower and buyer could help farm profitability

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.