Final Report for LNE99-127
During the past five years, Core Values Northeast (CVN) has worked with 58 farms, representing over 10,900 acres of agricultural land in New York and Pennsylvania and New England that has been certified for IPM production. Fifteen distributors and 36 retailers or locations have purchased CVN apples, including the Manhattan Public School System’s 160 schools.
To establish market support for local, sustainably grown apples
To create a certification program for apple growers using Integrated Pest Management (IPM)
To educate consumers about the benefits of choosing local sustainably grown products
Mother and Others’ intention in creating CVN was to test the efficacy of a regional eco-label to promote consumer awareness of the importance of buying local, sustainably produced products and to encourage farmers to use IPM methods. It was designed as a pilot that would eventually be run by an organization more directly involved in certification and marketing. The focus of activities as of June 2000 has been on finding a new institutional home for the program’s various components. Accomplishments have included:
Completing the evaluation of the program, which began during the summer of 1999;
Signing of a Memorandum of Understanding with IPM Institute of North America, which empowers the Institute to take charge of the certification and recertification process;
Forming an executive steering committee consisting of farmers, Mothers and Others board members, and a representative of the Institute to ensure the long-term continuation of the marketing component of the program;
Piloting the expansion of the program into pears and peaches.
Mothers and Others ceased operations in the spring of 2001.
During the past six months, Mothers and Others has been in active negotiations to ensure that CVN program is continued by other organizations. An MOU was recently signed with the IPM Institute of North America to undertake all work related to the farm certification process. The IPM Institute is a non-profit organization formed to facilitate recognition and rewards in the marketplace for goods and service providers who practice Integrated Pest Management. The organization supports the efforts to establish and expand eco-labels with an IPM component. It drafts IPM practice-based, region specific guidelines for certification programs in agriculture and grounds and facilities management.
Mothers and Others engaged in lengthy negotiation with Red Tomato about the marketing component of the program. However, given the current market environment where large northwest apple growers and distributors dominate the market, the marketing component proved too large and complex for any one distributor reasonably to accomplish. Therefore, a new executive steering committee was formed to ensure that long-term marketing will continue. The committee consists of two Mothers & Others board members, three CVN farmers (John Lyman III, from Lyman Farms and Jonathan Bishop from Bishop’s Orchard, and one other farmer to be recruited), and a representative from the IPM Institute. It has the mandate to create a comprehensive CVN marketing strategy to be introduced in the year 2002. For the year 2001, the participating farmers will use existing educational and marketing materials and their own marketing mechanisms.
Conversations are underway with two prospective new institutional homes for the program: A not-for-profit involved in regional eco-labeling, and a regional environmental organization. The new institution would be the coordinating home for the umbrella steering committee as well as the certification.
Piloting CVN into peaches and pears: Four farms out of 21 participated in the pilot project managed by Mothers and Others and Boston-based non-profit marketing partner, Red Tomato, to certify pears and peaches under the CVN label. The pilot to add other tree fruit was a positive step as it allowed farmers and distributors to market several different products with the CVN logo. It also extended the program’s visibility in the market by two months, as peaches appear in the market in July compared to apples, which are sold from August onwards. Labeling CVN peaches also builds on the consumer predisposition to buy local peaches while introducing them to the CVN program.
Red Tomato had projected to sell 2,000 cases of CVN peaches in 2000, compared to 900 cases of uncertified peaches in 1999. Excessive rains and other unfavorable weather conditions, however, made it a disappointing peach year, but a better year than expected for apples. With the addition of peaches and pears, CVN product sales rose from 1,400 cases of apples only in 1999, valued at $31,000, to 7,500 cases of peaches, pears and apples in 2000 valued at $164,800.
Red Tomato increased its efforts to market CVN certified products during the 2000 season. To increase demand for CVN products, Red Tomato also included a two-page IPM insert called “Integrated Pest Management: What You Need to Know to Make an Informed Choice About IPM and Your Food” in its marketing brochure. It conducted 32 in-store demonstrations and tastings. It also produced a series of color, laminated 11″ x 17″ apple and peach point of sale cards for use by trade buyers.
Other Mothers and Others distributors and retailer partners continued their marketing using CVN materials as part of their regular business operations.
Between the summer of 1999 and the winter of 2000, Mothers and Others conducted a survey of the critical stakeholders of the program. The Mothers and Others survey is one of the first evaluations of an eco-label program in the United States. Eight hundred surveys were mailed to farmers, distributors, retailers, collaborators, Mothers and Others members, and other consumers. The response rate for farmers was 33percent, or 74 out of 223 surveys sent. The response rate for distributors was 65percent—15 percent for retailers, 45 percent for consumers. and 55 percent for program support.
While most eco-label programs are created to take advantage of new opportunities, the goal of the CVN program was to support an industry in crisis. According to USDA census data between 1987-1997, 31 percent of orchards in the Northeast disappeared due to development, abandonment, or retirement. Therefore, the evaluation needs to be examined in the light of current challenges to the apple market. Specifically, those challenges are a produce distribution system that is based on the lowest cost option, which results in the decrease in local farmers market share and an increase in the market share of Washington, California and Michigan apples; increasing costs while prices decrease; and increasing land value, high population density and urbanization.
The survey, conducted during the winter of 1999-2000, validated many of our expectations, assumptions and concerns. First, the survey revealed that an effort to increase sales and prices was not the only reason for farmers to participate in the program. While access to new markets and expansion of existing markets were of course important considerations, supporting the growth of an eco-label, participating in a structured IPM program, and participating with Mothers and Others were also important considerations for between a third and half of the farms. Many farmers were interested in the program in order to make their practices more sustainable. In fact, eleven of the nineteen farms that were recertified in 2000 have been with the program for three or four years, even though most have not received significant price premiums for the eco-labeled produce nor reported an increase in sales. The connections and shared information between CVN farms, the learning process involved in creating a farm plan, and receiving credit for addressing food safety issues have frequently been reported as being benefits of participation in the program. The stringent recertification process coupled with the farmer to farmer learning opportunities has moved participating farms steadily toward more bio-intensive practices.
Second, the survey validated some of our concerns about the marketing component of the program. The competitive market environment is very tough for small family farms growing locally produced tree fruit. Keeping the market share and breaking into new markets in the current environment is extremely difficult for small farmers who cannot compete with prices offered by large distributors of the Northwest, Michigan, California and New Zealand apples. Therefore, maintaining distributor interest is a critical factor in the success of the program. Distributors feel, however, that participation in the program has not, as of yet, helped them to reach their financial goal of entering new markets. Therefore, it is critical that the program’s marketing component addresses distributor concerns as well as targeting consumers directly.
Third, general consumer education does not seem to be enough to create sufficient demand for the regional produce. The problem with general consumer awareness campaigns is that people who become interested in CVN products may not have access to them at their local markets, and that consumers whose local markets carry CVN apples may never have been exposed to the consumer awareness message. Educating consumers at the point of purchase is crucial in stimulating demand. The efficacy of tastings and other point-of-purchase education is reduced, however, by the brief time—often limited to a couple of seconds—that product demonstration staff have before the consumers decide to move on and continue their shopping. It is not surprising that while tastings have increased the sale of CVN products, they have not significantly increased consumer awareness of the benefits of IPM. As a result of the evaluation, CVN is in the process of redesigning the marketing strategy of the program.
CVN business plan, five-year performance review, and the “CVN Storybook.” A 50-year performance review looks at the history and program development of CVN and assesses its achievements and challenges. A draft business plan was created between the months of June and September. This plan describes the three key program components and gives an overview of eco-labeling in the region and the market environment for eco-labeled products. The plan describes CVN stakeholders, the program’s fee structure, and the organizational structure and explores future program models.
The business plan, as well as the five-year performance review, were used in negotiations with organizations with possible interest in taking on some program components. To assist with these negotiations and in planning future marketing efforts, we also compiled “The CVN Storybook,” which includes all program plans, certification results, acreage numbers, consumer education materials, and publicity placements. Together, these documents have been helpful in attracting new partners and will help them to implement the CVN program in the future.
Impacts of Results/Outcomes
While we still face some challenges in ensuring the continuation of the CVN program, it has been a dynamic year. We have secured a new home for the certification component of the program and have put in place a structure to revamp the programs marketing efforts.