Progress report for LS21-361
Project Information
The overall aim of this study is to provide research-based information to small organic producers and local nonprofit organizations supporting local production. Specific objectives include to: 1) provide insight on how to increase long-term profitability and customer retention; 2) make available strategies for utilizing the most efficient co-labeling and advertising tactics that build on sustainable values; 3) provide additional information to policy makers and academic professionals on how labeling programs and advertising/communication strategies effect consumer perceptions about farming practices and purchasing decisions.
Over the past 20 years, producers have been innovating in their direct marketing operations (such as farmers’ market, Community Supported Agriculture, and food trucks) drawing on social and environmental values (Low et al., 2015; Woods et al., 2017). Whether promoting local family farms or supporting food security, producers have been adapting to new consumers preferences and community needs. Utilizing mission statements, farm branding, labeling strategies and other lines of communication, small family farms have been successful at building long-term relationship with their communities.
This project proposes to focus on small organic fruit and vegetable producers in Georgia and will assess the relative economic values of co-labeling using several alternatives such as: USDA Certified Organic, Certified Naturally Grown, Georgia Grown, locally grown (with specific derivatives like, Northeast Georgia Grown, Augusta Locally Grown or Athens locally Grown), GMO-free and pesticide-free. This study will evaluate consumers’ intention to purchase and willingness to pay for various combination of labels and different direct marketing channels operations such as farmers markets, CSAs and online. Additional content that farmers use to communicate on their farming practices and sustainable values will also be used to assess consumers’ perception and preferences. This study’s geographical coverage will extend throughout Georgia and contiguous states such as Florida, Alabama, South Carolina, and Tennessee, in order to provide additional empirical support on the marketing effectiveness of the different co-labeling and communication strategies beyond the state’s borders.
On the producers’ side, a net economic valuation (Profit and Loss) study will be performed via a case-study analysis of at least 12 farms located in different regions of Georgia, to ascertain net producer economic benefits that verifies whether the hierarchical ordering of these cost of these programs to producers effectively translates to the same ordering of producer returns under such alternative labeling strategies. This project’s simulation-optimization analysis will help producers discern the ideal combination of labeling strategies for several specialty crops by providing them with indications of net business returns (profitability) and net cashflows (liquidity). Specifically, the model will help producers answer important business questions: whether the addition of one or more marketing labels (compared to marketing products under a single label) will (a) result in significant increases in revenues due to expanded market coverage; (b) bring about revenue increases due to higher price premiums; (c) result in greater cost efficiency (cost savings vis-à-vis potential returns); (d) generate overall improvements in net returns; and (e) lead to better liquidity conditions (net cash flows).
- To estimate consumers’ perceptions, intention to purchase and willingness to pay using several co-labeling strategies and to determine resulting market segments. These scenarios will serve as inputs for analytical approaches in the third objective.
- To evaluate communication content effectiveness in conveying sustainable values for various labels (i.e. Georgia Organics, Georgia Grown and other specific “locally grown” programs), to determine market coverage effectiveness in terms of direct marketing channels accessed (i.e. farmers’ markets, CSAs, and online), and to gauge geographical reach (within Georgia and surrounding states).
- To determine comparative net economic returns that producers may realize under co-labeling strategies and for different produce (entreprise budget, projections and simulations).
Cooperators
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Producer
- - Technical Advisor
- - Technical Advisor
- - Technical Advisor
Research
Objective #1
Goal: To estimate consumers’ perceptions, intention to purchase and willingness to pay using several co-labeling strategies and to determine resulting market segments. These scenarios will serve as inputs for analytical approaches in the third objective.
Methods: Online surveys will be conducted in each year (4000 total consumers surveyed) using a panel provider. Respondents will be selected in order to align demographically and regionally with the test population. Additionally, two sets of in-person interviews at farmers’ markets (total of 40+ buyers) will also be conducted. In addition to basic statistical analysis, a conjoint analysis will be used to determine the value of co-labeled products. The use of the planned behavior questionnaire approach (Ajzen, 2019) will allow to collect information on intention to purchase according to these different scenarii. A text analysis will be used to evaluate actual correlation between consumers’ perceptions on co-labeling strategies and associated purchasing behavior. Finally, a cluster analysis will be used to identify ideal customer segments with socio-demographics variables.
Outcomes:
- A further understanding of consumers’ perceptions and interpretation of the information conveyed by several co-labeling strategies.
- Increased knowledge about consumers’ intention to purchase attached to these co-labeling strategies.
- The economic value and willingness to pay of consumers for various food labels will be determined.
- Identification of relevant socio-demographic consumer profiles that Georgia producers, especially small organic farmers, could identify as their target market.
Objective #2
Goal: To evaluate communication content effectiveness in conveying sustainable values for various labels (i.e. Georgia Organics, Georgia Grown and other specific “locally grown” programs), to determine market coverage effectiveness in terms of direct marketing channels accessed (i.e. farmers’ markets, CSAs, and online), and to gauge geographical reach (within Georgia and surrounding states).
Methods: Two online surveys conducted each year (total of 4000 respondents using a panel provider). Online surveys will allow testing the relevance and impact of marketing content often associated with sustainable values by producers to communicate with their consumers. Respondents will be asked questions regarding various places in which they shop and interest in non-traditional markets (other than grocery) will be assessed. The respondents will be chosen based on their geographical location (Georgia and surrounding states of Florida, Alabama, South Carolina and Tennessee) and demographic alignment to the general population for that region.
Outcomes:
- Better understanding at marketing content that farmers could use to advertise their sustainable values in order to build long-term relationship with their market.
- Potential marketing opportunities for small organic producers beyond Georgia’s borders will be identified by assessing consumers’ interest in neighborhing states.
Objective #3
Goal: To determine comparative net economic returns that producers may realize under co-labeling strategies and for different produce (entreprise budget, projections and simulations).
Methods: In cooperation with partners, a producer survey and 12 case-studies will be conducted to collect financial and marketing data such as revenue, costs, current labeling choices, actual pricing practices, marketing decisions, marketing expenses, and opinions on labeling. The case studies will allow a comprehensive, holistic analysis of revenues, costs, net returns, and net cash flows under an optimization-simulation framework that identifies the most viable, optimal labeling alternative producing cost-minimizing, profit-maximizing business returns (comparing single versus multiple labeling strategies). Any revenue improvements are isolated into market expansion effects versus isolated price premium effect attributed to labeling strategies alone. Cost savings/efficiency and cash flow effects will also be analyzed.
Outcomes:
Entreprise budget, projections and simulations will be estimated for different crops and under the several identified combinations of co-labeling strategies in order to optimize overall business returns.
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Dissemination of All Project Information and Findings:
Results and recommendations will be disseminated through several sources. In-person or online workshops will be given in conjunction with producers and UGA Extension personnel. The university’s Cooperative Extension Service network will be tapped to assist with eliciting interest and organizing producer workshops. Moreover, partners, commodity and industry group associations, such as the Georgia Organics, Georgia Farmers’ Market Association, Georgia Grown, Augusta Locally Grown and the Georgia and/or the Southeast Fruit and Vegetable Associations can be both organizers and audiences in special workshop sessions and/or presentations at their periodic conferences.
Information will also be distributed via other conference presentations (such as the annual conferences of Georgia Organics and the Georgia Fruit and Vegetable Association, among several possibilities), academic publications (like journal articles in peer-reviewed journals) and extension publications such as outreach bulletins compiling results obtained from the various data collection and analyses methods included in this project proposal. These materials will be distributed either in print or by electronic means.
The project proponents will also be available for popular press media dissemination opportunities. These outlets will include internal networks within the university and Cooperative Extension service (such as newsletters, for example the Sustainable Agriculture newsletter, and college publications, like Southscapes, among others). External media networks, especially those associated with the industry and commodity groups, will be tapped as possible outlets for dissemination.
Objective 1: To estimate consumers’ perceptions, intention to purchase and willingness to pay using several co-labeling strategies and to determine resulting market segments.
Our results point out:
- Our findings also underscore that price or an indication of origin predominantly guide nearly half of buyers’ choices.
- We find that most buyers substitute organic and CNG while a few would consistently choose the same production practice option.
- Additionally, we find that the premium for CNG is superior to the organic one.
- Buyers’ preference on a combination of farm reputation, indication of “local” origin and a well-known production practice certification such as CNG or USDA Organic.
- Younger generations favor a combination of local over country origin with a production practice certification, i.e., primarily with CNG then USDA Organic.
- Older respondents and respondents with a higher degree of education value produce grown in and around “their area” over state and country origins.
Objective 2: To evaluate communication content effectiveness in conveying sustainable values for various labels (i.e. Georgia Organics, Georgia Grown and other specific “locally grown” programs), to determine market coverage effectiveness in terms of direct marketing channels accessed (i.e. farmers’ markets, CSAs, and online), and to gauge geographical reach (within Georgia and surrounding states).
Our results point out the importance of:
- More information on the attributes of origin and production practices when selling directly to buyers (farmers’ market, a CSA share or through an online farmers’ market).
- Greater interactions with content related to Production Process and Event Opportunities. This means content with readily useful information about the products and the farmers’ practices. Event opportunities would include sales, cooking with fresh vegetable classes, field trips for local students, and home gardening workshops.
- A preference to interact with pictures over other types of posts. Capturing pictures for content development requires the least amount of time when compared to other types of posts. Also, pictures serve as a simple way to share information compared to live video streams and discussions.
- Diversifying the social media platforms. Tik-Tok, Snapshat and Twitter seem to be underutilized as a part of farmers promotional tools. The online survey suggests that younger buyers more actively use these for most type of content.
- Evaluating consumers preferences on social and environmental attributes derived from organic and CNG standards. Our preliminary findings show that locally grown gets better rating for the 8 social and environmental values tested than USDA Organic and CNG. The comparison of labels highlights a consistent higher rating for locally grown compared to production practices. A combination of indication of origin in addition to each production practice gets overall better rating than individual label rating, especially for USDA Certified Organic.
Objective 3: To determine comparative net economic returns that producers may realize under co-labeling strategies and for different produce (enterprise budget, projections and simulations).
Our analysis was constrained by the lack of historical production costs that should be related to the estimated revenues -- determined stochastically by accounting for historical returns and variances of prices and yields. As a result, some mean returns are understandably negative since more current cost figures are expectedly higher relative to historic, stochastic revenue estimates.
Based on price data and budget collected for 3 crops blueberries, cucumber, and bell pepper, the price premium calculated for USDA organic, Certified Naturally Grown and State grown labeling, stochastic budget scenarios highlight:
- Notwithstanding the incongruent pairing of historical, stochastic revenues (yield and prices) with current costs, the results suggest that the introduction of organic product labels has led to the following percentage increases in net returns when compared to the base (no labels) for the three crops: blueberries with 104% increase, cucumbers with 490% increase, and bell peppers with 117% increase.
- The adoption of the Georgia Grown label has led to scattered increases in net returns for the three crops. Blueberries increased by 13.5% when comparing the Georgia Grown label to the base (no label). Cucumbers increased by 271%. Bell peppers increased by 87%.
- Double labeling (combining organic and Georgia Grown labels for each product) yields the most benefit in terms of increased returns. Specifically, blueberries increased by 117% when using the double labeling compared to the base (no labels). Cucumbers increased by 759%. Bell peppers increased by 200%.
Education
2 graduate students worked on this project over 6 semesters. They focused they respective MAB technical paper on social media strategies for family farms for one and stochastic scenarios for blueberries, cucumbers and bell peppers for the other. They improved their skills in data analysis, reporting and elaborating outreach materials such as fact sheet and poster.
59 undergraduate students worked on small farm marketing strategies (10 case-studies).
12 number of graduate students worked on 12 small farms business plan and 12 different crops budget.
Educational & Outreach Activities
Participation Summary:
Educational materials and programs. A number of programs and materials utilizing traditional and web-based methods will be developed for Extension professionals, organic growers and other interested stakeholders throughout Georgia and at the national level.
Traditional outreach efforts (allowed within UGA safety measures). Traditional outreach efforts will include producers site-visits ; in-person extension workshop, dissemination of results at conferences (Georgia Organics, Georgia Grown, Southeast regional fruit and vegetable) and industry-sponsored meetings.
Web-based educational programming and products. Web-based materials and resources developed from this program are expected to appeal to and reach a larger clientele base than traditional local and state-wide outreach methods. Key efforts in utilizing technology for information dissemination include the development of online webinars, workshops and Extension bulletins.
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Education and outreach activities performed to date:
- 4 workshops with growers, partners, and other additional participants from other organizations (Total number of participants: 43):
Southern buyers’ preferences: focus on organic, December 12th 2022
Online workshop session for non-profit organizations and farmers.
Role: Speaker
Number of participants: 6, Sessions: 1, (Fully at a distance)
Enterprise budgets case-studies, May 10th 2022
Online workshop for non-profit organizations and farmers.
Role: Speaker
Number of participants: 17, Sessions: 1, (Fully at a distance)
Social media strategies for small family farms, April 21st 2022
Online workshop for non-profit organizations and farmers.
Role: Speaker
Number of participants: 13, Sessions: 1, (Fully at a distance)
Southern buyers’ preferences: labels, April 12th 2022
Online workshop for non-profit organizations and farmers.
Role: Speaker
Number of participants: 7, Sessions: 1, (Fully at a distance)
- 1 online training for Extension agents and specialists (Number of participants: 13):
Understanding Buyers Preferences on Labeling Strategies Selling Local Produce, April 10th 2023
Online training session for extension agents (In-service), Center for Agribusiness and Economic Development, University of Georgia, Athens, Clarke County.
Number of participants: 13, Sessions: 1, (Fully at a distance)
- 4 fact sheets distributed online:
Goodroe, L.; Shonkwiler, V. (2023). Byne Blueberry Farms – Original Organic.
Goodroe, L.; Shonkwiler, V. (2023). RGR Farms – Organic Awareness.
Oliver, B.; Shonkwiler, V., Escalante, C. (2023). Deterministic Budget v. Stochastic Budget.
Goodroe, L.; Shonkwiler, V. (2023). Southern Buyers’ Social media Preferences.
- 3 posters presented at three professional and academic conferences:
SHONKWILER, V. (2023) Southern Buyer’s Preferences for Fresh Produce: Focus on Organic –Southeast Regional Fruit and Vegetable Conference, January 5-8 2023, Savannah. Poster. Number of participants: 2000+.
GOODROE, L., Shonkwiler V.; Escalante, C., CAMPBELL, J. (2022) Targeted Social Media Strategies: The Study of Family Farms in Georgia. 2022 Annual Meeting and Conference of the Agriculture, Food, and Human Values Society (AFHVS) & the Association for the Study of Food and Society (ASFS), Athens, GA. Presented date: May 18-21, 2022. Number of participants: 300+.
Shonkwiler V.; Escalante, C., CAMPBELL, J. (2022) Linking Buyers' Attributes with Labeling Preferences for Georgia's Local Fresh Produce. Georgia Farm Bureau Commodity Conference. Evergreen Marriot Conference Resort, Stone Mountain, GA. Presented date: August 11th, 2022. Number of participants: 200+.
- 1 presentation at a professional conference:
Shonkwiler V., Escalante, C., Campbell J. (2022) Linking Southern Buyer's Attributes with Labeling Preferences for Local Fresh Produce. Presented at the Southern Family Farmers and Food Systems Conference in San Marco, TX, August 8th, 2022. Number of participants: 9.
- 1 presentation at an academic conference:
SHONKWILER, V. (2023) Southern vegetable buyers’ preferences for cherry tomatoes based on production practice and detailed information on location of production – SAEA Conference, February 2023, Oklahoma. Paper and presentation. Number of participants: 40+
- 2 MAB students technical papers
Goodroe, L. (2022). Evaluating the Efficiency of Social Media Strategies: The Case of Georgia Family Farms Specialized in Selling Fruits and Vegetables. 23 p.
Oliver, B. (2023). Assessing stochastic budget scenarios for Georgia Family Farms: The case of blueberries, cucumber, and bell pepper.
- Students’ presentations of 12 farm case-studies and 12 crops enterprise budgets to collaborators (growers and organizations) who had the opportunity to discuss students’ recommendations.
- Students’ presentations of 10 marketing farm case-studies to collaborators (growers) and over three sessions.
- 6 growers’ presentations of their marketing strategy to 12 graduate students.
- 1 consultation with a consulting agency about the potential outcome of the results on the organization of local food systems
Activities in progress:
Presentation of the second consumer survey results submitted to the 2023 American Society for Horticultural Science conference (oral presentation).
Poster on the results of stochastic budget scenarios submitted to the 2023 American Society for Horticultural Science conference.
Workshops with growers will be held this spring and summer to present and discuss second consumer survey and stochastic budget results.
Paper to be submitted to the Journal of the American Society for Horticultural Science: SHONKWILER, V. (2023) Southern vegetable buyers’ preferences for cherry tomatoes based on production practice and detailed information on location of production.
Learning Outcomes
Changed labeling practices more focused on what matters for their customers in order to build trust and loyalty.
Gained a better understanding on which social media platform to use when targeting specific consumers based on their socio-demographic characteristics. Planning on improving their social media advertising strategy.
Project Outcomes
Partnering farmers have reported a change of practice regarding the advertising of their production practice and indication of origin in order to focus more on what matters for their customers, increase their knowledge and build trust.
Buyers, final consumers (N=3820) gained awareness on different labels related to production practices and origin. They also gained awareness on different social and environmental attributes associated with these labels.
Information Products
- Targeted Social Media Strategies: The Study of Family Farms in Georgia (Conference/Presentation Material)
- Linking Southern Buyers' Attributes with Labeling Preferences for Local Fresh Produce (Conference/Presentation Material)
- Linking Buyers' Attributes with Labeling Preferences for Georgia's Local Fresh Produce (Conference/Presentation Material)
- Southern Buyers' Preferences for Fresh Produce: Focus on Organic (Conference/Presentation Material)
- Southern vegetable buyers’ preferences for cherry tomatoes based on production practice and detailed information on location of production (Conference/Presentation Material)
- Southern vegetable buyers’ preferences for cherry tomatoes based on production practice and detailed information on location of production (Conference/Presentation Material)
- RGR Farms - Organic Awareness (Fact Sheet)
- Byne Blueberry Farm - Original Organic (Fact Sheet)
- Southern Buyers’ Social Media Preferences (Fact Sheet)
- Southern Vegetable Buyers’ Perceptions of the Social and Environmental Attributes Associated with Organic, Certified Naturally Grown and Locally Grown Labels (Conference/Presentation Material)
- Assessing Stochastic Budget Scenarios for Georgia Family Farms: The Case of Blueberries (Conference/Presentation Material)