- Farm Business Management: new enterprise development, community-supported agriculture, cooperatives, marketing management, market study
- Sustainable Communities: local and regional food systems, new business opportunities
The increasing demand for and short supply of locally grown food in the United States is well-documented. Best selling books attest to the importance of eating locally, there are 70% more farmers’ markets in the U.S. than there were a decade ago and Packaged Facts, a market research firm, predicts that local food sales will rise from $4 billion in 2002 to $7 billion in 2011. University of Maryland agricultural economist, Jim Hanson, asserts that demand is indeed outpacing supply, which he believes is inspiring many producers to explore new marketing channels for accessing these burgeoning markets (Brown 2009). The Intervale Center is responding to this growing demand by working with farmers to develop creative, collaborative marketing solutions that are convenient, profitable and fair. Indeed, collaborative marketing allows small and medium-sized producers to overcome some of the limitations of individual marketing by taking advantage of economies of scale in advertising, packing and transporting products. A Producer Survey the Center conducted in 2007 highlighted farmer desire to market collaboratively and directly to consumers. 35% of farmers chose multi-farm Community Supported Agriculture as their top alternative marketing practice (Intervale Center 2009). This identified interest, coupled with a Center for Rural Studies’ consumer survey’s finding that the demand for CSA shares in Chittenden County exceeds the supply, led to the development of the Food Basket, a multi-farm CSA with workplace drop-off sites that launched in 2008 with the help of a SARE Sustainable Communities grant. In 2009, twenty farmers sold over $180,000 worth of product though this program, which will achieve financial self-sufficiency next year. Farmers have not just benefited financially from the program; they have forged strong relationships with fellow producers, received technical assistance to help them achieve quality and consistency, improved their billing strategies and begun to think creatively about ways to streamline sales, increase production and improve quality of life. As such, this group of farmers has identified restaurants as another market they believe they can successful serve collaboratively. Based on their experience working together to supply the CSA, they know that opening additional markets will mean additional profits and more time. The Intervale Center has researched farm-to-restaurant models such as Penn’s Corner, Eastern Carolina Organics and Grasshoppers Distribution and contacted over twenty local restaurants to determine their current purchasing patterns, interest in local farm products and benefits and limitations of current distributors. We found that restaurants favor locally grown produce because it is fresher, tastier and preferred by customers, but many are not wholly satisfied with current distribution systems. Just as farmers identify collaborative marketing as a way to increase the efficiency of their growing businesses, chefs and restaurateurs see collaborative marketing as a unique solution to the logistical challenges they face when they buy directly from multiple producers or try to source locally from larger distributors, who often lack the knowledge and customer service needed to facilitate local purchasing. Helping farmers access this market in ways that are convenient, profitable and fair is important because it will increase consumer access to local foods in restaurants and keep more of every food dollar in our community.
Project objectives from proposal:
In this project, we will help at least ten farm businesses collaboratively market their products to five or more restaurants and catering businesses in Chittenden County, Vermont, in order to increase sales, streamline supplies and develop a model for marketing farm products that can be replicated by other groups in Vermont and beyond. Our goal is to launch the business in June of 2010 and gross over $50,000 in our first year.
This project responds to a need identified by its farmer participants by coordinating the development and launching a collaborative marketing program that consolidates product for sale to restaurants and catering operations. This program will be a win-win for farmers and buyers, as it will streamline purchasing for buyers, simplify marketing for farmers and allow participating farmers to access technical assistance as needed to enhance their overall marketing strategies. In this way, we seek to not just enhance participant farms’ profitability, but free up time that can be reinvested in production and improve overall quality of life.
We will advance our conversations with local chefs to identify current limitations and opportunities for local food distribution. We will negotiate logistics, including product availability, pricing, packaging, delivery and billing requirements. At the same time, we will work with the collaborative of farmers to assess product supply, potential competition with existing farms and collective branding. We will access expertise from a logistics consultant and a marketing consultant to help with the development of a strong order fulfillment system and branding materials. In the summer of 2010, we will begin selling product, reaching our goal of $50,000 in sales by December 2010.
This project will build on the success of other collective marketing projects, such as Penn’s Corners CSA, Good Natured Family Farms, Lancaster Farm Fresh and Red Tomato, to develop a system for consolidated restaurant sales at the appropriate scale for our region. Once accomplished, this project can serve as a model collaborative marketing solution that other groups of small and medium sized producers can adopt.