Comparison of Seasonal (High Peak/Summer) Markets for Dairy Farm Product Sales

Problem

Given limited marketing resources, (time and funding), which marketplace (local sourced retail grocery store chains or local, well-established farmer’s markets) returns the largest economic value to small farmstead dairy farmers?

Solving this problem is important because farm sustainability depends upon profitability. Farmers have limited resources and are searching for maximum profits. Knowing this information would mean farmers could direct their marketing efforts toward those venues that lead to higher profits.

Farmers are entrepreneurs, and as entrepreneurs they understand that company success is measured in customer sales. Customer sales are linked to marketing efforts (such in-person tasting and demonstrations). Yet, few marketing studies are available to assist local farmstead dairy farmers in their understanding of markets which give them the maximum profitability given consistent marketing efforts. This lack of marketing studies has been primarily due to the loss of sustainable family farmstead dairies in the U.S., and in turn the rise of large dairy farms strictly selling to coops that purchase liquid milk in bulk.

The need for this grant funded study is second to none. There is very little actual research available for farmstead dairy owners in general, and it is even scarcer when looking for any studies where the tasting and demonstration efforts of local farmers are compared between markets. Many farmers are limited in their marketing budgets and this information would assist them in determining where marketing efforts would be best spent.

The implications of this study could be far reaching to the entire North Central Region—not only impacting the operations of small, local farmstead dairy farmers but small, direct sale farmers (including animals and produce). As the production and demand continue to increase for local foods produced in a sustainable fashion grow, the need for the answer to this question becomes more imperative.

Solution

Comparison of Markets for Greatest Profitability Missouri Based Sales Venues

Hen House Grocery Store 6238 N Chatham Ave, Kansas City, MO 64151 Telephone: 816.746-1400 Website: www.henhouse.com

Family owned store since 1910. Largest retail grocery store that has a CSA and purchases products from local farmers. High barriers to entry.

Borgman's is positioned to start demo-ing and selling products in Hen House in 2016.

City Market (Farmer's Market) 20 E. 5th Street, Suite 201 Kansas City, MO 64106 Telephone: 816.842.1271 Website: www.citymarket.org

Oldest and largest farmer's market in Kansas City Missouri.
Borgman's is positioned to start demo-ing and selling products in the city market in 2016. Both markets are located in Kansas City, Missouri.

Borgman’s will sell/demo the same products to both market/venues at the same time/date and the same wholesale price. At the end of the research/study period an analysis will be conducted to determine which market results in the greatest number of sales and revenues.

Borgman’s will hold the following constant (between both markets)

1. Products
2. Price
3. Promotion
4. Time/Season (Saturdays and Sundays: April 1 – September 30th)

New part-time sales/demo people will be hired to support existing employees in product tasting and demonstrations.

1. Training will be the same to both groups of employees--given by the owner of the dairy
2. Marketing materials will be the same--prepared by the dairy owner
3. Products demo-ed will be the same

Times/dates of Demo-ing

1. Every Saturday and Sunday
2. 8:00 am – 2 pm
3. April 1st – September 30th
4. 2 people on Saturday (Retail store/farmer's market)/2 people on Sunday (Retail store/farmer's market – 4 demos per week.