Direct Marketing Study by Dr. Andreas Boecker in the Dept. of FARE...
Posted on Friday, January 21, 2011
A how-to for farmers looking to gain from the local food movement By Alycia Moore Canada’s local food movement has largely been driven by consumers’ efforts to support local communities, and to ensure environmental sustainability. Now, University of Guelph researchers are looking at the direct marketing of agri-food products as an opportunity for producers to profit from this growing consumer trend. Direct marketing involves farmers selling directly to end-users or consumers. That’s how farm produce was traded originally. Over time, intermediaries (processors, retailers, etc.) became part of the sales process. But now it’s back to the roots of direct marketing with farmers markets, pick-your-own operations and Community Supported Agriculture (CSA), as well as traditional roadside stands and on-farm markets. In addition a whole suit of new marketing and promotion models are emerging, including online marketplaces, auctions, and selling of goods through fundraisers. So what’s the best way to succeed in this resurging environment? With support from Ontario Ministry of Agriculture, Food and Rural Affairs, Prof. Andreas Boecker, Department of Food, Agricultural and Resource Economics, and Prof. Melanie Lang, Department of Marketing and Consumer Studies, are identifying and defining best practices for farm-direct marketing, from the producer perspective. They’ve surveyed 20 producers so far and found mixed results. “From the producers surveyed so far, we’ve found that a majority of operations were started through a series of trial and error attempts. Direct-marketers must be willing to experiment systematically, determining which ventures are feasible both from a production as well as marketing stand-point,” says Boecker. Once the best practices have been established through a series of surveys and market analyses, they will work to develop a tool or “how-to” manual to help farmers in making the best decisions for their specific operation. “We have now mostly finished the first stage of data collection, the entry survey, which involves recruiting participants and establishing relationships while also getting to know the participants farming operation,” says Boecker. In the second stage of data collection, the researchers work together with each farmer to identify a particular aspect of the marketing activities to be investigated in-depth. These analyses will provide participating farmers with the direct benefit of enhanced information about their own operations –for example, how profitable a certain marketing activity is. At the same time, for the researchers, this type of first-hand data is key in providing a context from which to establish best practice accounts and key performance indicators, says Boecker. The results from the initial survey show that the participants represent a very diverse sample of direct-marketing ventures including the marketing channel used, as well as the types of products sold. This is representative of the wide-range of diversity within the farm-direct sector. Boecker says there’s no guarantee of success. About half of the surveyed participants reported having withdrawn from at least one direct marketing channel, due to low profitability. However, when operated successfully, direct-marketers are able to avoid the low returns associated with traditional wholesale marketing for many operations, particularly small-scale ones. By the end of the project, the researchers will have a collection of case studies from which to identify best practices. Additionally the team is currently applying for knowledge translation and transfer program funding as part of a long-term strategy to ensure that the results of their research will remain accessible to interested producers and the general farming community.