Transcript New Directions in Alabama Agriculture: Niches, Chains, and

New Directions in Alabama
Agriculture:
Niches, Chains, and
Relationships
Joseph J. Molnar
Agricultural Economics and Rural Sociology
Auburn University
Butler-Cunningham Conference Montgomery 8 October 2004
Objectives
► Clarify
notion of market
niche in farming
► Identify marketing chains
and their implications for
producers
► Discuss communitysupported agriculture
(CSA)
Alabama
Vegetables
Peak
Begin
/End
Alabama’s 72
farmers’
markets
Farmer's markets
When people come looking
► for an experience,
► Generally don't work when they
► depend on third-party vendors
► Replacement of farmers with resale vendors seemed to
kill a downtown Birmingham market under the red
mountain expressway in the early 1990s
► Same mistake in the 1980s with state farmer's market
► Montgomery's downtown curb market near Crampton
bowl retained relationships and atmosphere
► Birmingham’ Pepper Place is pricier and spiffier
►
Marketing Niche
Uses of term Niche (Nich, Nish) N.
► Physical
 A recess in a wall, as for holding a statue or urn
 A cranny, hollow, or crevice, as in rock
► Socioeconomic
►A
situation or activity specially suited to a person's
interests, abilities, or nature: found a niche in life
► A special area of demand for a product or service:
the best carving pumpkins in East Alabama
► Biological
 Function or position of an species within an ecological
community
 Particular area within a habitat occupied by a species
A Niche Market
►A
focused segment of demand for a good or
service
► A product or service that is not otherwise
supplied by mass retailers
► A narrowly defined group of potential
customers
► An acute interest in a specialized product,
experience, or service
► Direct, on farm OR at other venues or
modes
Niche Marketing
► Finding
a unique aspect or type of buyer
focusing efforts on reaching that niche
► Differentiate product, or set it apart from
those of competitors
► Target to a select group of customers with
unique needs or interests
► Promoting through web site, flyers,
advertising, speaking
Some Popular Niches
► Organic
and natural foods, cut flowers,
vegetables and decorative vegetables
► Building a customer base either by word of
mouth or through advertising
► Connections to identity of farmer, land,
locality
► Agrotourism
"U-pick" Operations
► Location,
location,
location
► 100+ in Alabama
► Renewed growth in
popularity
► Combining experience
with product
Practical Market Research
► Ask
buyers and customers what they want
► If you own a roadside stand, ask those
people who purchase from you or shop at
your stand,
 Why they stopped?
 What are they looking for?
 What else can you do to meet their needs?
Supply Chains
Supply Chain Management
►A
procurement model
► Streamlining the distribution system
► Reducing number of transactions
► Firms want to treat fresh produce like other
food
► Commodities with more stable pricing and
volumes
Fresh Produce Industry
► Greater
vertical coordination of
the distribution system
► Via more supply chain oriented
procurement models
► Growth of the Supercenter format
► Compelling force on all retailers
Supply Chain Elements
Consumer Interest in Organic
►A
Supply Chain in formation
► Whole Foods and other corporations
feature organic items
► Sales still represent a niche market
► Composed of many sub-structures and
interactions
► Great deal more complicated than may first
appear
Organic Vegetables
► Organic
is a distinct product characteristic
► Typically premium prices
► Certification of land takes 3 years,
documentation, and consultant
► Niche served by CSAs, other direct
mechanisms
 Community-supported agriculture or CSAs
 Consumers "subscribe" to a nearby farmer's
fruit and vegetable harvests
Consumers Value Fresh Produce
► From
a producer they trust and respect
► As much as a product with an organic label
CSAs = Marketing +
Relationships
Community Supported Agriculture
►A
viable alternative
► To the long-distance
relationship most of us
have with food we eat
► Farm-to-table clubs
What Is Community Supported
Agriculture (CSA)?
► An
innovative & resourceful strategy to connect
local farmers with local consumers
► Develop a regional food supply & strong local
economy
► Maintain a sense of community
► Encourage land stewardship
► Honor the knowledge & experience of growers &
producers working with small to medium farms
CSA
► Is
a unique model of local agriculture whose
roots reach back 30 years to Japan
► Where a group of women concerned about
the increase in food imports
► And the corresponding decrease in the
farming population
► Initiated a direct growing & purchasing
relationship between their group & local
farms
Arrangement
► "teikei"
in Japanese
► Translates to "putting
the farmers' face on
food“
► Japan in the 1960's to
find pesticide-free foods
Growing fresh produce using only
environmentally-sound practices for families
in and around Tuscaloosa, Alabama. To get
better produce, you'll have to grow it
yourself
Concept
► Traveled
to Europe & was adapted to the
U.S.
► Given the name "COMMUNITY SUPPORTED
AGRICULTURE" at Indian line farm,
Massachusetts, in 1985
► Over 1000 CSA farms across the US &
Canada
► At least five in Alabama
CSA
► Partnership
of mutual commitment between
a farm & a community of supporters
► Provides a direct link between the
production & consumption of food
► Supporters cover a farm's yearly operating
budget by purchasing a share of the
season's harvest
CSA Members
►Make
a commitment to support the
farm throughout the season
►Assume the costs, risks & bounty of
growing food along with the farmer or
grower
►Members help pay for seeds, fertilizer,
water, equipment maintenance, labor,
etc
Farm Provides
► To
the best of its
ability
► A healthy supply of
seasonal fresh
produce
► Throughout the
growing season
Mutually Supportive Relationship
► Between
local farmers, growers & community
members
► Helps create stable farm operation
► Members assured the highest quality produce
► Often at below retail prices
► Farmers & growers are guaranteed a reliable
market for a diverse selection of crops
How Does CSA Work?
► Money,
members & management
► A farmer or grower
► Often with the assistance of a core group
► Draws up a budget reflecting the production
costs for the year
► Includes all salaries, distribution costs,
investments for seeds & tools, land
payments, machinery maintenance, etc
The Budget
► Divided
by the number of people for which
the farm will provide
► Determines the cost of each share of the
harvest
One share
► Designed
to provide the weekly vegetable
needs for a family of four
► Some purchase fractional shares 1\2, 1\4
► Seasonal or year-round
► Flowers, fruit, meat, honey, eggs & dairy
products are also available through some
CSA
Community Members
► Sign
up & purchase their shares
► Either in one lump sum before the seeds are
sown in early spring
► Or in several installments through-out the
growing season
► Production expenses are thereby
guaranteed
► And the farmer or grower starts receiving
income as soon as work begins
CSA members
► Receive
a bag of fresh, locally-grown
produce
► Typically organic
► Once a week from late spring through early
fall
► Summer and fall in northern climates
► And year-round in milder zones
Members
► Prefer
a wide variety of vegetables & herbs
► Which encourages integrated cropping &
companion planting
► These practices help reduce risk factors
► And give multiple benefits to the soil
Crops Are Planted in Succession
► To
provide a continuous weekly supply of
mixed vegetables
► As crops rotate throughout the season
► Weekly shares vary by size & types of
produce
► Reflecting local growing seasons &
conditions
CSA Vary Considerably
► Based
on farm or garden location, practices
► Specific farm & community goals & needs
► Memberships include a variety of community
members
► Low-income families, homeless people,
senior citizens, & differently-abled individuals
► Extra fee typically is charged for home
delivery
Many
► Try
to expand to provide additional food
items such as honey, fruit, meats, eggs, etc
► Networks of CSA have been forming to
develop associative economies
► By growing & providing a greater range of
products in a cooperative fashion
Some CSA
►Provide
produce for local restaurants,
roadside stands or farmers' markets
►While building farm membership
►Or in many cases, in addition to it
Some CSA
►Have
members come to the farm &
weigh out their own share
►Leave members behind any items they
don't want at a surplus table
►And possibly find something there they
could use
Some CSAs
►Other
farms have a distribution crew
►To weigh items & pack shares
►To be picked up my members at the
farm
►Or at distribution points
A Core Group
► Farmers
or growers, distributors & other key
administrators, & several CSA members
► The decision-making body for CSA
► Determines short & long-range goals
► Prepares the budget
► Conducts publicity & outreach
► Organizes events, etc
Basic Means of Communication
Between the farm & its members
►Annual meetings
►A member newsletter
►And occasional surveys
Why Is Community Supported
Agriculture Important?
► CSA's
direct marketing gives farmers &
growers the fairest return on their products
► CSA keeps food dollars in the local
community
► And contributes to the maintenance &
establishment of regional food production
► CSA encourages communication &
cooperation among farmers
CSA
► Creates
opportunity for dialogue between
farmers & consumers
► CSA creates a sense of social responsibility&
stewardship of local land
► CSA puts "the farmers face on food"
► Increases understanding of how, where, &
by whom our food is grown
Farmers and Club Members
Say that the key to their dialogue is that
► Despite
the fading of family farms
► Ever faster pace of urban life
► Endless choices of the convenience culture
► The land and things that spring from it still
carry a mystique
Conclusion
►Market
niches
►Marketing chains
►CSAs