Karen Ullmann B.A. Environmental Studies Public Health Concentration Bates College
Feasibility of Direct Producer to Consumer Marketing in an Urban, Low-Income Community Yearlong Community-Based Thesis
August 2011 Âł May 2012
Objectives:
Abstract
i Understand
Direct producer-to-consumer marketing in a local food system transfers produce straight from farmers to consumers. This research examines the feasibility of a variety of direct-to-consumer strategies in the urban twin cities ² Lewiston-Auburn, Maine ² a community that is working to marry food systems, public health and HQYLURQPHQWDO HIIRUWV 2IILFLDOO\ ODEHOHG D ´)RRG 'HVHUW ¾ WKH FKDOOHQJH IDFHG E\ WKLV community is to address issues of access, availability and affordability. This study assesses the feasibility of four direct producer-to-consumer strategies ² IDUPHUV¡ markets, community supported agriculture (CSA), food buying clubs and mobile food trucks ² as a means to cultivate community, support local agriculture, improve health and address access to food. Based on the premise that solutions begin and end with the community, qualitative and quantitative data were triangulated to capture community feedback on these strategies: 98 consumer surveys, 24 producer surveys, 12 key informant interviews and 1 low-income community focus group. Barriers to greater adoption of local foods include the perceptions that local foods are too expensive and the observation that fewer people cook, buy seasonally and shop at local markets due to inconvenience. Limited income community members are particularly challenged, because they may not have the time, energy and resources to access healthier foods. Informants suggest incentive programs, policy changes and increased fiscal support from private and federal investors to increase access to healthy food. From a business perspective, market feasibility depends largely on strong management, organized operations, strategic use of technology, and welldefined consumer and producer targets. Interest from various actors ² farmers, businesses, nonprofits, community partners, and investors ² evidence growing momentum and support for local foods across Maine. The success of direct producer-to-consumer marketing in limited income, urban communities, however, is D ´ZLFNHG SUREOHP¾ RQH WKDW ZLOO GHSHQG RQ ODUJHU VRFLDO HFRQRPLF DQG SROLWLFDO value shifts.5
resources and infrastructure available to increase direct marketing in Maine; i Learn what gaps
need to be addressed; i Assess community
understanding and interest in buying local foods;
i Assess farmer
willingness to enter new markets and resources need to meet demand. Contents: Direct Marketing
2
Interview Findings
3
Consumer Findings
4²5
Producer Findings
5²6
Resources
7
Empirical Context Lewiston-Auburn (L-A) ² 2nd largest metropolitan area in Maine Population1
59,647 people over 101 miles2
Demographic2
4,000+ Somali immigration in past 10 years
Poverty3
42% childhood poverty rate; 94% of students qualify for free/reduced-price meals
Food Desert3
High prevalence of fast-food in low-income areas; Supermarkets 40% less expensive, but less accessible
Page 2
Direct Marketing Direct producer-to-consumer marketing transfers produce straight from producers to consumers. This marketing strategy creates a mutual relationship between producers and consumers. The middleman distributor between food production and sale is removed, and the producer is responsible for all storage, packaging, distribution and advertising. Circumventing the middleman has social, economic and environmental benefits such as support of local businesses, improved community aesthetic, decreased pollution from transportation, inter-community cash flow and agriculture sustainability. A shorter supply chain also demands greater transparency and accountability in the production of food. (Anderson; Hinrichs; Ver Ploeg et. al) Literature shows that producers involved in direct producer-toconsumer marketing are typically small, self-employed farmers. They tend to employ multiple marketing strategies and must be innovative and resourceful in an evolving local food system. Direct marketing of local foods equals higher sales return, autonomy and competition for small farmers in contrast to larger supermarket chains monopolizing the organic industry. Direct marketing is a small but growing segment of our national food system and may be a strategy towards greater community food security. (Martinez et. al; Adams et. al; Kambara and Shelley)
)DUPHUV· Markets
Achieving community food ƐĞĐƵƌŝƚLJ͕ ͞Ă ĐŽŶĚŝƚŝŽŶ ŝŶ which all community residents obtain a safe, culturally acceptable, ŶƵƚƌŝƚŝŽŶĂůůLJ ĂĚĞƋƵĂƚĞ ĚŝĞƚ͕͟ ŝƐ Ă ͞ǁŝĐŬĞĚ͟ ƉƌŽďůĞŵ ĚƵĞ ƚŽ the complex convergence of social, political, economic and ecological issues.4 ͞tŝĐŬĞĚ͟ ƉƌŽďůĞŵƐ͕ ͞ĚĞĨLJ Ă ƐŝŶŐƵůĂƌ ƐŽůƵƚŝŽŶ͕͟ ĂŶĚ ǁŝůů therefore require multiple creative solutions.5
Common area where several farmers gather on a recurring basis to sell various fruits and vegetables. These markets are recognized for encouraging community interaction. They are oldest but most popular form of direct marketing nationally.
Community Supported Agriculture (CSA)
&RPPXQLW\ WKDW SOHGJHV WR VXSSRUW IDUPHUV E\ SXUFKDVLQJ LQ DGYDQFH D ´VKDUHµ RI their crop in return for a weekly produce box. CSAs were initiated in a 1960s movement towards more organic and less processed foods. They require greater FRQVXPHU FRPPLWPHQW WRZDUGV IDUPHUV· VHDVRQDO VXFFHVVHV DQG FKDOOHQJHV
Food Buying Clubs
Group of community members that pool their resources to buy in bulk from farmers at a wholesale price. Food Buying Clubs require community engagement, support and communication. Challenges include the time, effort and planning involved in bulk ordering. Long-term storage and processing knowledge is helpful.
Mobile Food Trucks
Motorized vehicles that sell either fresh produce or made-to-order healthy, cooked food. Their advantage is mobility and affordable start-up costs. A trendy and innovative option for entrepreneurs interested in targeting certain groups and/or locations.
Page 3
Findings Key Informant Interviews
Recommendations: i Reduced or incremental
Twelve key informant interviews were conducted across the state of 0DLQH LQFOXGLQJ FRPPXQLW\ RUJDQL]HUV IDUPHUV IDUPHUV¡ PDUNHW managers, 1 emergency food provider, 1 wholesale food distributor, 1 nonprofit retail storeowner and 1 food buying club software designer.
payment options i Store discounts or Incentivized shopping
Interviewees emphasized the following themes: community values, affordability, management, education and funding. Obstacles to greater adoption of local foods include perceptions that local foods are too expensive and the observations that fewer people cook, buy seasonally and shop at local markets due to inconvenience. Interviewees also reiterated that market feasibility depends on a strong manager with a vision and ability to galvanize community support. Like any comparable business venture, the manager must strategically consider hours and location, structure and expectations, as well as, advertisement and online buying. Overall, affordability was identified as the largest challenge to success. Interviewees found that given the difficult consumer dilemma of quantity (less expensive calories) or quality (high-density, nutritious and organic) foods that are more expensive, unhealthy foods are better than no food and local food is not necessarily a priority. Finances also influence the quality of food at Emergency Food Providers and the sustainability of incentive programs, making it difficult escape the cycle of poor nutrition.
i Government and private
i Community gardens
i i
i i i
funding Adapt government assistance regulations Work shares with multiple forms of participation Farm wholesale to food pantries and nonprofits Education on meal planning and budgeting Shared facilities for food storage, processing, and preservation for more value-added products owned by farmers
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know that they learn that that's available they can pick their own directions, and then as you go along you can further define and improve how each one looks in your community, so there's no buying club \RX FDQ VWDUW RQH LI \RX KDYH D PRWLYDWHG SHUVRQ Âľ 6RIWZDUH 'HVLJQHU
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afford it or not.You buy so that you could feed family, and if you can afford to feed your family the fresh IUXLWV DQG YHJHWDEOHV WKHQ , WKLQN PRVW SHRSOH RSW WR GR WKDW Âľ &RPPXQLW\ 0HPEHU
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Page 4
/HZLVWRQ :LQWHU )DUPHUV路 0DUNHW 6XUYH\ Consumer Findings (n = 98) DEMOGRAPHICS Age
Average = 46
94% White
Frequency
1% African 5% Other
Shopping Frequency
Percentage
Winter
41% first time 32% monthly 27% twice or more over the season
Summer
30% weekly 28% 1-2 times per season 22% once a month
Miles from Market
20% 2-3 times per month
BEHAVIOR Reasons for Attendance
Percentage
Page 5
DIRECT MARKET FEEDBACK Interest in Alternative Markets
Barriers to Local Food Access
Open-ended Recommendations: i More frequent winter markets i Need more vendors i Too crowded i Too expensive (The acceptance of EBT or Electronic Balance Transfer is not well advertised)
Key Points: Â
i Average consumer is white, 46 years old and lives 1-5 miles from the market. i Price and incentive programs are not major reasons for market attendance, suggesting low-income consumers are not attending the winter market. [Low-income Focus Group Informants, however, suggest their participation is higher in the summer] i ,QWHUHVW LQ DOWHUQDWLYH PDUNHWV LV KLJK EHWZHHQ ´VRPHZKDW¾ WR ´YHU\¾ LQWHUHVWHG LQ RI categories, although no market seems to be preferred significantly. [General Rank Order: (1) CSA, (2) mobile vendor, (3) online ordering, (4) food buying club] i Those who attend the market do not perceive many significant barriers to local food access. If anything, expense is the greatest barrier.
Page 6
Producer Findings (n = 24) DEMOGRAPHICS Producer Employment
Percentage
Percentage
Producer Size by Annual Sales
Miles from Market
Percentage
Product Diversity
Percentage
MARKET PARTICIPATION
Page 7
MARKET EXPANSION Interest in Alternative Markets
Interest in Expansion (9 in 10) Yes
No
Preferred Market for Expansion
Key Points:
Percentage
i Most producers are small business owners. Over half of producers are selfemployed and make modest annual sales (<$20,000). i High product quantity and diversity is available in local area. 71% of producers live within 20 miles of Lewiston-Auburn and producers sell a wide range of product, a reflection of well-planned market management. i )DUPHUV· PDUNHWV DUH SURGXFHUV· SULPDU\ form of marketing, followed by direct-toretail (42%), CSA (30%) and co-op (22%). i Direct-to-consumer marketing is more significant than direct-to-retail. Over 4 in 5 vendors find direct-to-consumer marketing represents 70% or more of their sales. Only one vendor finds direct-to-retail to take up anything greater than 60% of their sales. i High interest in market expansion (87.5%). Interest in alternative markets resides EHWZHHQ ´QHXWUDOµ WR ´VRPHZKDWµ interested, slightly lower averages than consumers. As with consumers, producers prefer no market significantly over another.
Resources Adam, Katherine, Radhika Balasubrahmanyam, and Holly Born. "Direct Marketing: Business Management Series." Appropriate Technology Transfer for Rural Areas (ATTRA) (1999). Anderson, Molly D. "The Case for Local and Regional Food Marketing." Farm and Food Policy Project (FFPP) (2007). Diamond, Adam, and Ricardo Soto. "Facts on Direct-to-Consumer Food Marketing: Incorporating Data from 2007 Census of Agriculture." USDA: Agricultural Marketing Service (2009). Dimitri, Carolyn, and Lydia Oberholtzer. "Marketing U.S. Organic Foods: Recent Trends from Farmers to Consumers." USDA: Agricultural Marketing Service (2009). 2 Ellison, Jesse. "The Refugees Who Saved Lewiston." The Daily Beast. Newsweek/Daily Beast, 16 Jan. 2009. Web. 22 Aug. 2012. <http://www.thedailybeast.com/ newsweek/2009/01/16/the-refugees-who-saved-lewiston.html>. Feagan, Robert. "Direct Marketing: Towards Sustainable Local Food Systems?" Local Environment 13.3 (2008): 161-67. Hinrichs, C. Clare. "Embeddednees and Local Food Systems: Notes on Two Types of Direct Agricultural Market." Journal of Rural Studies 16 (2000): 295-303. Kambara, Kenneth, and Crispin Shelley. "The California Agricultural Direct Marketing Study." (2002). Kantor, Linda S. "Community Food Security Programs Improve Food Access." Welfare Re form and Food Assistance 24.1: 20-26. 1 "Lewiston and Auburn (city) QuickFacts from the US Census Bureau." Lewiston (city) Quick Facts from the US Census Bureau. N.p., n.d. Web. 22 Aug. 2012. <http://quickfacts.census.gov/qfd/states/23/2338740.html>. Martinez, Steve, Michael Hand, Michelle Da Pra, Susan Pollack, Katherine Ralston, Travis Smith, Stephen Vogel, Shellye Clark, Luanne Lohr, Sarah Low, and Constance Newman. "Local Food Systems: Concepts, Impacts, and Issues." USDA: Economic Research Report (2010). 5 0HWFDOI 6DUD 6 DQG 0LFKDHO - :LGHQHU *URZLQJ %XIIDOR¡V &DSDFLW\ IRU /RFDO )RRG $ Systems Framework for Sustainable Agriculture." Applied Geography 31.4 (2011): 1242-251. Neff, R. A., C. L. Parker, F. L. Kirschenmann, J. Tinch, and R. S. Lawrence. "Peak Oil, Food Systems, and Public Health." American Journal of Public Health 101.9 (2011): 1587597. 4 3RWKXNXFKL .DPHVKZDUL ´&RPPXQLW\ DQG 5HJLRQDO )RRG 3ODQQLQJ %XLOGLQJ ,QVWLWXWLRQDO 6XSSRUW LQ WKH 8QLWHG 6WDWHV ¾ ,QWHUQDWLRQDO 3ODQQLQJ 6WXGLHV -67. Ver Ploeg, Michele, ERS, FNS, and CSREES. "Access to Affordable and Nutritious Food: Measuring and Understanding Food Deserts and Their Consequences." USDA: Economic Research Service (2009). 3 Walter, Kirsten. "Local Food for Lewiston: Exploring the Role of Food Assessment as Part of Broader Work in Community-engaged Food Systems." Maine Policy Review. 1st ed. Vol. 20. 159-61.
Karen Ullmann B.A. Environmental Studies Public Health Concentration Bates College FoodHubInquirer.org @Karen_Ullmann KarenUllmann.tumblr.com Ullmann.Karen@gmail.com
Karen Ullmann is a recent graduate of Bates College with a Bachelor of Arts in Environmental Studies and Public Health. During her undergraduate career, Karen worked closely with various community partners to address food security in Lewiston-Auburn, Maine. She planned events, attended meetings, edited reports and designed educational materials to build community support. The presented thesis merges her interests in environmental studies, public health, community development and sustainability. Over the summer, Karen worked as an educational instructor for Stone Barns Center for Food & Agriculture, an 80-acre non-profit dedicated to increasing public awareness about healthy, seasonal and sustainable food. Karen is now researching Food Hubs. She is traveling cross-country to interview different people about the significance and interpretation of Food Hubs in their communities. Her travels can be followed at FoodHubInquirer.org.