Direct Marketing - ATTRA

Farmers markets offer better pricing opportunities, often substantially higher thanwholesale. Farmers markets let the grower set theprice, while creating cash flow (Keller andMacNear, 2012).EBT Machines and SNAP Benefits atFarmers MarketsFarmers market. Photo: NCATFarmers MarketsNumbers of farmers markets have been steadilygrowing in communities all over the country.Each farmers market is managed differently, andmost will have different application requirements.It is always best to attend a farmers market beforeapplying, in order to observe prices, types of vendors, location, and customers. A good practice isto bring a business card and talk directly with themarket manager about your farm. After visitingthe market, check the application process, feesand requirements, and deadlines for applications.Typically, there is a fee to join a market, whichis paid annually. Additionally, there are weeklystall fees that each vendor pays during the market.These fees will vary depending on the market, butthe information will be listed in the applicationpacket or on the website. Most markets requireproof of liability insurance, vehicle insurance,and other documentation to be included withthe application. Many farmers markets have winter or early spring application deadlines. If themarket has a rolling deadline, it is always best toapply before the start of the busy summer seasonbecause market managers will typically acceptnew vendors at the beginning of the season, ratherthan in the middle of the summer. If it is a yearround market, managers will be more willing toaccept your application if you can sell productsthroughout the year.Farmers markets benefit beginning and smallfarmers in many ways: Farmers markets are especially suited to thesmall and beginning farmer, and marketsoften function as business incubators.Page 4Federal funds are available for farmers marketsto apply for POS equipment to accept SNAP(Supplemental Nutrition Access Program) benefits from customers. Farmers who sell at farmersmarkets can also apply to accept EBT cards at themarket. Many managers apply for POS equipment and give tokens to customers who can usethem to purchase any approved products in thefarmers market. Vendors can then redeem thosecoupons to pay market stall fees.The WIC Farmers’ Market Nutrition Program(FMNP) is associated with the Special Supplemental Nutrition Program for Women, Infants andChildren, popularly known as WIC. The WICFMNP was established in 1992 to provide fresh,locally grown fruits and vegetables to WIC participants and to expand awareness and increasesales at farmers markets. Currently this programdoes not include meat, dairy, honey, or eggs. Avariety of fresh, nutritious, locally grown fruits,vegetables, and herbs may be purchased withFMNP coupons (USDA, 2015). The value of thecoupons varies from state to state. For example,in California, eligible families receive a packet ofcoupons worth 20 that can be redeemed at anyfarmers market April through November. Farmersmail redeemed coupons to the state agency andreceive a check. This program not only increasessales for farmers at markets, but also encouragesmore families to shop at markets.CSA –Community-SupportedAgricultureCommunity Supported Agriculture (CSA) hasbecome an increasingly common direct marketchannel for small-scale and mid-scale farmers.The 2012 USDA Census of Agriculture data indicate that 12,617 U.S. farms reported marketingproducts through a community supported agriculture (CSA) arrangement, a .5% increase overthe 12,549 farms marketing through CSAs in2007 (USDA–NASS, 2014).Direct Marketing

Community supported agriculture is a direct marketing channel in which farms pre-sell shares oftheir products to customers and offer weekly ormonthly deliveries throughout the season. Information by state also is available on the following website: nd-business-practices/direct-marketing. Thereare many different CSA models now, dependingon the size, location, and products of the farm.A 2014 Pew Commission report about a CSAresearch study indicated that smaller, diversifiedfarm operations contribute more to the economicand social well-being of a community than larger,more profitable farms. It also stated that CSA farmshave a greater likelihood of realizing a profit soonerthan farms that do not have a CSA (Jansen, 2010).Interviews with farmers who have CSAs indicatethat there is a great potential for this model to helpincrease economic viability, if networks of CSAfarmers could form through cooperation ratherthan consolidation (Milholland, 2015).A study conducted on farms in California showedthat community supported agriculture is a crucialdirect marketing channel for small and mediumsize farmers when used in combination with otherdirect marketing channels (Galt et al., 2011).More CSA farmers were able to pay themselves aformal salary, compared to farms who did not usea CSA marketing channel. There were other benefits beyond profitability that were identified byCSA farmers. Many identified important social,community, and social-capital benefits, whichstudy participants viewed as equally importantas monetary benefits (Galt et al., 2011). CaliforniaCSA farms’ gross sales on average were 9,084per acre, compared to the California average of 1,336 per acre gross sales for conventional and 2,087 per acre for organic vegetable production(Galt et al., 2011).CSA planning is often dependent on highly diversified production methods,so that customers can receive different productsduring the season. This applies to CSA operations that include meat, dairy, and eggs, too.More information about planning for CSAs canbe found in the ATTRA publication, CommunitySupported Agriculture.Because forming a CSA requires customers tosign up for the service, managing a CSA requiresa system for keeping track of payments and deliveries, and also a means for communicating tocustomers about what they will be receivingin their weekly box delivery. Below are severalCSA software management tools to assist withthe marketing and finance aspect of a CSA.CSA MANAGEMENT TOOLS less than 20/month, 20- 50/month, more than 50/month. (Note: This is not an all-inclusive list.)( ) Brookfield Farm CSA Spreadsheets, www.brookfieldfarm.org/CropPlanning.cfmThis website allows anyone to download Excel CSA spreadsheets for 25 to help manage crop planning for full season of CSA.( - ) Small Farm Central-Member Assembler CSA SoftwareSmall Farm Central has different programs to assist direct market farmers. Their CSA software Member Assembler offers freeservices for up to 25 members, then afterwards incrementally increases up to 1,000-member CSAs. Contracts are annual andbilled once per month.( ) AgSquaredFarm business planning software program with a free trial for up to 10 crops with no time limit for the trial. Company started in2009. Offers a variety of tools for recordkeeping, production costs, farm maps, crop rotations, and more.( ) Farmigo, www.csamanagementsoftware.comThis CSA software for farmers helps organize customers, boxes, and deliveries, as well as manage payments. There are options forfood hubs and producer cooperatives too. There is a free trial period for this software. When you sign up for the software, your CSAprofile will be listed on their website www.farmigo.com/ so customers can sign up for your CSA.(FREE) FarmOS, http://farmos.orgNew, open-source, Web-based farm management and recordkeeping program/website utilizing Drupal technology. Topicsinclude recordkeeping, CSA, soils, distribution, farm logs, farm maps, livestock, and more. The website is still in the process ofbeing created but anyone can participate and contribute to the formation of the site.( ) CSAware, www.csaware.comFormed with Local Harvest, one of the longest running CSAware programs to help manage CSAs. The cost to use CSAware is2% of the cost of CSA products delivered. Beginning in July 2015, CSAware implemented a tiered commission structure for CSAoperations with high sales volumes.www.attra.ncat.orgPage 5

Conglomerate/CooperativeCSA ModelsMany CSA farms have begun partnering withother farms to offer a wider variety of productsfor their customers. There has been some debateabout whether the CSA model should be a singlefarm or how much of the produce coming fromother farm locations needs to be identified. However, a combined CSA model can be somethingquite simple, like the ability to offer potatoes froma neighboring farm with similar farming practicesand mission, or offering eggs, meat, or fruit “addons” to the regular box delivery. This is one wayto make a CSA more attractive to customers, whohave many different options and styles of CSAsto choose from now. Shared CSAs have startedusing different themes for their combinations, likevegan share, omnivore share, and bread-and-buttershare. This model will require extra effort and commitment for the different farms involved, and willrequire a great deal more management time forbusy farmers. For more information on this combined model, download or order the book LocalHarvest, A Multifarm CSA Handbook. See FurtherResources section for ordering instructions.CSA Customer RetentionMany new CSA models have been created, alongwith CSA software programs. These programsallow customers to sign up, modify their order,cancel their subscription, and sign up for varying weeks of deliveries. These new systems havegreatly expanded the original definition of CSA,which meant that customers paid up front foran entire season’s worth of vegetables from thefarm. There are pros and cons of the new waysin which the CSA marketing model is expanding. On one hand, customers do not have topay so much money up front, thus a CSA shareis not so cost-prohibitive, and it gives buyers achance to try something without committing tothree or four months of deliveries. Conversely,the economic benefit to farmers is somewhatdiminished because customers are able to sign upand cancel whenever they want, and the farmers do not receive the larger pre-season incomethat came with a full-season prepayment. Forfarmers considering implementing a CSA fortheir farms, it is important to think carefullyabout what type of model to use, what type ofsoftware, and the time it will take to manageyour CSA customers. It will definitely take stafftime for administration and organizing the CSAcustomer base and weekly harvest. Additionally, because there are so many different CSAmodels, customer retention might be difficult,so learning different marketing tricks to keepyour customers signed up is important.TIPS for CSA Customer Retention Plan for product diversity throughout the season: try not deliver the same box mix more than three weeks in a row, withthe exception of the “staples” ( e.g., eggs, onions, garlic, potatoes). Many seasoned CSA farmers say “less is more.” Customers can feel overwhelmed by the quantity of items because of thepressure to cook all of the items within the week. A good range is between four and seven items. Provide newsletters with recipes in the box. If possible, work with a chef to develop seasonal recipes for each week.Include tips on storage of vegetables, too ( i.e., what to do if you can’t eat everything in one week). Have a CSA member-only event. This will build loyalty and let customers feel more connected to the farm. This workswell with meat and eggs CSAs, so that customers can see the animals on the farm. Have a “trade box” at the pick-up sites so that customers can switch out items they don’t want or need. Survey the customers and get feedback on varieties. Be creative—this could include asking customers their preferenceof a type of meat product (bacon or steak), or taste test of two different varieties of the same vegetable, so customerscan choose which one they like best for the following season. Offer discounts for full-season participation. Some farms offer a full-season CSA share with a delivery every other week. Offer bonus add-ons of dried fruit, jams, eggs, flowers, etc. (if available) for long-term customers. Arrange discounts with local restaurants or retail stores that also carry the farm products. Give restaurants a discount onproduce if they will also offer CSA customers a discount when they dine at the restaurant or shop at the store. Donate a share to a local organization, church, food bank, etc. Offer customers the option of purchasing half shares for the season.Page 6Direct Marketing

Farm to School /Farm to InstitutionFarm to school, a nationwide movement tobring more fresh, local products into schools andincrease the number of school gardens and theamount of nutrition education, has consistentlygained momentum and support among farmers,schools, and policymakers. USDA offers farm toschool grants for programs, and there are nowregional coordinators in different parts of thecountry to assist with programs. The NationalFarm to School Network (www.farmtoschool.org) supports local efforts through establishingregional networks, holding conferences, and advocating changes to policies that prevent schoolsfrom sourcing fresh, local products for students.The National Farm to School Network has successfully established a Farm to School Month, aFarm to Cafeteria Conference, and farm to preschool programs that support local farms in directmarketing their produce to schools.Farm to institution has also gained momentumas a viable direct marketing channel. Hospitals,companies, government offices, community colleges, and universities that have traditionallyemployed a dining-services management company are now looking to source more local fooddirectly from farmers. Depending on the size ofthe institution, products may be sourced directly,through a food hub, or from a food distributioncompany that works with local farms.These programs are opportunities for farmers tosell their products to schools, hospitals, corporateoffices, and other businesses to be either servedin the cafeterias or offered to employees as anemployment benefit. Farm to institution can provide a variety of direct marketing opportunitiesfor small and medium-scale farms, although volume and consistency of products are important,so larger farms have traditionally participated inthese markets.It is important to understand that farm to schoolhas regulations and requirements associated withit. School food contracts are funded by a combination of federal, state, and local sources, andeach school district will be different. Because ofthis structure, schools often require a competitivebidding process to obtain a contract for a schoolyear. School districts cannot often pay high prices,as they are dependent on funding that limits theamount of spending for each student meal. Forwww.attra.ncat.orgmeat and eggs, schools will need to purchase inbulk, and they are not often able to buy in smallquantities. Also, the school year typically runsfrom August to June, so it can be difficult to growand market products when school is in session, inthe winter months. However, this market can alsobe an opportunity for fall, winter, and early springsales, depending on a farm’s products. There is amarket to sell frozen meat products, eggs, andhoney to schools, providing that the appropriatefood safety standards are followed. Hospitals andcorporate offices often have similar purchasingrules and regulations, but they are not constrainedto a school-year calendar and are not limited byfederal funding, in most cases.Basic requirements of the farm to school/farm toinstitution market include the following: Consistent, high volume of product(s) andthe ability to sell produce at reduced prices(typically wholesale prices) Proper food safety certifications, typicallya third-party food certification such as theGAP (Good Agricultural Practices) guidelines program and food safety plan Equipment for sizing, packing, and gradingproducts (this is primarily due to specificregulations schools must follow regardingserving size/portions for students)Farm toschool hasconsistentlygained momentumand support amongfarmers, schools,and policymakers. Adequate transportation (with refrigerationif delivering meat, dairy, and egg products)and flexibility to deliver to multiple schoolsites within the school district.Although there are more regulations, there are alsomany rewards for farmers marketing to schools.Benefits include visiting the schools and interacting with students and families, the potential for aconsistent and reliable market, and the opportunity to work within the school community. Manyfarmers state that a main reason for working withschools is to connect with the local community.Farm to school also has the support of a nationwide effort to improve school lunches and increasethe amount of local, fresh produce served inschools. The National Farm to School Networkworks at the federal level to ensure policies continue to change to support this movement. Severalstates have passed legislation to enable schoolsto purchase more food for school meals directlyfrom farmers. For example, in Oregon, a groupof organizations published a report entitled TheImpact of Seven Cents (Kane et al., 2012). ThePage 7

report examines the effects of a seven cents permeal investment on local economic development,lunch participation rates, and student preferencesin two Oregon schools. The results from thisreport (Kane, 2012) garnered enough supportto pass state legislation allowing the increase sothat more food could be purchased from farmers. Farm to school continues to grow as regulations and policies change to reflect the demandsof schools, farmers, and parents.Agritourismcan create asupplementalincome for the farmbeyond raising,growing, and sellingproducts.For small to medium-scale farms, there havebeen new developments such as food hubs, whichenable smaller farms to market their productscollectively to institutions. Consult the ATTRApublication Food Hubs: A Producer Guide for moreinformation. Increasingly, hospitals and largerbusinesses are interested in offering a CSA delivery to their employees. This type of service couldbe another direct marketing channel for farmers,but it would require significant market researchand knowledge of local institutions.Some of the most common reasons farmersstated for getting out of agritourism were dealing with visitors, higher property taxes, and liability insurance (AGMRC, 2015). Because agritourism means more traffic and visitors to thefarm, another important consideration for futureendeavors should be the views and opinions ofthe neighbors. Many farms have been sued orfined for noise complaints and traffic congestionby neighboring farms or residents who value aquiet rural environment, so it is a good idea toconduct research in advance. The University ofVermont has an agritourism website with linksand resources (www.uvm.edu/tourismresearch/?Page agritourism.html).AgritourismAgritourism is growing in rural and urban areasacross the country. There are many different typesof activities that can highlight rural areas and farming communities and bring customers out to thefarm. Agritourism can provide opportunities forfarms to connect with customers, increase visibility for the farm, and also increase economic viability for farm operations. Agritourism activitiescan include u-pick operations, farm stays, Christmas tree farms, hunting and fishing, wedding andevents, farm tours, pumpkin patches, corn mazes,wine tastings, and other activities. Agritourism cancreate a supplemental income for the farm beyondraising, growing, and selling products. However,this type of marketing requires specific types ofinsurance and a general willingness to open yourfarm to customers. The ATTRA tipsheet Tips forSelling with: Agritourism and “Pick-Your-Own” listssome general considerations and tips for this typeof marketing channel. Also, the California SmallFarm Program Agritourism website (http://sfp.ucdavis.edu/agritourism/#market

direct marketing channels and the benefi ts and risks associated with each type. It off ers an over-view of the basic components of direct marketing and suggestions of where to go for more informa-tion and technical assistance on the topic. Because direct marketing is a complex and rapidly changing