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

1. 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

2. Objectives • Clarify notion of market niche in farming • Identify marketing chains and their implications for producers • Discuss community- supported agriculture (CSA)

4. Alabama’s 72 farmers’ markets

5. 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

6. Marketing Niche

7. 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

8. 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

9. 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

10. 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

11. "U-pick" Operations • Location, location, location • 100+ in Alabama • Renewed growth in popularity • Combining experience with product

12. 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?

13. Supply Chains

14. 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

15. 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

16. Supply Chain Elements

17. 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

18. 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

19. Consumers Value Fresh Produce • From a producer they trust and respect • As much as a product with an organic label

20. CSAs = Marketing + Relationships

21. Community Supported Agriculture • A viable alternative • To the long-distance relationship most of us have with food we eat • Farm-to-table clubs

22. 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

23. 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

24. Arrangement • "teikei" in Japanese • Translates to "putting the farmers' face on food“ • Japan in the 1960's to find pesticide-free foods

25. 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

26. 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

27. 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

29. 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

30. Farm Provides • To the best of its ability • A healthy supply of seasonal fresh produce • Throughout the growing season

31. 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

32. 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

33. The Budget • Divided by the number of people for which the farm will provide • Determines the cost of each share of the harvest

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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

41. Some CSA • Provide produce for local restaurants, roadside stands or farmers' markets • While building farm membership • Or in many cases, in addition to it

42. 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

43. 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

44. 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

45. Basic Means of Communication Between the farm & its members • Annual meetings • A member newsletter • And occasional surveys

46. 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

47. 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

48. 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

49. Conclusion • Market niches • Marketing chains • CSAs