Exploring New Markets &Crops Brett Wolff brett.wolff@uky .edu - - PowerPoint PPT Presentation

Exploring New Markets &Crops

Brett Wolff brett.wolff@uky .edu

Product Place Price Promotion

Kentucky Produce Marketing Channels:

Farms Selling More Than 10% into One Channel

2009 2012 2018 sales Farmers’ markets 52% 41% ++ On-farm markets 41% 41% + Cooperatives/Assoc/Food hubs 2% 3% + Non co-op wholesale 15% 14% ++ Direct to restaurant 8% 7% ++ Auction 19% 17% ++ CSA 3% + Direct to retail 16% + Farm-to-school/institution 4% 1% +

Source: Kentucky Produce Marketing and Planting Intentions Survey , 2010, 2012,2018

Customer Purchase Decision

Features & Benefits (Value) Customer Purchase = Price

Color Quality Know person Local Package Knowledgeable Service Recipes Friendly Unique formulation Taste Location/demand Presentation/ Merchandising Referral …. ….

Customer Purchase Decision

Customer Purchase = Price

Market Lineup

• Roadsidestand
• C

S A

• FamersMarkets
• On-FarmRetail
• ProduceAuctions
• LocalWholesaler
• Retail Grocers
• Restaurants
• Distributors
• Farm – to – School

KeyVariables:

• Price vs. Volume
• Difficulty to Enter
• Product Quality, Volume and

Variety Expectations

• Risk vs. Reward
• RELA

TIONSHIPS

Roadside Stands, Farmers Markets

Category Considerations Stats Producti

• n and

Marketing

Difficulty to Entry Low Time Requirement High Compatible with off-farm employment Yes Row Crop, Tobacco, Livestock Yes Quality andShelf-life importance Med-High

Investments

Commitment Level Low-high Management Level Low-High Initial Capital Low Facility Investment Low

Incomeand Potential

Prices High Price Stability High Volume Low Potential SalesVolume Low-Med Development Potential Excellent

• High prices,
• pportunities for

direct customer interaction

• Limited salesvolume

potential

• Marketing istime

intensive

• Lower barriers to

entry

Category Considerations Stats Productionand Marketing Difficulty toEntry Low TimeRequirement High Compatible withoff-farm employment Yes Row Crop, Tobacco,Livestock Yes Quality andShelf-life importance Med-High Investments CommitmentLevel Low-high ManagementLevel Low-High Initial Capital Low FacilityInvestment Low Incomeand Potential Prices High PriceStability High Volume Low Potential SalesVolume Low-Med DevelopmentPotential Excellent

Community Supported Agriculture

• Managing lots of

crops, multiple harvest dates, multiple seasons

• Verymanagement

intensive

• Customer expectation
• f weeklyshare

On-Farm Retail

Category Considerations Stats

Production and Marketing Difficulty to Entry Low-Med Time Requirement Med-High Compatible with off-farm employment Yes Row Crop, Tobacco, Livestock Yes Quality andShelf-life importance Med Investments Commitment Level Low Management Level Med Initial Capital Low-Med Facility Investment Low Incomeand Potential Prices Med-High Price Stability High Volume Low Potential SalesVolume Low-Med Development Potential Good- Excelle nt

• Low-Medium

Potential Volume

• Can be time-intensive

Produce Auction

Category Considerations Stats Producti

• n and

Marketing

Difficulty to Entry Low Time Requirement Low Compatible with off- farm employment Somewhat Row Crop, Tobacco, Livestock Yes Quality andShelf-life importance High

Investments

Commitment Level Med Management Level Med Initial Capital Med Facility Investment Low

Incomeand Potential

Prices Low-Med Price Stability Low-Med Volume Med Potential SalesVolume Med-High Development Potential Good

• Medium-to-high

Potential Volume

• High Price volatilty,

relatively low prices

• Quality expectation

higher.

Local Wholesaler

Category Considerations Stats

Producti

• n and

Marketing

Difficulty to Entry Med Time Requirement Med-High Compatible with off- farm employment Somewhat Row Crop, Tobacco, Livestock Somewhat Quality andShelf-life importance High

Investments

Commitment Level Low-high Management Level Low-High Initial Capital Low Facility Investment Low

Incomeand Potential

Prices Med-High Price Stability Med-High Volume Med Potential SalesVolume Med Development Potential Good- Excelle nt

• Significant quality

expectations

• Lower prices/unit
• Harder to breakinto

the market

• Volume expectations

Color Quality Know person Local Package Knowledgeable Service Recipes Friendly Unique formulation Taste Location/demand Presentation/ Merchandising Referral …. ….

Customer Purchase Decision

Customer Purchase = Price

Retail Grocer

Category Considerations Stats Producti

• n and

Marketing

Difficulty to Entry Med Time Requirement Med-High Compatible with off-farm employment Somewhat Row Crop, Tobacco, Livestock Somewhat Quality andShelf-life importance High

Investments

Commitment Level High Management Level High Initial Capital Med-High Facility Investment Med

Incomeand Potential

Prices Med-High Price Stability Med-High Volume Med Potential SalesVolume Med Development Potential Good- Excelle nt

• Moderate volumes

and difficulty of entry

• Quality and ShelfLife

are IMPERA TIVE

• Prices can be

moderate in the right situation (customer demand, localvalued, etc.)

Restaurant

Category Considerations Stats Producti

• n and

Marketing

Difficulty to Entry Med Time Requirement Med-High Compatible with off-farm employment Somewhat Row Crop, Tobacco, Livestock Somewhat Quality andShelf-life importance High

Investments

Commitment Level High Management Level High Initial Capital Med-High Facility Investment Med

Incomeand Potential

Prices Med-High Price Stability Med-High Volume Med Potential SalesVolume Med Development Potential Good- Excelle nt

• Quality, varieties are

very important

• Communication about

needs very important

• Considerationsabout

delivery (costs vs. value)

Distributor

Category Considerations Stats

Productionand Marketing

Difficulty to Entry High Time Requirement Med Compatible with off-farm employment Difficult Row Crop, Tobacco, Livestock Difficult Quality andShelf-life importance High

Investments

Commitment Level High Management Level High Initial Capital High Facility Investment High

Incomeand Potential

Prices Med Price Stability Med Volume High Potential SalesVolume High Development Potential Fair-Good

• Volume-driven market

channel

• Low prices, high

volumes

• reduced marketing

time, longer supply chains

• Quality isnon-

negotiable

KDA Programs

K YProud

• 6000+ food businesses andmarkets
• Importance of brandprotection
• Ramping up new supplier readiness andcapacity

K D A Merchandising P O P grants Restaurant Rewards/BuyL

• c

a l

• 57 restaurants in2010
• 95+ farms, 7distributors
• 160restaurants/institutions

L

• c

a l ProductsMarketing

• Grocery
• Restaurants, schools, andfoodservice
• Farmers markets (

S N A P , W IC, SeniorNutrition)

• Dept Public Health &

home-basedprocessing

Product Possibilities ……… Customer Groups ………

Use a market-customer diagram to stimulate ideas

Think of all the possibilities, then focus Use your results to launch market researc

Example

Pumpkins Sweet Corn Strawberries Direct Retail Low volume, higher price potential. Lots

• f space/weight.

Bulk opportunities, smaller volumes Highest $ for short window, may discount for canners Restaurants Some seasonal food interest, also decorations Small to medium volumes, moderate price May pay more for

• quality. Bring

samples. Grocery With established relationship offers volume possibilites Talking with buyer ahead of time crucial, but Shelf-life considerations of picked ripe, worth it? Other Consider offering decoration packages to homeowners, businesses or working with someone who does Food trucks may serve sweet corn, canners may want to buy bushels. Consider sampling to show quality. Emphasizing quality is crucial. Labor intensive crop demands higher

• prices. U-pick or on-

farm are options.

Market Coordination

• Some products may not generate a profit in some

markets but can be the reason customers come to you.

• Y
• u cant always sell everything at the Farmers

Market.

• Don’t stretch yourself too thin trying to access

multiple markets.

• Be careful with prices – make sure they are

consistent throughout differing markets.

KeyVariables:

• Price vs. Volume
• Difficulty to Enter
• Product Quality, Volume and

Variety Expectations

• Risk vs. Reward
• RELA

TIONSHIPS

Sampling & Demonstration Services in Perspective

40% 45%

Sampling Expandedmarket days Expanded market hours Rest room access Debitcard Cooking/recipe demonstrations Expandedparking Senior nutrition and/or food stamps Entertainment

Services in most demand in K Y Farmers' Market

9 10

0% 5% 10% 15% 20% 25% 30% 35%

Based on 302 patron intercepts in 11 different K Y Farm Markets, Summer 2009 Services rated on 1 = ‘not important’ to 10 = ‘very important’

Frequency of Product Purchasing

N = 1,132

C C DT eam: Brett Wolff ChristyCassady JoshKnight Hort Council ExecutiveDirector: CindyFinneseth

Horticulture BizQuiz

How does it work?

• Series of Questions
• Key variables:
• Land(Y/N)
• Capital (Y/N)
• Labor (Y/N)
• Provides starting point to talking

with agents

Screening Questions

Do you want to grow horticultural crops as part of a business (i.e. to make money)?

If not… “Based on your answers, it appears that you may not be ready to grow horticulture products for sale. That’s OK! We have a widevariety of resources to help get you startedin growing crops on a smaller scale so you can build your experience and knowledge. Regardless of your scale, your local Extension Office will be there to help.”

Capital, Land &Labor

How much capital (money) do you have tocommit to this enterprise? How much land do you have (or plan to have) available? How much labor can you access (besidesyourself)?

Computer Magic

Example Result

Results: Your responses indicate that you have: Access to Capital Access to Land Limited to no Access to Labor Having access to capital means that you may be able to invest in equipment, branding and marketing, or other startup costs. Land access—whether through rent or through

• wnership—is a huge advantage. Generally, horticulture operations don’trequire

massive amounts of land, but having some is a really good start. There’s no getting around it: horticultural crops are labor-intensive. Limited access to labor will not keep you from growing crops to sell, but it does mean that you have to think hard about how much you can manage. It also means that you’ll want to avoid large amounts of very labor-intensive crops. Y

• ur next steps:

1.Print or Screenshot the "Results" section above (you can also take the quiz again at your county office)

• 2. Contact your county agent to share your results and talk further.
• 3. Go here for additional resources

Example text, cont.

With labor as your limiting factor, you'll want to select less labor-intensive crops and be sure to be realistic about the scale of your operation. A few crops you might consider--based on your responses are listed below. Consider:* Asparagus Winter Squash Honey Broccoli or Cauliflower Avoid or limit: Strawberries Tomatoes Hand-picked beans Berries

Example Text, cont.

*Your agent has a larger list and the experience to help you identify and rule out other options. Since you are planning to sell your crops, it is imperative that you identify markets before you plant. This includes checking that you understand the quality, volume, and food safetyrequirements

• f different markets. We've listed some resources below to help

you identify markets, and explore your options further. **The tool provided at this site is intended foreducational purposes and is not a guarantee of operational success or profit. It is your responsibility to build your production skills, refine your business idea, and develop a profitable market. We are here to help you identify useful resources that will help you alongthe way to success.**

Caveats

• This is NOT designed to be afinal answer—just a

way to ask a few questions to get people thinking.

• We want this to result in aconversation with

YOU.

• As with any business, there will be exceptionsto

the general guidelines, but a simple tool can’t account for that.

0.5 1 1.5 2 2.5 3 17-Apr 24- Apr 1- May 8-May 15- May 22- May 29- May 5-Jun 12-Jun 19-Jun 26-Jun 3-Jul 10- Jul 17-Jul 24-Jul 31-Jul 7-Aug 14- Aug 21- Aug 28- Aug 4-Sep 11- Sep 18- Sep 25- Sep 2-Oct 9-Oct 16- Oct 23- Oct

Tomatoes, Avg. Price, KYFM2014-16 ($/lb)

R ura l Urba n

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2000 4000 6000 8000 100000 120000

Pric e Quantity(lb)

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Week

K Y Produce Auction, Price and quantity (#1 & #2 tomatoes)

Q ua ntity Price

Additional Resources

– University of Kentucky, Center for CropDiversification

• What to Think about Before youPlant
• Price Reporting (Produce Auction and FarmersMarket)
• Market Profiles

– University of T ennesseeExtension

• Choosing Direct Marketing Channels for AgriculturalProducts

– Kentucky Department ofAgriculture

• Office of AgriculturalMarketing
• Farmers Market Manual

Exploring New Markets &Crops

Brett Wolff brett.wolff@uky .edu

Hashtag and Photo Activity

Brett Wolff brett.wolff@uky .edu

What are hashtags?

#summer

#sharethelex

# gardensidelex

# loafofbrett

• Hashtags can be very popular orcompletely

unpopular

• Using them for marketing requires you tobe

somewhere in the middle

• Not lost in the “noise” but also not just talking to

yourself

• Consider regional or localhashtags
• Look around on Instagram or facebook tosee which tags

are popular

• Don’t get caught chasing likes—focus on getting

your content in front of actual potential customers

Make sure you have

• ne of

these sheets

Activity

• During the tour, take a picture of something cool

and post it to Instagram and/or Facebook

• Write a brief caption and then add(simply type)

three hashtags

• You choose the first two, but the third one should

be #ccdroadside

• Thisis just for usto have fun with—you don’t want to

use this one in thefuture.

• After the tour, go and find other people’s photos

by searching for or clicking on the hashtag in your post and make acomment on it.