Farm Markets: Selling the experience as well as the product
Wednesday, June 1, 2011
With big chains like Wal-Mart starting to sell local produce in earnest, farm markets have to offer more than just a quality product at a fair price. Providing an enjoyable experience and appealing to all generations is one recipe for success
by SUZANNE DEUTSCH
Buying local is the hottest trend in grocery marketing. Author Jeff Rubin in his best-selling book, "Why your world is about to get a whole lot smaller," says carbon-conscious, energy-conscious food consumers are clamouring for more homegrown food. His neighbouring park in Toronto hosts a farmer's market covered with stalls where local farmers sell family farm produce to urban consumers.
Moreover, consumers say they want to support local farmers, explains Andreas Boecker, an associate professor at the University of Guelph's Department of Food, Agricultural and Resource Economics (FARE). He says buying from a farmer assures them that the produce is local and it's perceived as being fresher. However, if farm marketers don't offer something exciting along with their produce, they will face problems in the future. That's why savvy direct marketers are already offering to educate and/or entertain their customers, too.
This trend of choosing local or regional foods, along with foods making other claims, such as high animal welfare, fair trade and organic foods is expected to accelerate by 2012, according to the consumer unit at IGD, a U.K.-based non-profit think tank of food and grocery experts.
The main concept in Rubin's book is that high energy prices will force people to live and shop more locally in the future. But Boecker says that rising fuel prices will adversely affect local farm marketers, too. "The distribution system is a bottleneck," he explains.
"The more oil prices rise, the more difficult it will be in the long run to persuade consumers to come to your farm just to buy produce especially if customers can buy similar quality ones in a supermarket store, that has the added benefit of offering one-stop shopping."
Nor are the big grocery stores willing to give up their market share without a fight.
John Stanley, the "Retail Guru" from Western Australia, speaking at the 2011 Manitoba Direct Farm marketing conference last March in Portage la Prairie, said that, while people want to buy local, Wal-Mart, Loblaws and the other big players have made it very clear that they want the local, fresh markets, too.
"The retailers won't be worried if (they lose) one or two per cent of the market, but if it's getting beyond that they will respond," Boecker says. "They will have their own marketing strategies and you see them already using the Foodland Ontario marketing scheme, and having all of these promotions in their own stores."
Fresh food offerings in supermarkets are relatively new. Stores didn't bother selling fruit or vegetables at first because people just bought them at the Mom and Pop shops and wet markets. But today, says Rob Gerlsbeck, editor of Canadian Grocer, fresh produce accounts for 12 per cent of sales in Canadian grocery and mass merchandise stores like Wal-Mart. About 52 per cent of those are in vegetables and 48 per cent are in fruit.
Wal-Mart's announcement in March 2011 that it is planning to build 40 new Super Center Stores across the country, is a sign that the competition is only going to get tougher.
In order to deliver produce that is fresh, Wal-Mart has established a 24-hour supply chain in Ontario that moves food from its distribution centres to the stores "more efficiently than any other food retailer," says a Nov. 15, 2010, press release, "so budget-conscious Canadians don't have to compromise between saving money and buying fresh food."
Wal-Mart's stated goal is to purchase 30 per cent of its produce locally on an annual basis. "It's important to us to buy locally because it helps support the Ontario economy and keeps our carbon footprint low," says Sam Silvestro, the company's director of produce, in a press release. "In fact, for locally-grown produce like strawberries and apples, our goal is to offer customers 100 per cent local choice in season."
The big chains haven't been kind to farmers' markets in other parts of the world once they decide to directly compete for market share. In Australia and New Zealand, Stanley says, they used their expertise in running a supermarket, in sourcing and inventory control to set up small open markets, and forced most farmers markets out of business.
Boecker says it's happened in Germany, too. "There used to be almost a dozen really big farmers' markets and they're all gone except two," he says.
Putting exact numbers on how large a slice direct farm sales are taking from the retail pie isn't easy. Boecker says no hard sales numbers are available. Figures that are out there are only estimates. The Ontario Farm Fresh Marketing Association's (OFFMA) 2009 On-Farm Marketing report valued direct farm sales at $250 million. This represented about 1.03 per cent of the total grocery sales in Ontario. Statistics Canada's 2009 numbers show this amount equalled 2.55 per cent of Ontario gross farm receipts of $9.8 billion. The OFFMA study says the total economic impact of the province's 750 farm markets is $420 million a year.
As competition for the local food market heats up, Stanley says it doesn't make a lot of sense for producers to try to compete with supermarkets on price. Instead producers should focus on selling the experience. That's why people are now starting to refer to them as farm markets, so the name reflects the diverse number of activities consumers can do at one.
No weekly specials
Michelle and James Herrle, owners of Herrle's Country Farm Market near St. Agatha, west of Kitchener, say they keep their prices fairly steady throughout the season and do not have weekly specials or discounts. They do their best to keep their prices in line with what needs to be charged to grow a quality product, to pay their employees fairly and to sustain business.
Some of their items are less expensive at their farm market, such as celery, radishes, and squash, while other items are competitive. "We definitely do not compete on price for items that supermarkets regularly use as loss leaders, such as strawberries, sweet corn, tomatoes and peaches," Michelle Herrle says. In fact, they charge significantly more for these products because theirs are freshly picked from their fields or those of neighbouring farms.
Sweet corn is their signature crop and the Herrles go to great lengths to satisfy the appetites of their customers. In fact, they'll bring corn in from fields located one hour south to be the first in the area to offer Ontario corn. They also put row covers on a few acres to be as early as they can with harvest.
Their sweet corn is mostly hand-picked, with only big orders being done with a harvester. In order to make sure their in-store corn is always fresh, they'll either sell the extra corn at the end of the day wholesale or donate it to the local food bank.
Supermarkets will go to considerable lengths to emphasize the local nature of their produce. Laura Hughes of Springridge Farm near Milton got a big surprise when she walked into their local supermarket ten years ago. The produce department had a giant 12-foot-high by 100-foot-long mural of a picture-perfect farm painted on the wall in the produce department. The painting, featuring beautiful strawberry fields nestled into the picturesque Niagara escarpment, was of their family farm. "They wanted to bring the country feeling into their store," Hughes says.
However, she says on-farm stores offer something totally different from the supermarkets. Their farm caters to all generations. "A grand-parent on the wagon ride will be remembering, relating and sharing with a grandchild what they remember of days when farms were much more common," she adds. "The mom, the sandwich generation in that case, is happy to have time with the child and the grand-parent, and the child loves the farm."
She also points out that farmers can talk in length about the crops they grow as well as the ones they source from neighbouring farms. "It becomes a story in itself and that doesn't happen at the grocery store."
Hughes says they augment Springridge's on-farm sales operation with agritourism. They built their business up slowly by taking the time to listen to what their customers said they wanted. When clients mentioned they would like to be able to buy refreshments, they started selling them. From there, they branched out into homemade pies and jams made from their cherries. Sometime later, customers wanted a play area for their children, educational tours and farm birthday parties, so they supplied them, too. They now host 18 parties on a weekend and had 23,000 children last year for school tours.
Better returns
Some 100 kilometres northeast, Walter and Colleen Pingle farm and operate Pingle's Farm Market in Hampton. Walter converted the former dairy farm into a cash crop operation back in 1974. At the time, they sold pumpkins to the Stokely Van Camp canning factory. When it closed, they started selling directly to the public. Today, besides the pumpkin patch, they offer a variety of pick-your-own fruit and freshly baked items from their bakery. They also sell flowers, hanging baskets and bedding plants that they grow in their greenhouse.
They find direct marketing offers them better returns than wholesale channels and approximately one quarter of their land base is dedicated to product they sell through their farm market. They wish all their products could be sold this way, but they find matching supply and demand difficult.
Pingle says they quickly figured out that the best way to get people to spend more money was by entertaining them. They offer a number of seasonal activities, including wagon rides and a giant corn maze, as well as school tours.
Still, they find that drawing customers back to their farm each year is a problem. One solution, Pingle says, would be to stay open year-round. However, since they aren't growing anything during the winter months, he's unsure how well it would work for them.
They kick off the year with an Easter egg hunt. "It isn't very ‘farmy,' but the kids come to our farm and we hide Easter eggs in our apple orchard and all of the children plant some seeds in the greenhouse to take home with them," Pingle says. "From Easter until Christmas we're open seven days a week. It's almost like milking cows again."
Running a successful farm market takes a lot of know-how and hard work, apart from the actual farming, says Hughes. "But agritourism has made all the difference in the world for our operation. The alternative for a lot of farmers in our position would be to sell and move further north."
Two of their grown children now work full-time with them and, in the fall, their staff swells to well over 100. "Ontario is now in the forefront with what they (farmers) are doing with farm markets," she says proudly.
Boecker says Hughes' farm is larger than most farms which participated in FARE's new farm direct marketing study. The FARE project, funded by the Ontario agriculture ministry, will soon be available through the OFFMA)website and other organizations that are involved in direct farm marketing. It provides case studies and Excel based calculators to help farmers assess which direct marketing channels are more profitable.
Farmers typically don't value their time as highly as they should, Boecker says. Many expenses, like transportation to supply restaurants, for example, tend to disappear in the costs of the overall operation. By not keeping track of how much time they spend on various activities and expenses such as staffing a store or investment and operating costs, farmers won't know where to direct the efforts in order to grow the business or which lines are losing money.
Boecker says a similar initiative by Cornell University in 2008 and 2009 resulted in seven out of nine farmers changing their marketing strategies after taking part in the study.
Communication strategy
Telling your story is a great way to reach out to customers, argues retail guru John Stanley, and never before in history have farmers had the opportunity to talk directly to their customers by using social media. Drawing a smart phone from his pocket, he says: "You've got them here in Canada. There is no reason for you not to own one and at least have a presence on Facebook. YouTube is your own TV channel, use it!"
During his travels, Stanley has seen all kinds of creative ways that people use to promote their businesses. He calls cabbies and hairdressers "tipsters" since they have access to a wide audience and pass on information to their customers. Cabbies, given a free breakfast, will be sure to recommend that restaurant to their clients, he says, and hairdressers will be happy to talk extensively to their clients about the basket of produce they received from a local farmer and distribute flyers or business cards.
Lisa Tinley, public relations specialist with Telegram Communications in Winnipeg, encourages producers to be proactive with media and use them to spread the word on the work they are doing. "Media love human interest stories and farmers are an incredible source of these."
To producers, she says: "You are the expert. They (the media) come to you for a reason and, while you might not think you are good, you have the message."
The best way to get media attention, according to Tinley, is to generate press releases with good strong titles and give reasons why people should come out to their farm. A press release is a basic element of a publicity plan that is absolutely free and many examples of good releases can be found on the Internet.
The time spent writing releases won't go to waste if the content is recycled and used for newsletters or to feed a website. She warns, however, that news outlets want a message that is relevant and timely, and that a press release should have at least a quote they can use, contact information and an explanation of what sets you apart from the competition. "Saying you're a berry producer isn't enough."
"All press is good press," concurs Murray Boonstra of Boonstra Farms and Murray's Maze, located 20 minutes north of Winnipeg. In business for over 20 years, his U-Pick berry operation with a petting zoo and a corn maze has been the source of countless local stories to the point of concerns about suffering from overexposure from a local reporter who had fallen in love with their place.
Facebook is part of Boonstra's marketing strategy. He also advertises in the local paper and in the Winnipeg Free Press. His operation has become such a hot venue in the Winnipeg area that CBC as well as HOT103, Winnipeg's number one hit music station, now pay him to keep their logos well in sight. Boonstra even sold the rights to his 10-acre field of feed corn and stamps out an "official sponsor's" logo, turning it into a maze, thanks to GPS technology.
When television broadcasts show an aerial view of the logo, it gives him phenomenal exposure. "You try to piggy-back on a lot of things," says Boonstra. "The year the Assiniboia Downs (horse racing track) did it, every week they had a huge screen there and it showed Murray's Maze and a picture of their horses saying Assiniboia Downs and Murray's Maze right on it."
Stanley underscores the need to engage the customers and focus on their experience at the farm instead of the product. "The old business paradigm no longer applies," Stanley says. "It went out the door with the financial meltdown. We've entered into ‘the experience economy' where the priority is put on the customer relationship."
Farmers should no longer think of themselves as sellers of corn, potatoes or strawberries because customers can buy these products more cheaply and conveniently in the supermarket.
For his part, FARE's Andreas Boecker thinks Ontario still has room for more on-farm markets. He says some on-farm stores will get fairly big and location will play a major role in whether they become successful. Being close to a major road or a route that is used during vacation time will be a major asset, but the number one challenge will be to get consumers to the farm.
Stanley agrees that convincing people to leave their homes and drive out to the country will require some effort. He suggests drawing up an action plan and getting started, or the alternative may well be to go out of business. BF
SIDEBAR: Creating an experience that makes the customer want to come back
On her way home after work, Jennifer Mantel stops by Herrle's Country Farm Market for their amazing peaches, fresh peas and beans, pumpkins and squash. She describes the number of times she'll stop during strawberry season as just "insane!"
The Kitchener mother of two says checking a cob of corn by breaking it open would just be a waste of time, and Jennifer would know. She's never had a bad one and she's been eating Herrle's corn since she was a little girl. On the way to the cashier, she'll pick up frozen chicken wings to pop in the oven, fresh market salsa and nacho chips as appetizers, and grab one of their pies for desert – all in less than 10 minutes.
Owners Michelle and James Herrle have spent years working on every aspect of marketing that makes a stop at their farm market truly memorable. Michelle proudly says that inspiring meal ideas is part of her job.
The couple strongly believes a store's exterior should be a reflection of its interior. Every effort has been made to increase the store's curb appeal. Whether it's the manicured landscaping, the signage or the play area, everything works together to encourage customers who drive by to say: "Wow, let's stop here!"
Customers who do aren't disappointed. The aroma of freshly-baked signature pies and buns greets them as they walk through the door. The rustic country market decor gives a wholesome, natural feel to the place and helps people connect to the romantic side of farming and rural living. Music sets the mood and appropriate lighting enhances the displays.
Further back in the store, people anxiously wait for the huge metal bin, mounted on a railing attached to the ceiling, to drop a new load of freshly picked corn, before they dash to fill their bags. An electric train runs around the store on wall-mounted train tracks. Michelle says it helps enrich people's memory of the place and keeps awestruck children occupied while their parents get their shopping done.
While Jennifer appreciates all these things, shopping at Herrle's gives her something even more precious – time. A stop there will allow her to put a nutritious meal on the table in less than 30 minutes and still make it to the soccer field with the kids on time.
And, this is key, says John Stanley, the retail guru from Australia. Since women are still the ones who primarily shop for the household, finding ways to make their shopping trip more convenient or offering perks to get them to visit your business with a friend is worthwhile.
Women shop differently if they are with a man, shopping alone or with a female friend, Stanley explains. He cites an Irish study showing that the average woman with a female friend will easily go for a 90-minute shopping excursion and spend $121. The typical man shopping on his own though, will spend a mere $19 in eight minutes. BF