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Local Foods Marketing

Dr. Tim WoodsUniversity of Kentucky

Economics

+Local Foods Marketing

1. Knowing the markets

2. Product development

3. Branding, differentiation, competition

4. Taking advantage of support programs, agencies, and training

Economics

+Marketing Channels for Local Food

Community Farm Markets

On-Farm Retail Markets

CSAs

Local Wineries

Direct Market Venues

+Marketing Channels for Local Food

Restaurants

Grocers

Auctions

Institutional buyers

Farm to School

Direct to Retailer and WholesaleMarket Venues

• Number of U.S. farmers markets up dramatically since mid-1990s

From 1,755 in 1994 to

8,144 by 2013

More than 5,000 new farmers

markets since 2000, an

increase of 175%

2,500+ vendors in KY

U.S. Farmers Market Growth: 1994-2013

Source: Diamond, USDA-AMS 2011; USDA AMS

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Economics

Kentucky Produce Marketing Channels: Farms Selling More Than 10% into One Channel

(2003 and 2012)

---Markets--- 2003 2012Farmers’ markets 52% 41%On-farm markets 50% 41%Cooperative/Assoc 15% 3%Non co-op wholesale 17% 14%Direct to restaurant 12% 7%Auction 9% 17%CSADirect to retail groceryFarm-to-school

3%21%

3%16% 1%

Source: Kentucky Produce Marketing and Planting Intentions Survey, 2004, 2012

Economics

+ What are consumers thinking?

+Local food as an experience good

Distinctive value propositions are highly relational

+Why Consumers Value “Local”

Minimizing food miles/energy dependency

Land and environment

Perceived Safety and Quality

Support local ag and economy

Thilmany, Bond, Bond (2008)

Heritage

Quality/Health benefits

Environment and Economy

Citizenship and community

Woods & Williamson (2013)

Social media a strong tool to convey these value propositions

3 C’s of Farm to School

• Community– Engage the community

• Cafeteria– Use the cafeteria to promote local foods and

farms• Classroom

– Implementing a Farm to School curriculum and learning experiences

3 C’s of Farm to School

“We did a taste testing with heirloom tomatoes and the farmer actually came and was passing out the tomatoes, and we said this is the farmer…. The

kids were just like ‘Oh wow, a real life farmer!’ It was just really exciting.” -Fayette County FSD

+Getting to know the markets

Directories Farm to school (KDA) Farm markets (KDA) On-farm retail markets (KFB Roadside Markets) CSAs (KDA) Restaurants (KDA- Restaurant Reward Program) Auctions (UK Crop Diversification Center) Wholesalers and Processors (KDA, UK MarketReady, KCARD,

UK Specialists) Grocery Buyers (KDA, UK MarketReady)

+Getting to know the markets

Visit the markets, talk to buyers

Talk to peer producers selling either similar products or into similar markets

Evaluate competing products for (1) number, (2) price, (3) similarity

+Product Development

Value-added products

Packaging, logos, branding expectations from buyers

+ University of Kentucky Food Systems Innovation Center

Provides technical services, marketing intelligence, business services and training components to aid in developing the food industry of Kentucky Food Chemistry Testing Nutrition Labeling Analytical Services Microbiological Testing Sensory Evaluations

Brand New! www.uky.edu/fsic/

+ MarketReady Modules

Communication & Relationship Building Packaging Labeling Pricing Supply Delivery Storage Invoicing Insurance Quality Assurance & Temperature Control Certifications & Audits Satisfaction Guarantee Working Cooperatively Marketing – An ongoing process Local Products for Local Markets

+Branding, Differentiation, Competition

Building the “local” brand – consumer awareness

KY Proud programs Membership – at cost POP materials, signage POP Grant program Restaurant Rewards

Farm Estate Branding

+Support Programs and Agencies for Local Food in Kentucky

MarketReady, Better Process Control School, FSIC

UK Crop Diversification Center

KDA Farm Market Program, KY State Health Dept

KY Farm Bureau Certified Roadside Market Program

Network of Certified Kitchens (KSU/UK/FSIC)

KY Center for Ag and Rural Development

+ …

Presenter:

Dr. Tim A. Woods

Extension Professor, University of Kentucky Agricultural Economics

tim.woods@uky.edu, 859.257.7270 x.274

Questions?