Direct-to-consumer sales is one of the fastest growing segments of U.S. agriculture.
According to USDA’s 2012 Census of Agriculture, 144,530 farms sold $1.3 billion in fresh, edible agricultural products directly to consumers in 2012, a 6 percent increase in the numbers of farms and 8 percent increase in receipts over the previous Census conducted in 2007. In addition, 94,799 farms in 2012 sold further processed, value-added goods like beef jerky, fruit jams, jelly, preserves, floral arrangements, cider or wine.
University of Arkansas Extension Economics Professor Dr. Ron Rainey said increasingly, producers of fruits and vegetables in particular are seeking ways to market a packaged, shelf-stable product. The University of Arkansas-Fayetteville Food Science Department offers entrepreneurs access to a co-packing facility that allows them to process small amounts of their goods, and instruction in such techniques as labeling and marketing, dehydration, meat processing, canning and preserving.
UA also participates in MarketMaker, an Internet-based service that links farm marketers to consumers.
“Consumers continue to seek out connections to where their food comes from, and understanding agriculture,” Rainey said. “Some of it is pure entertainment; some of it is the need to understand how their food is produced. The industry looks at it in terms of a ‘less processed’ or ‘cleaner’ product – fewer preservatives and ingredients, more natural and organic. MarketMaker continues to thrive in that space in terms of being a tool that helps connect farmers with consumers.” At a conference in Austin, Texas in May, Arkansas received the national program’s Innovation Award.
A guide prepared by three University of Missouri scientists, Selling Strategies for Local Food Producers, identified marketing techniques that can be used to enhance direct sales to consumers. The researchers, Drs. Bill McKelvey, Mary Hendrickson and Joe Parcell, said the producer should have the basics covered before opening for business or making a sales call. Among those were, “Is your product fresh, clean and ready for sale? Are samples prepared?…Is your product priced fairly and competitively? Is your price list accurate and up-to-date?…Is your display neat, accessible and attractive? Are prices clearly marked? Is the name of your farm displayed on boxes, banners or signs?”
The scientists said developing strong selling skills, which can be learned, is critically important to acquiring and keeping customers in a direct marketing enterprise. This includes such methods as maintaining eye contact with the customer, a neat and well-dressed appearance, and speaking without hesitation and with normal voice inflection. The seller should keep punctual hours, and engage the potential customer right away, so the buyer does not decide to go elsewhere.
In addition, good production skills and superior postharvest handling techniques can ensure high-quality products that command premium prices. This can be enhanced by learning customers’ produce preferences, so these crops can be provided at the market in the future. Post signs to let the buyers know which crops will arrive at the marketplace later in the season. The successful marketer can stay in touch with customers with an Internet site, newsletters, and handouts on such topics as nutrition, cooking, storage and preservation tips, classes, events, contests, history and origins of select food crops, relevant news stories and policy issues.
Pricing can also be an issue.
The scientists say, “A thorough knowledge of your farm’s financial condition can ensure that you employ the right pricing and advertising strategies to gain the most profit. Being aware that you are competing with supermarkets and other farmers at your market or in your particular region can also help ensure success. At the end of the day, you want customers to spend more of their dollars with you.”
