Posted December 14, 2006: There are great opportunities
for farmers with marketing vision as demand for food with a clear
connection to the producer continues to outpace supply. The need
to break the barriers of selling to direct, retail and institutional
food markets—and to develop new tools to help farmers succeed
in niche markets—is forging innovative relationships between
farmers and buyers at many levels.
Consider Iowa’s new Market Maker (www.marketmakeriowa.com),
an interactive, online mapping system designed to link food producers,
distributors, buyers and sellers. When the site goes live in early
2007, it will integrate U.S. Census data, North American Industry
Classification System (NAICS) codes, global imaging satellite (GIS)
location coordinates and data supplied by Iowa farmers. By overlaying
this data and technology, buyers and sellers will have the ability
to truly target market their sales and purchases to specific populations
in specific areas.
As a resource for all businesses in the food-supply chain, this
easy-to-use site can help a grocery store find farm-fresh eggs or
help a producer find a place to sell his locally-raised pork, said
Ray Hansen with Iowa State University (ISU) Extension’s Value
Added Agriculture Program.
While the Market Maker project originated through the University
of Illinois Extension’s Initiative for the Development of
Entrepreneurs in Agriculture program, it’s spreading regionally,
and project leaders hope it will become national. Currently there
is no fee to use Market Maker.
“This tool should continue to grow in value, especially as
other states are added,” said Hansen, who spoke at the Leopold
Center for Sustainable Agriculture’s recent Marketing and
Food Systems Initiative Workshop in Ames, Iowa. “It will provide
a powerful way to build business networks throughout the food chain.”
Site offers user-friendly options
The site’s census data can be queried and used in a variety
of ways. If you want to find new markets for a high-end product,
for example, you can search the database to generate a map of areas
with high-income densities. If your goal is to sell meat to Hispanic
consumers, you can request a map showing the greatest concentration
of upper-income Hispanic households, and then request a complete
demographic profile of those locations.
If you want to find out what businesses or distributors you can
supply in Iowa, Market Maker can also help you get a better sense
of their needs. “While this isn’t a replacement for
a thorough market analysis, it can help you find new opportunities
for your products and can make cold calls a lot easier when you
have a little background information,” Hansen said.
The site works equally well whether you’re a buyer or a producer,
he added. For example, you can request lists of federally-inspected
packing plants, along with a map that identifies their location.
If you’re a grocery store manager looking for the closest
producer of organic vegetables, you can query the web site to find
names and contact information. A key-word search function will be
added in the future, giving more user-friendly access for specific
That’s why it’s so important for farmers to provide
the details for their operations, said Hansen, who noted that nearly
300 Iowa producers have signed up in the last few months. “The
farmers’ data [set] is the one variable we can’t just
go out and get from census records or other sources.
“The producer data is what truly makes this tool unique,”
he noted. “We want more producers to sign up so we can promote
the site to grocery stores, restaurants and other food buyers.”
For more information on the Market Maker program, call 515-294-0588,
or e-mail email@example.com.
You can also log onto www.iavaap.org.
Finding new ways to partner with food distributors
Food distributors also offer a potentially viable—although
often overlooked—resource to connect local food producers
with consumers. They are a cornerstone of the conventional food
system in moving food toward its destination after processing. These
companies have safe, efficient systems (including refrigerated facilities)
for providing customers with small and large quantities of food
in a short time, said Connie Hardy, a program coordinator with Iowa
State University Extension’s Value Added Agriculture Program.
They also provide a sales force that can get your product recognized
by their customers that you couldn’t reach otherwise, such
as university food service outlets that use a complex buying process,
including contracts with food distributors.
“Most producers don’t have time to work directly with
institutional buyers, and vice versa, so that’s where distributors
come in,” Hardy explained. “A lot of producers don’t
really understand what food distributors do, even though distributors
could be a big help to them.”
To foster new connections between growers and food distributors,
Hardy and her colleagues recently interviewed 12 Midwest food service
distributors. The researchers wanted to find out whether these buyers
were accessing locally-grown foods and whether they planned to do
so in the future. The distributors included Sysco Corporation, Hawkeye
Foodservice Distribution, Harker’s Distribution and Martin
Bros.; five retail/grocery distributors including Wal-Mart and the
Midwest-based chains of HyVee, Dahl’s, Fareway, and Cub Foods;
and four Midwest convenience-store distributors including the Farner-Bocken
Company and Casey’s Inc.
The key message from distributors? “We wish producers would
ask us what we want to buy before they have the product ready to
sell,” they agreed. In fact, only two of the 21 distributors
interviewed by ISU’s staff said that producers involve them
in planning for the finished product.
That’s why you should talk to a distributor or two to help
target what to plant for certain markets, emphasized Hardy, who
noted that it’s not unusual for two distributors to have a
totally different mix of customers. Learn who your distributor’s
customers are, since their buyers could include college campuses,
medical institutions, hotels, restaurants, grocery stores, vending
machine suppliers or convenience stores. This will give you a better
understanding of end users’ needs.
“Heirloom tomatoes might be great for a white-tablecloth
restaurant, for example, but most college food service outlets have
no desire for these kinds of tomatoes,” Hardy noted.
Distributors seek food with a story
Food service companies stressed to ISU researchers that they know
their customers’ unique needs well and buy what their customers
want. Distributors also seek new and exciting products, foods with
a story, and a consistent, sufficient quantity. Since distributors
sell meats, poultry, fish, fresh or frozen fruits and vegetables,
dairy products, processed and preserved foods, specialty foods,
snacks and desserts, it helps to analyze whether your product can
be promoted as a “place-based” local food, an all-natural
product, organic, gourmet, or part of a freezer-to-table meal.
In addition, it helps to present an image of your product that
piques all the senses so it’s more appealing to both the distributor
and their customers, Hardy said. Create a good label design that
not only includes the required information but also highlights the
unique background of your product. If your salsas are made from
a special variety of tomatoes grown in a soil type unique to your
area, for example, promote this story on your label to showcase
why your locally-grown product is superior.
Even if you follow all these suggestions, however, be aware that
it still may be tough to crack the food-distribution market. In
some cases, distributors’ customers are currently receiving
volume discounts for purchasing certain foods and could lose these
discounts if they start buying more locally-grown foods, Hardy said.
It’s one of the reasons that ISU researchers are looking
at the need to aggregate food supplies locally, since most farmers
by themselves aren’t big enough to supply even one food distributors.
“Few farmers have large enough coolers, and I think we’re
going to have to look at ways of helping farmers process foods cooperatively,”
Hardy said. “We also need to look at ways to make this economically
Stabilizing local produce for year-round sales
Bridging this gap between local producers and consumers must address
concerns about year-round consistency of supply, added Sam Beattie
with ISU’s Department of Food Science and Human Nutrition.
“You can’t tell distributors and food service institutions,
‘We have boatloads of tomatoes for you, but only for about
“You can’t tell
distributors and food service institutions, ‘We have boatloads
of tomatoes for you, but only for about two weeks.’”
Since the peak of freshness is fleeting, adding a processing step
such as freezing would stabilize produce, protect food safety and
allow for year-round availability. This is the kind of product that
high-end restaurants would like to buy, Beattie noted. “Brett
Callison, a chef at Aunt Maude’s—a white tablecloth
restaurant in Ames, Iowa—has told us they’d like to
take as much fresh and frozen local products as they can get, but
they just can’t get the frozen.”
Offering convenience is a key to tapping more food service outlets.
“These buyers are looking for products in a form that’s
easy to prepare,” Hardy noted. “That means the food
needs to be clean, sliced, if appropriate, or frozen, in some cases.”
In the months ahead, ISU researchers will investigate a pilot unit
or prototype estimated at $300,000 that would include a blancher
and freezing units. They plan to study the economic viability of
having a processing system installed in a centralized location where
area farmers could process their fresh produce. Facilities that
were already set up for food handling, such as abandoned convenience
stores, and include features like a sloping floor with a drain that
can be steam cleaned could provide a workable solution, Hardy said.
ISU researchers will also conduct studies to determine buyers’
willingness to pay for year-round availability of locally-grown
produce. In addition, they plan to conduct surveys in conventional
and specialty grocery stores to study the types of canned and frozen
foods that are purchased. Researchers are also studying the feasibility
of high tunnels and other systems that can extend the produce growing
season to ensure an adequate supply of locally-grown foods.
Contracts expand marketing opportunities
Contracts could also help connect more local-foods growers and
food service outlets, since these agreements could alleviate buyers’
and sellers’ anxiety about unknown supply and demand levels.
“The food service buyers we’ve surveyed want to buy
and feature more local products, but they’re not going to
invest a lot of time to find these products,” noted Catherine
Strohbehn, an Extension specialist and adjunct associate professor
of Hotel, Restaurant, and Institution Management at ISU. “Contracts
could streamline communication between buyers and sellers to benefit
Volume sales to one location could eliminate the need for multiple
contracts and farmers market set-up and staffing time. Contracts
could address contingencies, such as situations where money has
been prepaid and a crop failure occurs.
Contracts may fit especially well with certain food service buyers,
such as independently-owned restaurants and some grocery store managers
who have fairly significant purchasing flexibility in terms of price
and delivery. “There’s a lot of competition, so these
businesses want to outshine others in their region,” Strohbehn
noted. “Contracts could give these buyers the potential to
contract specialty products or unique varieties from local growers.”
For more information on these topics, log onto www.leopold.iastate.edu/research/marketing_files/workshop06/index.htm.