Becoming Great: First Who, Then What

A few weeks ago, I started blogging about Good to Great. There, I wrote about the importance of the leadership that business owners/managers provide. So called "Level 5 Leadership" is critical, but a leader can't lead unless there's people to be led. So now let's take a look at what Collins has to say about the people you hire.

The research findings showed that the great companies first got the right people on board and the wrong people out before deciding on what they were going to do. They may have had a general notion of what direction they wanted to go, but the specifics needed to be determined by the people on board.

So, what makes someone the "right" or "wrong" person? First, they have a passion for the success of the business. This may lead to personal gain (i.e., higher income) for them but that is secondary to the drive they have to succeed. Second, they get along with others in the business. This is made easier if they share a passion for success, but moving forward with destructive friction is a killer. On the other hand, constructive friction, brought on while the team is trying to find the best step forward, can help the business move forward together. Third, they obviously need to have the proper technical knowledge, but it's more important that they have the ability to learn and adapt, applying that knowledge to various situations that come along.

The benefits of having the right people on the right spots in your business (even if there is only one or two spots) are huge! But it takes discipline to make it happen. Collins indicates that the great companies were rigorous about this. They would remove someone not in the right spot and, if they weren't the right person for any spot in the business, fire them. This is made easier if everyone puts the success of the business first. It is also easiest when that rigor is applied first to the ownership and then trickles down to the bottom levels of the organizational chart.

Collins gives three practical ways to apply this rigor in your business.

1. If there are doubts about a candidate, don't hire them. It starts first by keeping the wrong people out of the business. Don't settle just to fill a position.
2. When you know a personnel change needs to be made, do it. He says on page 56 "Letting the wrong people hang around is unfair to all of the right people."
3. Put your best people on the biggest opportunities, not the biggest problems. If possible, get rid of the problems but always take on the best opportunities with your best people.

Whether you are a dairy farmer, a food manufacturer, a CSA owner, or other type of food or agricultural entrepreneur, these fundamentals should be applied to your business. Your management team and employees are key elements of your business. Be sure they are the right people to move forward with in 2010 and following years as you move your business toward greatness.

Concentrating on existing customers instead of marketing towards new ones may be the key to increasing online sales

Every business wants to attract new customers, but are they losing sight of current customers?

A recent study by Verdict Consulting (a research company that provides analysis on a large variety of retail sectors, issues, geographies, and demographics) and Webloyalty (a company that offers a rewards and discounts program for over 450 online retailers) described actions online retailers should take to grow their business post-recession.

In the report (entitled "Internet Retail Trends 2010: Ten Actions For Your Business"), online sales have increased 13.3% in 2009. An increase is always great, but without a recession, sales were estimated to be $2 billion more. The report also states that in 2009, over 60% of shoppers will have used the internet to make purchases and will increase to an estimated 66% in 2012, but this is a much slower growth than the previous 5 years.

Neil Saunders of Verdict Consulting states that, "The recession has certainly caused online shoppers to alter their purchasing habits and online retailers are now also facing a severe slowdown in new customers. Our report suggests that retailers must turn their attention to driving repeat business — shifting marketing spend away from attracting new customers and instead focusing it on adding value for their existing customer base. Those retailers that try to win on price alone will be left behind but those that clearly offer extra value, and communicate it upfront to the customer will be ahead of the game.”

This shift from luring new customers to adding value for current customers will most likely change the web presence of many companies. Supermarketguru.com suggests , "Coupons, recipes, dietary advice and frequent shopper exclusives are all relevant to savings and health and could be effective at making a retailer website and stores compelling sources for how to live frugally and live well. Online games and family-oriented contests can entertain and build continuity. Each of these enhance the marquee retail brand."












As a business owner, how has your web presence changed during the recession (if at all)? Do you plan to change your online marketing techniques to engage existing customers? Do you feel that the recession has significantly influenced your online sales?

Another reason to use Twitter and Facebook

You may have been hearing a lot about Twitter (or tweeting) recently and how it can help you as a business owner talk about your business and hopefully gain customers. To be able to see tweets about a specific topic, a person would need to search on the Twitter website. A recent announcement from Google will help in this search for information.

In October, Google announced a search deal with Twitter to include tweets in search results. On the official Google blog, the benefits of the partnership are described. “Given this new type of information and its value to search, we are very excited to announce that we have reached an agreement with Twitter to include their updates in our search results. We believe that our search results and user experience will greatly benefit from the inclusion of this up-to-the-minute data, and we look forward to having a product that showcases how tweets can make search better in the coming months. That way, the next time you search for something that can be aided by a real-time observation, say, snow conditions at your favorite ski resort, you’ll find tweets from other users who are there and sharing the latest and greatest information.” After entering a search term, Google will scroll data in real-time (no need to refresh the page).

Coming in the beginning of 2010, Google will also be including Facebook updates in search results. The article below gives more information on the partnerships and includes a YouTube video on how the real-time data will be displayed.

Google article

As a business owner, do you use Facebook or Twitter? If you don't, will you start using these services now that Google will be displaying this data? What kind of feedback have you received from customers about your social networking usage?

Becoming Great: It Starts at The Top

Several of my colleagues and I are reading, or re-reading, "Good to Great" for a new book club here at work. (Our goal is to infuse our educational programs with the best ideas from the books chosen for the club.) This will be my third time through much of the book. It really is a fantastic read for any business owner. I plan to have a series of blog posts on my interpretation of how the fundamentals can be used in agricultural businesses. This time, I'll focus on leadership.

In their research of what made great companies different than good companies (as measured by stock market performance), Jim Collins and team discovered that the great companies had great leaders. They referred to these as "Level 5 Leaders." These can be charaterized as follows. (Read Chapter 1 for the full picture.)

• They have a mix of personal humility but strong will. They want the business to succeed above all else.
• They worry about the future, not just their own success. They position the business for long-term success and work closely with successors (heirs) to help them succeed.
• They are results focused, concerned most about the success of the firm.
• They share praise with everyone involved but look first at themselves when things go poorly.
• "Celebrity" leaders, those with big personalities and personal success, were found in good companies but not in great ones. This happened because these individuals tend to be more concerned about themselves than the firm's long-term success.

Think about yourself as a business owner, a community leader, a mother or father, etc. Are you, or can you be, a Level 5 Leader? Are you hiring Level 5 Leaders? Would you respond differently to a Level 5 Leader than you would one with a big personality but less substance? Employees, input suppliers, buyers, and others you deal with will feed off your unwavering passion for the firm.

The agricultural business owner that exhibits Level 5 Leadership sees the business's success as his or her personal success. This connection provides the business with a leg up because it has a champion at the top who has its best interest in mind. This is a necessary condition for sustained greatness. No matter what you may hear, it is very possible to become a better leader. The payoff could be huge!

Networking with industry members

There are many, many trade shows and conferences available for ag entrepreneurs to attend. But why should you go? These events can help you network with people in your industry, learn about new products and services (you always need to know what the competition is doing!), and you can advertise your own products to gain customers. Many conferences even offer workshops so that you can learn about new techniques and ideas from experienced industry people. Below are a few events that may be of interest to you.

-PASA (Pennsylvania Association for Sustainable Agriculture) will be holding its 19th annual Farming for the Future Conference on February 2-4, 2010 (http://www.pasafarming.org/). Location is to be announced soon. At the 2009 event, two keynote speakers were featured as well as 75 workshops pertaining to sustainable agriculture.

-The Mid-Atlantic Fruit and Vegetable Convention will be holding its 33rd convention in Hershey, PA on February 2-4, 2010 (http://www.mafvc.org/html/). This event combines educational workshops, a large industry trade show, and a diverse group of crop producers.

-From February 5-12, 2010 in Lancaster, PA, The North American Farmers' Direct Marketing Association will hold a conference to bring together farm direct marketers and agritourism operators to discuss farm business management practices (http://www.nafdma.com/Pennsylvania/).

-Also in February, the USDA will host the Ag Outlook Forum in Arlington, VA (http://www.usda.gov/oce/forum/) with session topics including nutrition, food price trends and farm income, food safety, commodities, energy, and food security.

-The International Restaurant and Foodservice Show of New York will be held February 28-March 2, 2010 in New York City to showcase the latest trends, strategies, and product innovations.

-For wine industry members, http://www.wine-expos.com/ lists wine events including the New York Wine Expo to be held February 26-28, 2010.

As an ag entrepreneur, have you ever attended a trade show or conference? What have you learned from the events? How do you determine what events will be the best for you to attend?

Coke machines go high tech

As a food business owner, what is your most technological piece of equipment? I’m betting it’s not the drink dispenser.

Coca-Cola is looking to change the soft drink industry. This summer, Coke started testing its new dispenser called the Freestyle in California, Georgia, and Utah. The dispensers resemble computer kiosks and blow regular fountains away. Each can pour over 100 varieties of soda, juice, tea, and flavored water. To offer that many flavors in such a small space, Coke has developed new syrups that are highly concentrated and only require a few drops to make an entire cup of beverage. Coke borrowed this technology (aka “microdosing”) from the medical industry. Microdosing is used to deliver a precise amount of anesthesia to surgery patients. Each syrup is loaded into a cartridge similar to an ink cartridge for a printer.

Not only does the Freestyle employ potent (and tiny) flavor cartridges, but it also houses some pretty technologically-advanced hardware. Each Freestyle has a dedicated IP range and contains a wireless internet card. This allows up-to-the-minute point-of-sale data to be sent directly back to Coke Headquarters. With this data, Coke can see what cartridges are low and need to be re-ordered and customer drink preferences depending on day, time, region, type of restaurant, etc. For example, one Freestyle test site has delivered data that consumption of Caffeine-free Diet Coke severely increases in the late afternoon showing that consumers are worried about drinking caffeine and sugar later in the day. With this information, the LCD screen on the Freestyle can showcase caffeine-free and sugar-free beverages during those hours. This could possibly entice customers who might just get tap water or not get a beverage at all.

The Freestyle can also be used to test new Coke products. In the past, Coke would bottle new beverages, send them to market, and hope for success. Now Coke can try new drinks in the Freestyle simply by sending recipes via the internet straight to the device. If the flavor is a hit, Coke could then consider bottling it.

YouTube video http://bit.ly/5s20X5

Freestyle article http://bit.ly/7dRcjo

As a food business owner, what do you think about the Freestyle? Do you think this will help you with ordering, inventory, and availability of different drink choices? As a consumer, are you excited to test the Freestyle or is it too high tech?

Making this holiday season a happy one for your customers

With the recession still in full swing, customers may not be in the best of moods this holiday season. Budgets are tighter but gifts still need to be purchased. As an agricultural product retailer, how can you drive customers to your business?

Coupons are king this holiday season. In the Benchmark Survey on Consumer Coupon Behavior, 30% of consumers said the would choose a retailer that offered coupons and 20% said they would leave one store and go to another if they offered coupons. To inform customers about your coupons, get blogging! Write about your deals in your own blog and then send info to coupon sites, people who tweet about deals on Twitter, and other deal bloggers. Don't forget about search engine optimization (SEO) or pay per click ads (PPC) when you are adding content to your website. Include info about the holidays in your blog entries and articles and use holiday keywords.

One type of coupon/discount is to offer free shipping. Shipping may be costly, but a recent study by Shop.org reported, "Of those intending to run free shipping offers almost 80 percent will make them conditional, which usually means a customer must purchase a specific item or spend a set dollar amount to qualify.” By offering free shipping (even if it is conditional), customers may perceive this as a discount.

People want to give back to those in need this holiday season, but might find it hard to do so with limited income. You can help customers provide for the needy when they are purchasing your goods. For example, with every $50 or more purchase from Oregon Growers and Shippers (www.oregongrowers.com), they will donate a jar of their marionberry jam to the Oregon Food Bank. Also to drive customers to their site, Oregon Growers and Shippers is sending recipes that use Oregon products to bloggers.

Holiday article
http://www.openforum.com/idea-hub/topics/money/article/how-to-avoid-the-bah-humbug-spirit-from-consumers-this-holiday-season-janet-thaeler

As an ag entrepreneur, what are you doing to drive customers to your business this holiday season? Have you already or do you plan to employ any of the tactics I mentioned above?

Smart Choices program put on hold

Around this time last year, I wrote about the introduction of the Smart Choices program. The program was designed by The Keystone Center, a non-profit organization specializing in creating solutions for public health problems. The intent of the program was to create a voluntary front-of-package symbol that identifies more nutritious choices within specific product categories. Some of the major proponents of the labeling system include Coca-Cola, ConAgra, General Mills, Kelloggs, Kraft, Pepsi, Unilever, and Walmart.

Sounds like a good program, right? So why has the program been suspended? Since it's kickoff, Smart Choices has taken a lot of heat for what it considers "nutritious". Critics are concerned that the Smart Choices guidelines are too lenient and are marketing processed foods as nutritious. Some of the products that contain the Smart Choices logo include foods high in sugar, such as Froot Loops cereal and Cracker Jack.

On October 20, 2009, the FDA communicated plans to reassess front-of-package labels and how consumers are interpreting these labels. Quickly after the FDA's announcement, The Keystone Center put a hold on the Smart Choices program. Mike Hughes, Chair of the Smart Choices program and VP for science and public policy at The Keystone Center says, "Our nutrition criteria are based on sound, consensus science. But with the F.D.A.’s announcement this week that they will be addressing both front-of-package and on-shelf systems, and that uniform criteria may follow, it is more appropriate to postpone active operations and channel our information and learnings to the agency to support their initiative."

Smart Choices article
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=116056

As a consumer, how do you feel about the Smart Choices program? Do you think it is based on sound nutrition guidelines? Are you hoping for more regulated labeling?

As a producer, are you looking for a front-of-package label to put on your nutrtious product? Should this label(s) be designed voluntarily by groups such as The Keystone Center or should it be federally overseen by the FDA or other government agency?

Bait-and-switch at a restaurant near you

Restaurants (and most businesses) are struggling in the current economy, so promotions seem to be running high to get people in the door. But can these promotions actually keep a customer from coming back?

Recently, my husband and I went to a chain restaurant because they were advertising $5 burgers or chicken sandwiches. It seemed like a pretty good deal seeing as the regular price was around $8-10. I ordered a Coke and my husband ordered a beer. When the check came, I was very surprised. The sandwiches were $5 each, but my Coke was $2.80 and the beer was $2. A Coke costing more than a beer? Obviously, I felt ripped off. I've never had a soft drink cost more than 50% of the entree price!

Things like this seem to be happening all too frequently. In a recent casual dining study by Intellaprice (a market analysis company), side dish prices are up 8%, desserts 7%, and bar beverages 2%.

casual dining article http://www.supermarketguru.com/index.cfm/go/sg.viewArticle/articleId/806

As a customer, are these bait-and-switch tactics leaving a bad taste in your mouth? As a restaurant owner, have you raised your prices on "extras"? How do you keep customers coming back after promotions?

Use IT to Market Effectively

Times are tough. Money is tight and business owners are having to make difficult decisions. Cutting back on marketing can appear to be an easy and quick way to decrease expenses. However, it's during a recession that it becomes ever more important to maintain and grow your business. You want to be in a position to take advantage of recovery when it comes, rather than playing catch up.

I came across this article today on the importance of marketing in recovering from this economic recession. (Ok, I'll admit it, the article was sent to me by my sister since her husband was interviewed for it). In any case, the article contains some excellent tips for using technology to effectively market and grow your business in our current economy. The tips offered are just as important when times are good. And while the examples are not related to agriculture, it's the principle behind them that should be focused on.

As a farmer or ag business owner, do you see ways to use the tips offered to improve the effectiveness of your marketing? We'd like to hear from anyone with examples to share.

"Marketing Important in Recovery"

Can convenience stores extend the shelf life of fresh fruit?

When purchasing a snack at a convenience store, more and more customers are looking for a healthy option. Many convenience stores are starting to sell fruits and veggies, but are facing problems with the very short shelf life. For a store like 7-Eleven (which is estimated to sell 27 million bananas this year), this is a major problem.

7-Eleven has partnered with Fresh Del Monte to create a plastic wrap that slows respiration by keeping most oxygen and moisture out. By wrapping a green banana in this wrap, a banana will stay firm for about 5 days as compared to an unwrapped banana which has a shelf life of only 2 days. 7-Eleven will be testing these wrapped bananas in 27 Dallas-area stores. If the test goes well, the chain expects the wrap to be used in most of its stores by early 2010.

banana wrap article

As an ag entrepreneur, would you use this wrap on your fresh produce? Do you think that this wrap will help you sell more produce and allow you to sell in new venues (like convenience stores, gas stations, rest stops, etc)? As a consumer, would you buy produce wrapped in plastic?

What does 'natural' mean?

The USDA has recently announced that it is working on a definition for the terms 'natural' and 'naturally raised'. Currently, these terms are used voluntarily. As you can imagine, this has led to a lot of confusion and misleading claims. To determine a definition, the USDA is looking to mesh the current definitions of the Food Safety and Inspections Service (FSIS) and the Agricultural Marketing Service (AMS).

The FSIS allows meat and poultry products to use a 'natural' label "provided that the product does not contain any artificial flavor or flavoring, coloring ingredients, chemical preservative, or any other artificial or synthetic ingredient and that the product is not more than ‘minimally processed.’” Minimally processed is then further defined to include “traditional processes used to make food edible or to preserve it or to make it safe for human consumption e.g., smoking, roasting, freezing, drying, and fermenting, or those physical processed which do not fundamentally alter the raw product and/or which only separate a whole, intact food into component parts, e.g., grinding meat, separating eggs… and pressing fruits to produce juices...all products claiming to be natural or a natural food should be accompanied by a brief statement which explains what is meant by the term natural…”

The AMS allows products to be labeled as 'naturally raised' if the meat comes from "animals that have been raised entirely without growth promotants, antibiotics [small exception], and have never been fed animal by-products…and aquatic by-products.”

These two statements aren't that helpful because of the room for loop holes. The USDA hasn't yet announced a final definition, but hopefully it is more clear than the statements given by the FSIS and the AMS.

USDA to define natural article

As an ag entrepreneur, do you advertise any of your products as 'natural'? Do you think a clear definition from the USDA will help or hurt you? As a consumer, do you find more value (and trust) in a USDA definition?

The customer is NOT always right

Being a business owner has many ups and downs. A "down" may be a difficult customer that requires more attention than others. But is it OK to "fire" a customer?

John Chisholm, a writer for a customer relationship management website (CustomerThink.com), has some guidelines as to when a customer should be "let go". You should "fire" a customer when "the tangible and intangible costs of serving the customer outweigh the cash and any good will received from the customer.”

How do you, the business owner, "fire" a customer? Tracy Fredrychowski, a writer for a search engine optimization website (www.searchengineacademysc.com), has developed a how-to guide on axing a customer.

1. Be professional. “Customers should always be spoken to personally, not by letter or phone. Only when the customer is at a distance, is it appropriate to speak with them about the matter on the telephone. But in no circumstances should the contact be other than verbal. E-mails simply will not do in this case.”

2. Keep emotions out of it. Odds are the customer made you extremely frustrated or angry, but now is not the time to vent. Customers often will take being fired personally, “so it is important that you explain your reasons rationally and clearly.”

3. Offer suggestions. Remember after you have fired them, customers will still need someone to provide the product or perform the service you did. Help them if you can.

4. “Stay polite but firm. It is time to move on.”

Firing a customer article

As a business owner, how have you dealt with difficult customers? Have you ever given a customer "the boot"? Do you have any other suggestions on ending the relationship amicably?

Understanding Disagreement on Local Foods

Yesterday, I saw a bit of activity on Twitter about the brand spankin' new farmers' market located a block away from the White House. Some tweets had photos or URLs attached. (As two examples of online reports, see http://bit.ly/TWhWI and http://bit.ly/oowWZ.) The tweets generated some particularly negative responses from farmers that I follow. I'm trying to understand some of the issues. Below, I've thrown out some of my thoughts. However, I'd really like to hear from others on this. Those of you with more of a stake in the game would be great to hear from.


I saw one exchange in which one individual blasted the prices at the WH FM, saying that they reinforced negative stereotypes of local foods being for the "elite." One example cited was $11/lb pork chops. (I saw little discussion of quality-related issues.) Based on this, I wonder what prices the critics would say is fair. Is the $2.49 pork chops advertised in my local grocery store's circular too little? How about double or triple that number? It seems to me that a fair price is whatever the farmer selling it can get for the product. Who among that group wouldn't love to get $11.00? One of the sources listed above indicates that little product was moving. If true, seems like the items were indeed overpriced. In a competitive market, as this one's in, consumers, not bloggers and reporters, get to decide what is overpriced and what isn't.


I also don't understand the notion of this one market giving all others a black eye. This one has something that all others don't have... proximity to the White House. The story embodied in that fact has value to some target consumers. In addition, there's only one opening day. Some customers will tell the story for years about how they bought ag products on the opening day of the White House farmers' market. What's the value of that story? We won't know until Day 2. But this market is unique and has received so much publicity that it seems obvious to me that vendors are going to try to capitalize on that fact. Consumers also seem to understand that products cost more in some areas than in others. I suspect most won't hold it against vendors in other markets.


The other factor is that they aren't selling to the "everyperson" in this venue. Chefs from upscale restaurants nearby will buy products from this market if it's competitive. There's also a lot of people with a lot of money working in those big buildings in DC. Average income is probably higher than most other farmers' market locations. It's no surprise that prices are higher given that fact alone. So, more money is added to the price beyond what might be seen at a "typical" market.


Finally, is the notion that some hold of local foods being only for the "elite" an accurate one? In a June 24, 2009 post, I wrote about the need for a balanced approach to local foods if it is going to become more mainstream. To become mainstream, it's got to be able to compete on price, quality, and convenience with WalMart and other major food retailers. That's a tough battle if local food sellers want to reach the masses. But is there any other way to make it happen?

Response Questions

1. How should we determine "fair" prices for direct marketers?

2. Does the uniqueness of the setting have value separate from the products being sold?

3. Are local foods for the elite/wealthy? If so, can that be changed?

Some budget cuts can do more bad than good

In a recession, businesses of all types are fighting to stay afloat by reducing overhead costs, but what cuts are actually harming your business?

Many businesses reduce costs by cutting marketing and laying off employees. Is this the answer? The article "Basic Mistakes Retailers Make When Times are Tough" by Elizabeth Walker (seen on www.openforum.com) describes how a furniture store in Canada (The Brick) dealt with tough economic times.

To "save" money, The Brick severely reduced advertising and laid off hundreds of employees. Less customers visited the store and the ones that did stop in couldn't find an employee to ring up their purchase. Revenues dropped even lower until their new CEO, Bill Gregson, led the company in the right direction.

Gregson felt that very little of the company's problems were actually a result of the recession. He decided to hire back the employees, advertise more, and developed an agreement with the manufacturer to hold inventory instead of Brick warehouses to help prevent excess inventory sitting around. For the month of August, sales were up.

This is not to say that these practices will absolutely save you during a recession. As the author states, "We are saying that it's easy to 'cut off your nose in spite of your face' when you cut the very services that bring business in the door. Bottom line is: when the economy is bad is the time to increase your marketing and upgrade your service. Do so and you'll be way ahead when the good times are back."

Budget cuts article

Exploring Your Small Farm Dream

If you have thought seriously about turning a profit off of a few acres or already have a small agricultural operation and would like to change strategies then Exploring Your Small Farm Dream can help. This course, offered by several Penn State Cooperative Extension Offices in the Southeast Region, is designed to help guide beginning farmers through the initial exploratory decision making process and bridge the gap between ideas and action. Whether your vision includes making goat cheese, selling cut flowers, or growing rare tomato varieties, this course will give you the tools to start making that dream come true.

Participants will discuss current opportunities in small-scale agriculture, explore objectives, assess personal and financial resources, conduct preliminary market research, and develop an action plan for pursuing their interests in food and farming. This interactive course will include creative exercises, research, and class discussions that will allow you to accurately assess your skills and resources. Interviews with local agricultural business owners will also be included to give you firsthand knowledge on what to expect when starting your business. For information about course availability in your area, please refer to the course website: www.pasmallfarmdream.info

Healthier kids' meals

In the recession, most businesses are suffering, especially restaurants. To entice customers, some restaurants are offering family deals by advertising free kids’ meals. Is the free kids’ meal really the draw for a family? The article “Could Healthier Kids’ Menus be Stronger Family Draws” by www.supermarketguru.com explains why the content of the kids’ meal as compared to the price is what brings families into the restaurant.

Remembering my days as I child, it seems that most kids’ menus haven’t changed much (chicken fingers, mac & cheese, grilled cheese, etc). Why are these same few meals the standard for kids? Mintel Menu Insights (a data collection agency with data from 350 of the largest US chain restaurants and 150 independent restaurants) reports that 77% of children are willing to order meals include vegetables and 86% would order meals that include fruit. Mintel also reports that only 30% of parents think their children eat healthfully in restaurants. “Our research shows parents want more nutritious options for their kids, and children are open to fruits, veggies and healthier versions of standard fare. The generic kids’ menu really doesn’t meet the needs and desires of today’s families,” says Maria Caranfa, a registered dietitian and director of Mintel Menu Insights.

Healthier kids’ meals article

As a restauranteur, do you think adding healthier kids’ meals will bring more families into your restaurant (and subsequently increasing sales)?

Managing in Tough Times Begins in Good Times

At Ag Progress Days, I had a discussion with a colleague about the state of the dairy industry. Most readers know that many (or maybe all) dairy farmers are operating at losses right now because of very low milk prices. It really is a horrible situation for farm businesses and families in Pennsylvania and beyond. I can't take anything away from that at all! Careers and family well-being are absolutely on the line! A sad situation, as many in ag or other industries have faced over the past several months.


In the dairy industry, this historic low comes on the heels of a period of high milk prices. My colleague and I argued that it was during that period that dairy owners should have been preparing for now. (Although I use the dairy industry as an example, the principles apply to all businesses.) Being flush with cash, as many were, allows the owner to do some critical things for success in a commodity business.


1. Save your money - There's nothing like cash reserves to help an owner get through unprofitable periods. Although it might not have been advised at the time, some investments would have netted big gains over the past few months. Major stock indexes, for example, are up around 50% since spring.

2. Pay down debt - This isn't quite as good as having cash reserves, but the farmer may be in a position to tap into farm equity in the form of loans. While it may seem contradictory to pay down debt so that you have access to more if needed, that option may not have been available had past debt not been paid down.

3. Invest in cost-cutting production technologies - In all businesses, but particularly in commodities, profitability follows efficient production. If you can't control your price, you have to control your production costs. If you can lower that through technology, then invest after a very careful analysis.

4. Go out on top - For most folks, it's never easy to exit a business or industry that they love; one that's in their blood. But all should have a long-term plan that includes eventual exit. The best time to exit is when there aren't liquidity concerns, when solvency isn't an issue, and when profitability is positive and high. For most in the dairy world, that doesn't describe the current environment. Exiting at the bottom leaves little or no cash left over to start the next phase of one's career.

We in Extension have resources and expertise to bring to bear on owners and managers during these rough times. Despite our best efforts, and the efforts of many legislators, industry players (including lenders), and others, some have exited and others will exit during this period. For few will it be on their own terms. Those still standing after this downturn really need to take time to establish a plan that incorporates one or more of the strategies highlighted above, or others that will position the operation for the next downturn. Getting help then, from Extension, a consultant, or other source, will be more beneficial than anything we or others can provide at this time. Much of Extension exists because these businesses exist. We need them to be healthy and growing.

How have you (or farms that you're working with) weathered the storm? How did you prepare for this? What do you think Extension could do now and in better times to help?

Lessons learned from Ag Progress Days

On Thursday, I visited Ag Progress Days for the first time ever. It was an amazing combination of all things agriculture. Most of the vendors had well-designed displays. Unfortunately, a few displays were just not helpful. If you saw Jeff's tweets from APD last week, you may have read about some vendors reading books at their displays and not looking very welcoming to potential customers.

Besides the reading vendors, I think the most lackluster display can be seen above (I waited until someone stood in front of the table to protect the identity of the vendor). As you can see, the "display" consists of banner with the business's name, an employee sitting at the table (behind the standing man), and a few brochures. As a potenial customer, what would bring me to this booth? The banner doesn't even give an idea what kind of business it is.

When setting up a vendor booth, remember that you are there to attract customers. With hundreds of other vendors at Ag Progress Days, attendees have a lot to see. Your display should sell your business without you even having to say a word. In an article by Startup Nation, a website developed to give how-to advice to entrepreneurs, they give tips on creating a vendor booth.

Tip 1: Spend serious time planning. "Create specialized, eye-catching marketing materials...The idea is to get attendees to stop. Think of your marketing materials as 'bait for fishing in the aisles.'"

Tip 2: Put your signage in sharp focus. "Make your booth signage as focused as your overall trade-show approach. Your backdrop should be simple and concise – five or six words to tell your story; something that people cruising by will get quickly. Also, design two-sided business cards for the event. Include contact info and a photo on one side, with a list of benefits in working with you on the other."

Tip 3: Choose your floor location carefully. "Where you park yourself is key...A corner, an island, a peninsula is the most ideal situation because of traffic flow and visibility. And don’t sit. Sitting behind an exhibit booth sends the message that you’re not interested or aggressive. People will just keep on walking."

Startup Nation article

As an ag entrepreneur, have you participated in any fairs or shows? Have you developed a strategy for your display? Do you have any other advice for potential vendors?

Being prepared for economic change

In this economy, restaurants are really hurting for sales as customers cut back on luxuries like dining out. It seems like restaurants are scrambling to get people in the door by offering coupons and "limited time offer" pricing. But what if a restaurant had a game plan BEFORE a slower economy (or a rising one)?

Quizno's is doing just that. At the company's annual meeting on August 10, the Flex Plan was unveiled. Food Business News reports that the Flex Plan is "a product development strategy that quickly responds to changing economic conditions...Flex Plan allows for the development of many different products, varying based on price point and balacing consumer taste with product cost." For example, Quizno's recently introduced the $4 Toasty Torpedo and the $3 Toasty Bullet. These new lower cost subs were created to protect franchisee margins while still providing an affordable option for consumers. When the economy is doing well, the Flex Plan allows for development of more indulgent products like premium, double-meat subs.

Rick Schaden, CEO of Quizno's, has said, "This economy presents unique challenges, particularly as consumer confidence ebbs and flows. We knew there was a better way to address the changes that came with this economy. By preparing for eventualities, we're taking the gueswork and delay out of product innovation and allowing for an immediate response to customer feedback. It's better for our customers and it's better for our franchise owners."

Quizno's article

As an entrepreneur, have you developed a plan for economic changes? What do you think of the Quizno's Flex Plan? After reading about the Flex Plan (and experiencing today's slow economy), will you develop a plan for the future?

The Power of Choice

As consumers we all feel empowered by choice. And when it comes to food, options are never a bad thing, at least in my opinion. For a grower involved in retail fruit and vegetable marketing one way to empower the consumer is by doing a pick-your-own operation, through which customers walk around your orchard and are able to pick out what they want. The idea of pick-your-own has been around for many years and some agricultural businesses have been pretty successful with it. However, the liabilities that come with letting people roam around your farm can prove to be too costly for many growers. But, there are many simpler ways that you can empower your customers. One of these easy little techniques was brought to my attention this past Saturday at the Gettysburg Farmers' Market.

While I was strolling around the market I came across a booth that had many different varieties of cherry tomatoes in several different colors and sizes. As I was trying to decide what variety to buy, the woman behind the counter said “here, just make up your own pint”. So, I grabbed the empty pint and got to work choosing my tomatoes. Something as simple as that actually made my purchasing experience much more fun. I walked away a satisfied customer with the exact combination of tomatoes that I wanted; a few smaller ones, a few oranges ones, a few white ones, etc. Though doing something like this may seem like common sense to many of you; don’t underestimate the power of choice when it comes to any aspect of marketing. Take some time to think about whether there is an item at your market that you could make more customizable for your customers.


Photo courtesy of Farm to Chef Gettysburg

Standing out from the crowd

Recently, Smart Money magazine interviewed Jeremy Cowan, founder of Schmaltz Brewing Co., a niche craft brewery in San Francisco. In his interview, Cowan stressed how important it is to stand out from the crowd. As a small business owner, it can be very hard to gain customers with the "big guys" having an established market share. Shmaltz Brewing Co. has "learned to aim for the fringes and explore the counter-intuitive." Some of the company's brews include very interesting themes like "Chosen", a Hebraic-themed beer, and are introducing circus sideshow-inspired lagers. Cowan also says, "Although we lack the budgets of giant beer companies, we bring attention to our products through unique branding and promotions. For example, for the past two years, we've hosted 'Freaktoberfest,' a boutique beer and music festival in Brooklyn, N.Y. That and other promotional events have helped us attract a loyal following."

Another piece of entrepreneurial advice Cowan gives is to seek out professionals if you are not capable in a certain business area. "I like to be creative, which helps in running a business. However, I generally have a tough time with numbers, margins, and negotiations. To make up for my failings, I tapped a business consultant friend, who helped me craft a budget based on my company's sales, expenses, and profits...In time, I hired a professional bookkeeper and small business accountant to keep the company's financials on track and on budget," he states.

At the conclusion of his interview, Cowan was asked to give the best piece of business advice that he could offer. "You do not need to spend money to make money. You'd be better served if you learned to starve, struggle, save and sell. That way, you can achieve your vision based on quality, sincerity, creativity and hustle," he proclaims.

Cowan interview article

As an entrepreneur, what do you do to stand out from the "big guys"? Have you or do you plan to seek out professional help with matters you are not great in? How do you feel about Cowan's piece of advice? Do you agree or disagree?

"I Hope We're Slow Today": Back to Basics on Customer Relations

This morning, my wife asked me to run an errand to get milk. I was already a little late for the office so wasn't thrilled to be doing this, but the kids need milk as part of a balanced breakfast, so I did it. I went to a nice convenience store near my house, where I normally have great (or at least mediocre) experiences in shopping. On this particular occasion, though, I went to the counter where 'my' cashier doesn't greet me, but instead remains engaged in the discussion with her colleague about the weather, which was cold and rainy. The next thing she says is, "I hope we're slow today." Although not exactly what she said, what I heard was "I hope we don't get many people like this guy in here today."

Maybe it was because I was running late and wasn't in the best of moods, but this really bothered me. Not only did it bother me, it offended me. It really irritates me as a customer not to be greeted and thanked, but I've learned to live with that. But to be told, even in an indirect way, that I was bothering the cashier by giving her company my business, was a little more than I expected. While I'm not prepared to take my last-minute milk purchases elsewhere, it negatively affected my view of the store.

I responded in EXACTLY the way we teach clients that customers will respond if they have a similar experience at the client's store. It pays to spend time with cashiers and everyone else who will represent your operation to the customer. A pleasant smile, a helpful attitude, and a thank you provide a positive impression immediately. We teach a lot of advanced marketing topics, but the basics form the foundation for lasting customer relationships. Don't let your business suffer because of an employee's misstep. Train them, evaluate them, and positively reinforce exemplary behavior. On the flip-side, correct problems immediately. Your customer might not let it slide. You've heard it before; It's much cheaper to retain customers than it is to recruit new ones!

Fancy Food Show part 3

Continuing the Fancy Food Show blog mini-series, more observations I made at the show included marketing to food service, production products, as well as non-food/non-human food products.

Vendors at the show did not limit themselves to selling products for retail sales, rather many vendors were marketing products for food service. Don’s Salads (www.donssalads.com) produces salads, gourmet cream cheese spreads, soups, and desserts which are then sold to distributors for restaurant and institutional use. Another restaurant/institutional sales product seen at the show was Fatboy’s Outrageous Cookie Dough (www.outrageouscookiedough.com). Fatboy’s delivers cookie dough in pre-portioned pieces to maximize ease in baking and consistency.

Vendors were also promoting products to help agricultural businesses become more consistent, efficient, and customized. Met Speed Label (www.metspeedlabel.com) has developed label printers that allow companies to work with a designer to create professional looking labels which can then be printed in-house. Roxispice (www.roxispice.com) and Cookal (www.brunowhitefoods.com) showcased products to customize restaurant food and drinks. Roxispice is a drinkware rimming system that allows the bartender to rim glasses in colored spices. Cookal is a carmelization kit used to create a caramelized look for desserts like crème brulee.

One major area of agriculture that consumers frequently overlook is non-food/non-human food products. Envirosax (www.envirosax.com) markets reusable bags made from hemp, bamboo, linen, and organic cotton. Big Bark Bakery (www.bigbarkbakery.com) bakes designer dog and cat treats. Their treats are preservative, sugar, and salt free.

As an ag entrepreneur, do you market to food service providers? Do you use or produce products or services that help customers make a final product (like Roxispice or Cookal)? Have you considered making a non-food or non-human food agricultural product like bags or dog treats?

Fancy Food Show part 2

As promised, I am continuing my blog mini-series on the Fancy Food Show. The event was a great experience and could definitely help entrepreneurs. Not only are contacts made during the three-day event between industry members, but producers can generate new food product ideas while retailers can determine what products complement what they already offer.

Another popular trend was portioning/individual servings. Both Party Partners (www.choc-o-lait.com) and Edelman & Paulig (http://www.edelmann-paulig.com/) have developed “hot chocolate on a stick.””Hot chocolate on a stick” consists of a 1-inch cube of chocolate attached to the end of a wooden stick, like a lollipop. To enjoy this treat, the customer merely has to dip the stick into a hot cup of milk and stir for a minute. The chocolate melts and combines with the milk to make hot chocolate. L.T. Blender’s Frozen Concoctions (www.ltblender.com) packages margarita, daiquiri, mojito, and other frozen drinks in portable, pourable bags. L.T. Blender designed its packages to allow customers to have frozen drinks without the blender. To prepare and serve, liquor and water are poured into the bag, shaken together, placed in the freezer for a few hours, and then the frozen drink can be squeezed into a glass and enjoyed. The bags come in different sizes depending on the number of servings needed. The Great San Saba River Pecan Company (http://www.greatpecans.com/) has also developed a quick and easy “semi-homemade” type product. They have designed a pecan pie in-a-jar. To make their own pecan pie, a customer just needs to add eggs and butter to the mix and pour into a pie crust. Another portioned treat seen at the show were Lollibons. Developed by Philip R’s Frozen Desserts (http://www.icecream-desserts.com/), Lollibons are ice cream bonbons served on a stick for a small, convenient snack.

Another trend seen at the Fancy Food Show was an emphasis on “healthy” foods. Loaded Smoothies (http://www.loadedsmoothies.co.za/) are individually packaged and made only with fruit and water, contain zero preservatives, zero stabilizers, zero colorings, and are sugar-free. Another health-conscious fruit product seen at the show was Tropicube. Tropicube (http://www.tropicube.co.za/) is a dried fruit product that is preservative, fat, gluten, and nut free. La Vita Health Foods (http://www.lavitahealthfoods.com/) was also promoting health-conscious products. La Vita sells eight flavors of cookies that are gluten, wheat, sugar, lactose, cholesterol, and trans fat free. The cookies are also prebiotic, vegan, and diabetic friendly.

As an ag entrepreneur, do you currently use any of the above trends (portioning/individual servings and/or health-conscious)? If you do, is this a recent implementation to your product line or have you been doing this for a long time? If you don’t, are you considering these trends?

Fancy Food Show part 1

In June, some of the Ag Entrepreneurship team members (including myself)visited New York City for the Fancy Food Show. The Fancy Food Show provided many new marketing avenues for industry members. In today's post (and the next few), I am going to discuss what I saw at the show and how I think my observations could help entrepreneurs change their marketing techniques or at least update some of the strategies they are using currently. Some of these new ideas include different packaging, flavors, sizes/portions, health conscious, non-edible agricultural products, and restaurant/ wholesale distribution.

Packaging and product design are important parts of product delivery. No matter how great a product may be, a customer may overlook it if the packaging and/or design of the product isn’t eye-catching. For example, JF & B Co (http://www.jfnb.co.kr/) produces frozen chocolates and cakes with beautiful gold overlay, bold colors, and interesting shapes including leaves, roses, hearts, moose, and four leaf clovers. JF & B Co also offers decorations made of chocolate with custom designs or logos. Azienda Agricola Fejoia (www.fejoia.it) is a wine maker in Bergamo, Italy who sells their wine in slightly different-than-average bottles. Azienda bottles their wine in tall, thin bottles. Sitting next to an average wine bottle, the Azienda bottles seem sleeker and catch the eye. Another interesting package is that of Sence Nectar (http://www.sencenectar.com/). Sence is a rose nectar beverage bottled in a clear, textured, cone-shaped bottle with a metal lid. The light pink color of the liquid shines nicely through the bottle creating an almost stained glass appearance.

Not only is Sence Nectar bottled in an eye-catching container, but is also a unique flavor. Sence is made from the extract of the Kazanlak Rose found in Bulgaria. It can be used as a mixer with spirits or served separately as an alternative to juices and soft drinks. Also popular at the Fancy Food Show were honeys. Two companies stood out in the honey market. Both Crystal’s Honeys (http://mvabeepunchers.com/honey/crystals_honey.php) and The Bee Cave Honey Company (http://www.beebutter.com/) have infused flavors and textures into their honey. Crystal’s Honeys offers flavors like wild blueberry, orange blossom, cranberry, and western clover as well as textures like chunky honey. The Bee Cave Honey Company specializes in whipped honey. They take raw honey and whip it until it is smooth and creamy and then add flavors like cinnamon, strawberry, and lemon.

As an entrepreneur, what kind of packaging are you using? Do you think it stands out from competitors? Have you tried to integrate new flavors and/or textures into your products?

Penn State Extension and Agricultural Entrepreneurship

There has long been debate about whether entrepreneurship can be taught. I often tell folks that being an entrepreneur is like being an artist. Anyone can draw a portrait of a landscape, say, but some people will be better able to convey colors, shadows, perspective, distance, etc. Likewise, anyone can operate a business or undertake new ventures, but some will be more successful because they have a skill set that enables them to manage and lead better than others can.

Just as you might learn elements of art in a basic course, it is wholly possible to learn elements of entrepreneurship. Management skills such as business planning, marketing, financial management, etc. are all taught in universities around the world. Entrepreneurs put these pieces together to take advantage of opportunities to create new ventures or make existing ones better.

Penn State Extension offers training for agricultural entrepreneurs.

• "Income Opportunities in Agriculture" is a one-day workshop that provides opportunities to learn from other entrepreneurs about their ventures.
• "Food for Profit," usually offered in one day, provides important management information for those interested in small-scale food business. Participants learn about business management as well as food safety practices, etc.
• "Annie's Project" is multi-session course targeted to women farmers. It provides training on managing farm risks in a way that best suits the unique learning styles of women.
• "Exploring Your Small Farm Dream" is a multi-session course targeted at people who have a few acres and who are thinking about a farm venture.
• "Your Future in Focus" is a multi-session course designed to walk participants through a business planning process. At the end, participants will have learned about the many facets of farm business management and should also have a draft of a written business plan.

In addition to these curriculum-based educational activities, we also offer many workshops and courses on topics including financial management, farm succession planning, marketing, etc. Our goal is to provide training on the management skills needed to be a successful entrepreneur. As with artists, some will combine those skills more successfully than others. However, without these skills, the business owner is at a competitive disadvantage and is likely to fail in their venture.

As Extension State Program Leader for Entrepreneurship and Value-Added Ag, I am really proud of the depth of programming we have to offer. Even with this, we are working hard to improve our programs to meet the needs more effectively. I'll keep you in the loop as we move forward. If you have any questions about our programs, contact me at jeffhyde@psu.edu.

What are people saying about your business online?

If someone was talking about you (positively or negatively), you would want to know about it, right? If someone was speaking your praises, you would want to thank them. Conversely, if someone was speaking poorly about you, you would want to set the record straight. The same is true for your business. But today, someone can just as easily talk about your business face-to-face as they can post to a blog, YouTube, Twitter, Facebook, etc.

Your business's reputation is just as important in brick-and-mortar as it is online. Customers are not just going to your website to get information about your business. You must also manage your web presence for postings from people outside your organization. The internet is a place where anyone (fan or critic) can express their opinions about anyone and anything. Don't be oblivious (or vulnerable) to rumors, complaints, review sites, blogs, etc.

In a BusinessWeek article, Tom Kurz, co-founder of The Escapist, a video gaming site, explains what his company does to monitor their online reputation. With technology (especially social media) changing frequently, small businesses are feeling overwhelmed by trying to manage their web presence. Kurz warns, "If you don't control the message, somebody else does...For a small company with $1 million in sales, when a rumor flies about their product or service, it could sink their entire business."

Seems pretty scary, doesn't it? There are many free tools to help you manage your online reputation. Google Alerts, Google News, Yahoo Alerts, Technorati.com, BlogPulse.com, BoardTracker.com, Keotag.com, and BuzzLogic.com monitor blogs, forums, social networking sites, and/or news for your business's name (or any other search term). If you find posts about your business, you need to respond to it immediately. Kurz explains, "What we want to know is if people are talking positively about us, so we can link to it. If they're talking negatively, we want to address the issue right away...Oh, we've had to do some major damage control. I can't tell you how many times someone will post something and blame us for something we had nothing to do with. If we get there pretty quickly, we can address a negative comment directly with the person who made the post, or we can go to the site itself and make a post...If you go to the source and explain truthfully where you're coming from, you buy good will from people who were flaming you. There's nothing better than to turn an adversary into an advocate..."

business reputation article

As an entrepreneur, are you managing your business's online reputation? What tools are you using to find online information? If you have found negative posts, what have you done to curtail the negativity?

Local Foods: A Balanced Approach is Needed

Over the past couple of years, I have become increasingly involved with different projects that involve some aspect of local food system development. Given my interest and expertise, most of the focus has been on differentiating products by promoting the fact that they were produced locally. That is, consumer demand for locally-produced goods creates an opportunity for agricultural and food producers to realize higher margins. How big is this market, though? How much are consumers really willing and able to pay for local foods? Do consumers perceive "local" as being synonymous with other notions such as "small, family farms?"

Recently, I attended the National Value-Added Agriculture Conference. The keynote speaker was Gary Zimmer, a farmer, consultant, speaker, marketer... Gary owns and operates Midwest Bio-Ag, with offices in the upper Midwest. He is an organic farmer who markets a great deal of products in his local region. However, he presented a pragmatic, balanced view on the topic of local foods. What follows is a bit of Gary's thoughts with some of my own mixed in. I'll not presume that Gary would support everything below, so I'll take full responsibility for it. One word of caution: do not infer anything other than what I have written.

It's difficult to argue that there are not very real economic motivations behind how most food is grown and distributed in this country. The US climate is diverse and some things just naturally grow better in some areas than they do in others. We also have distinct growing seasons in most regions. This has led to large-scale production in areas where specific foods can be produced at low cost. That production can also be transported relatively quickly and efficiently to just about anywhere else in the country because of our distribution system. This has led to low-cost food at the retail level, an important objective in this country.

Because the low cost objective has been a key driver of how our food system works today, then it's almost by definition that, in most cases, locally produced foods are not going to be cheaper than if they were grown elsewhere. Scale economies, which lead to lower unit costs, are real. So, from a production cost standpoint, bigger is better. Local foods, in many cases, have been purchased primarily by those with relatively high incomes. They are somewhat of a luxury good, embodying not only freshness but support for local economies, etc. This begs the question, if locally produced foods are healthier and fresher, how can they be produced in a way that makes them accessible by everyone, even those with relatively low incomes?

We can't really expect the government to make this happen, can we? Is it the government's role to provide the BEST food or food that is GOOD ENOUGH? If the role is not for government to fill, then will the market make it happen? The market rewards production and marketing efficiency. The market got us to where we are. It's tough to fight the market! Consumers vote with their dollars. While many would love to buy food locally, many just can't afford it. Unless costs are lowered, they will continue to buy primarily from large-scale retail outlets. Many argue that we Americans spend less on food than consumers in most other developed countries, and that's somehow not what should be. We also seem to love to spend on our homes, cars, vacations, entertainment, and other items. Getting most people to shift expenses from other things toward food is an uphill fight.

Here's my bottom line: I strongly believe that locally-produced foods are demanded by most consumers. We have a long way to go before we'll be able to have a variety of local foods available to everyone who wants them at prices they can afford. To get there will take an approach that balances market fundamentals (like scale economies, transportation costs, consumer sovereignty) to make it happen.

E.coli outbreak in cookie dough-- How are you keeping your customers safe?

On Friday, June 12, Nestle recalled all of its refrigerated cookie dough after receiving a product recall recommendation from the FDA. It has yet to be proven what product has been contaminated, but 70 people in 30 states with E.coli strain O157 have eaten raw Nestle cookie dough. E.coli O157 is a very dangerous strain of E.coli that is usually found in contaminated meat. Most adults get better in about a week, but serious kidney damage and death can also occur. Of the 70 known to be infected, 25 had to be hospitalized and 7 had developed hemolytic uremic syndrome, a type of kidney failure.

Dr. David Acheson, associate professor for foods at the FDA has said, "You can't assume it's the usual ground beef or fresh produce." In the past 2 years, there have been major recalls involving peanut butter, pistachios, and frozen pot pies. With a growing list of contaminated product types, identifying a specific contaminant has gotten increasingly more difficult. The FDA is still investigating the cause of the E.coli O157 contamination. They are unsure if a certain ingredient was contaminated or if it was the facility. The facility has been closed temporarily and will lay off more than 200 workers.

NY Times article

CNN article

As a food producer, what are you doing to keep your customers safe? Do you inspect your ingredients (both produced externally and those produced by you) for potential pathogens? Do you have frequent food safety audits (both internally and by an outside lab)? Have your customers raised more concerns recently about food safety?

As a consumer, have you become more concerned about food safety? What can a food producer do to make you feel more reassured about the safety of your food?

Bing!

Just this past week, Microsoft has unveiled a new search engine called Bing (www.bing.com) which they are calling a decision engine. According to Microsoft, "Bing is specifically designed to build on the benefits of today's search engines but begins to move beyond this experience with a new approach to user experience and intuitive tools to help customers make better decisions, focusing initially on four key vertical areas: making a purchase decision, planning a trip, researching a health condition, or finding a local business."

As a frequent search engine user, you know (as do I) how most searches are getting to the point of information overload. A recent study by comScore ( a market research company that "provides marketing data and services to many of the internet's largest businesses") revealed that 30% of searches are deserted without a suitable result. Also, comScore discovered that over 65% of searches require a refinement (or requery) on the results page (please see the first link below to watch a video about Bing).

What does this new search engine have to do with you, the ag entrepreneur? Microsoft's research showed that users wanted more help in making decisions with shopping, travel, local businesses, and health. As an ag entrepreneur, you can take this opportunity to add your product/business/service to the Bing Local Listing Center (please check the second link below which will describe how to create a listing for your business). When a Bing user searches for your business, the search results with display driving directions, a 3D aerial view of your business, customer reviews, and more information if it applicable like hours of operation, web pages, email address, payment methods, type of cuisine, languages spoken, parking options, etc.

Bing video

Creating your own Bing listing

Building a web presence is an important part of marketing. Customers are demanding more information about the products and services they use. As an ag entrepreneur, what types of internet marketing are you using? Do you believe Bing (or any other search engine) will bring more customers to you? What are customers saying about your web presence (is it easy or hard to find info on your business)?

Killing social fears to become a better networker

Many people feel uncomfortable in meeting strangers. But if you don't meet strangers, how will you build your network? As an entrepreneur, you need to overcome your social fears so that you can talk about your product/service and build relationships with potential buyers, distributors, customers, employees, etc.

In an article for Forbes magazine, Bob Goodyear, technical product manager for Symantec, confesses to being a wallflower and having trouble mingling. On a recent business trip, Goodyear vowed to overcome his fear. Before the event, Goodyear said that he "researched all the companies that would be represented...so that when I saw the company's names on the guest's name tags, I had a piece of information about their firm to use as a conversation starter." Another technique Goodyear uses is to put a time limit on how long he feels he has to mingle. "I tell myself, Bob, there's nothing you can't do for 30 minutes."

Dr. Mark Goulston, a psychologist, has used Goodyear's strategies and has built on them. Goulston sets a goal for himself at social events. For example, he promises "to meet three new people and have them be glad to have met me." Another technique Goulston uses is something he calls "FTD delivery." Get to know people by asking how they feel, what they think, or what they have done or would do given a certain topic. By starting the conversation directed at the other person, you take the focus off of yourself (and lower your stress level).

Ultimately, saying "Hi" is all about believing that you have something worth sharing with the other person, says John Baldoni, a corporate communications consultant in Ann Arbor, Mich. "You can't be afraid of sounding incompetent," he says. "You have to believe that you deserve to have the interaction, that your company depends on you and that you have something to offer the other person in the exchange."

networking article

As an entrepreneur, do you fear social situations? Do you want to become a better networker so that you can attract new customers, distributors, employees, etc? What tips do you have for other entrepreneurs who want to become better networkers?

Producing an e-newsletter (that will actually be read)

How many emails do you receive a day that you delete immediately? For me, I'd say a minimum of 50. With the loads of emails we all receive daily, how do you as an entrepreneur create an e-newsletter that doesn't go straight to the trash?

Carmine Gallo recently wrote an article for BusinessWeek about his interviews with Dave Robinson, VP of marketing for Mozy (an online computer backup service), and Janine Popick, chief executive of VerticalResponse (an email and direct marketing provider for small businesses). In his interviews, Gallo searched for advice on getting customers to read e-newsletters.

Robinson advised that you should only send an e-newsletter if you have something relevant to say. He said, "if it's not interesting to our customers, we're wasting their time." Popick also commented that entrepreneurs should share their expertise. A "how to" article or "five easy steps to (fill in the blank)" are great ways to engage customers, but remember, keep your articles short, sweet, and instructive.

When a customer signs up for an e-newsletter, they are making a request for updates about your business. Don't disappoint. Popick said, "be specific regarding the frequency of your newsletter and the value you will provide." Irrelevant information can easily become frustrating and force your customers to unsubscribe. The marketing staff at Mozy chose to limit their e-newsletters to once a month to prevent diluted content.

One of the best e-newsletter articles is to tell customer stories. Robinson said, "The last thing we want to do is tell a story with a bunch of boring copy and bullet points. The best best way to tell our story is through real people and their anecdotes....We want people to read our newsletters and look forward to them. If it's all about the company-- give us more money-- it turns people off."

Important points to remember when writing an e-newsletter
1. offer expert advice
2. stay true to customer expectations
3. use customers to tell stories
4. deliver great content and the money will follow

e-newsletter article

As an entrepreneur, do you send out e-newsletters? After reading this post, will you be modifying the content and/or frequency of your e-newsletters? What feedback (positive or negative) have you received about your e-newsletters thus far?

Educating customers through YouTube videos

YouTube is a video sharing website where users can upload, view, and share video clips. Have you ever used YouTube? Many people use YouTube for comedy and music, but can it be used as a tool for educating your consumers?

Lauren Luke is a cosmetics entrepreneur. She is a self-taught makeup artist who has used YouTube videos to educate consumers on makeup application. Her videos include experimenting with bright colors and recreating celebrity looks. Why are her videos successful? Luke is a "girl-next-door" type who offers easy to understand, step-by-step instructions for her customers who have no technical cosmetology experience. Since her first video post 18 months ago, Luke's videos have been viewed over 40 million times.

What does makeup have to do with agriculture? You may have a great product or service, but if your customer doesn't know how to use it or doesn't understand how it can benefit their lives, you won't be successful. Many women are intimidated by the amount of colors and brands of makeup available and don't know how to apply it or what to use. Luke's videos help women learn what makeup is best for their skin and how to use it.

Let's use a home-based jelly business as an example. Customers already know what jelly is and how to use it (spread for toast and crackers), but where else can it be used? You could post a video on creating a marinade with an orange marmalade or mixing a strawberry jelly with a cake mix to create a homemade strawberry cake. Another video idea would be to talk about the ingredients in your products like blueberries which are high in antioxidants and can help protect the body from free radicals. A customer can read a recipe card, but by watching a video, they can see how easily they can recreate your recipe or learn about health information. Also, a video allows your customer to see whom they are buying from--making the sale more personal.

Lauren Luke article

Have you used YouTube videos as a marketing technique? Have your videos helped you to strengthen your customer base?

interesting info on farming during hard times

Marketing to seniors

Entrepreneur.com recently interviewed Maria Henke, Assistant Dean of Gerontology at USC. Opportunities are growing in the senior market and Henke has advice for business owners.

"When targeting older persons it's especially important to consider the functionality and safety of the product...you may also have to consider providing support services such as assistance using a new technology or device. Think 'universal design'. Not only will entrepreneurs make and sell better products in the senior market; they will also be more successful to a broader range of consumers." Henke also suggests that entrepreneurs looking to target seniors should segment a particular group. "This is not one big homogenous group that ranges in age from 55 to 95," states Henke. A healthy, active, employed senior will have much different needs than a retiree in poor health. Your targeted segments will affect how you distribute your product and your selling price.

One of the major mistakes businesses make in marketing to seniors is assuming that seniors are incapable of using technology. Henke reports that, "Older adults are the fastest-growing group of internet users. According to the U.S. Census Bureau, people over the age of 65 spend more than $7 billion per year online. Another mistake people make is to assume that people's consumption habits don't change over time. If older Americans are as brand loyal as they're made out to be, then the American auto industry certainly would not be in such dire straits."

Before moving into the senior market (or any new market), an entrepreneur must do their research. Henke has developed a list of 5 questions to answer before moving into the senior market.

1. What need is to be met with the introduction of the product?

2. How will those needs change over the life of the product?

3. How significant are functionality issues related to familiarity with technology/physical ability, etc.?

4. What language is appropriate and what messages resonate with this target audience?

5. How might the target audience define themselves (e.g., do they think they are "older women" or do they define themselves as "boomers" or "seniors")? How congruent are your views of this audience vs. how they self-identify?

senior marketing article

As a business owner, do you currently market to seniors or are you looking to move into the senior market? In your research, how does marketing to seniors differ from other segments? Do you think the senior market is an under-served market and has many opportunities?

Vague food labels leave parents frustrated about food allergens

Being diagnosed with a food allergy not only affects the life of that individual, but it also affects the way their family eats, shops, and lives. According to the Centers of Disease Control and Prevention, 3.9% of children (approximately 3 million) in the US have a food allergy and reports are on the rise. From 1997 to 2007, reports of food allergies in children under 18 have risen 18%.

The most severe and life-threatening allergen is peanuts. According to Dr. Evan Matheson, an allergist, peanut allergies were uncommon when he started his practice in 1982. Recently, Dr. Matheson says, "I saw seven in a week."

What does this mean for food producers and supermarkets?

A federal law was passed in 2006 instituting labeling for products that contain common allergens. Unfortunately, there is still confusion. Manufacturers are placing vague warnings like "may contain" or "manufactured in a facility that processes" allergens. These labels leave consumers confused and frustrated.

For Michelle Fogg, mother of a daughter with allergies to peanuts, tree nuts, eggs, milk, soy, and mustard, her first shopping trip after her daughter's diagnosis was traumatic. She said, "I left the store crying because everything has a warning on it."

Some parents feel that the "may contain" label is too broad. Scott Mandell, founder and CEO of Enjoy Life Foods, believes that labels need to be standardized. Mandell has turned parents' frustration with vague labels into a business. Enjoy Life Foods produces allergen-free cookies, granola, and other snacks. "When you read a lot of ingredient labels in the market, there are certain ingredients being used where you need a degree in chemistry to really know what this is--and what allergens might this product have in it. You read our ingredient labels, you understand what our ingredients are," says Mandell.

food allergies article

As an ag business owner, do you have allergen warnings on your food products? Would you like to see these labels standardized? Is the increase in children with food allergies a business opportunity for you? Would you consider making "allergen-free" products?

Candy sales up in a down economy

In hard economic times, it seems consumers are cutting back on spending, and businesses are hurting. So how does that explain increasing candy sales?

“It seems that people will treat themselves to something small like a little bit of candy,” says Margaret Allender, owner of the Nashville Candy Store. She has seen a 20% increase in sales this year.

Amanda Weiss, owner of Mandy’s Candy in Ellettsville, IN, says that customers “need those pick-me-ups during these times.” Her sales have increased 30% this year and has seen a flood of new customers.

When people are faced with tough economic times, indulgences seem to be cut from expenses, but they are still looking for relaxation/stress relievers. So instead of that spa treatment or trip to the mall, a few pieces of candy seems to be a cheap indulgence over pricier things.

Candy sales article

As a consumer, do you feel that you have been forced to cut spending in this economy? Have you chosen to replace indulgences with cheaper substitutions (like candy)? As a business owner, how have your sales been affected? Do you sell any “cheap indulgences” and have seen an increase in sales in these items?

Some Research Updates

One of the things we professors do is review manuscripts being considered for publication in academic journals. This morning, I reviewed two papers. One was on the application of business management techniques to identify new opportunities on farm operations. The other was on the benefits of diversifying farm enterprises. In that paper, they showed that those farms in a region in Kenya that had higher levels of diversification also had lower levels of food insecurity (being able to feed the family).

These papers point out some pertinent economic/managerial concepts. First, the farm is a business, no matter what is produced. In the first paper, they reported the results of walking a Slovenian dairy farmer through alternative opportunities, finally settling on breeding livestock. How many of our farmers could benefit from a systematic review of current or emerging opportunities? Nearly 100%! Always look to improve operations or go down a different path, if needed.

Second, diversification is important. The paper focused on enterprise diversification, but market diversification can be just as important. Enterprise diversification allows you to smooth income over several alternative enterprises, taking advantage of high prices or yields in one to compensate for low prices or yields in another. Market diversification, selling to more than one buyer, helps protect you should one market go sour.

These simple concepts underscore the need to plan for business success. We at Penn State Cooperative Extension have a number of programs to help you develop a business plan. Other states have some great resources, as well. Just be sure to take time to plan for business success and to carefully think through all management options.

How do you turn negative comments about your business idea into opportunities?

Becoming an entrepreneur is no easy task. You will spend countless hours honing your business idea and plan, but your dream can easily be crushed by a negative reaction.

"There will always be people who question your strategies and abilities,"says Romanus Wolter, author of "Kick Start Your Success". It's easy to become aggravated by these negative comments, but you must remember that these negative comments can be learning experiences because there are always chunks of truth in what is said. Wolter also states that "every situation has the potential to uncover hidden opportunities to grow your business and shed new light on how to overcome challenges. Your adeptness at tapping into these opportunities can open the door to your next strategic breakthrough."

Wolter's points to remember in turning negative comments into opportunities:
1. Catch yourself. Being confrontational suppresses people who have unique ideas.
2. Recognize that, more often than not, people want to help you succeed. People may not know how to give constructive criticism. Help them to feel like they are part of your business's success.
3. Be open to unorthodox ideas. Don't dismiss an idea just because it sounds unusual.
4. Always remember that you're the business owner. Write down people's ideas, but don't feel obligated to apply them.
5. Confirm your direction with successful people. Discussing your ideas with other successful businesspeople promotes creative problem solving.

Negative reactions article

Are you developing a business idea? How have you dealt with negative reactions so far? Have you been severely discouraged? Have you discussed your idea with other successful business owners?

How effective is promotional swag?

What exactly is swag? Swag (Stuff We All Get) is corporate/branded merchandise given out for free to promote the company/brand. As a business owner, you probably have Tshirts, hats, etc that you give to your employees to wear at work, but have you ever thought about giving out your branded items to the public?

A recent study done by the Advertising Specialty Institute (ASI) found that swag generated a lower cost-per-impression rate over national magazine ads and prime time TV ads. They found that the cost-per-impression for promotional products was an average of $0.004, compared to $0.033 for national magazine ads and $0.019 for prime time TV ads.

The ASI not only found that swag had a lower cost-per-impression rate, but also found swag to be highly remembered by survey participants. The ASI surveyed 600 participants (who were mostly businesspeople over the age of 21) to recall swag received over the past year. Significant findings include:

-84% of participants remembered an advertiser based on a product they received.
-24% of participants revealed that they are more likely to do business with an advertiser based on swag they've received.
-Within the category of wearable swag, bags were reported to be the most frequently used items, with participants stating an average use of 9 times per month.

ASI president and CEO, Tim Andrews, said that "During a time when we're facing turbulent economic conditions, this research advises marketers and business owners to invest in advertising specialties now more than ever. Advertising specialties provide measurable results for a very reasonable investment."

Swag article


What kind of advertising do you use? Does it include swag? If not, would you consider adding swag as advertising? What is the return on investment for your current advertising?

Why is packaging an important part of sustainability?

One of the top trends driving consumer purchases this year is sustainability, reports Information Resources Inc, a company that provides retail tracking information. In 2002, only 5 products were released with an environmentally friendly claim. In 2007, the number of products jumped to 328.

There are 3 reasons companies use sustainability practices.
1. long term well-being of the environment
2. betterment of society
3. enhancing the bottom line

According to Patrick Smorch, Georgia-Pacific's director of packaging sustainability, packaging affects every aspect of business. "From product protection to logistics and shelf appeal, packaging is a necessity for consumer packaged goods companies. Even the smallest efforts at sustainability can garner big savings when you consider the effects on the entire packaging supply chain."

Consumers are demanding sustainable packaging. Jeanne von Zastrow, senior director of member services for the Food Marketing Insitute, has made this a high-priority issues with FMI members. "On the part of consumers, there is an increasing interest in buying food products, including meat and poultry products, based on packaging. By that, I don't mean packaging that is decorative or that comes in a certain style. What I really mean is purchasing products that have less...packaging...in fact, as little packaging as possible. And as retailers, we're trying to figure out how our companies can make their operations more renewable and friendlier to the environment. The packages that our food products come in are getting a lot of our attention."

sustainable packaging article

As a food producer, how much research have you done on packaging your product? If you are considering changing to a more sustainable package, would market your product as sustainably packaged?

High calcium intake may reduce risk of digestive cancer

A study was just completed by the National Cancer Institute on the link between calcium intake and cancer diagnosis in men and women ages 50 to 71. Calcium is already known to boost bone health, but more research was needed to evaluate calcium 's effect on cancer. Nearly 500,000 participated in this study. The 20% of men who consumed the most calcium (about 1530 mg per day) had a 16% lower risk of digestive cancer as compared to the 20% of men who consumed the least (about 526 mg per day). For women, the 20% who consumed the most calcium (about 1881 mg) had a 23% lower risk of digestive cancer as compared to the 20% of women who consumed the least (about 494 mg per day).

The Institute of Medicine recommends 1200 mg of calcium per day for men and women over age 50.

As a food producer, would you consider adding calcium to your product based on this study? If your product contains calcium, would you consider advertising the health benefits of products containing calcium?

calcium article

Marketing Choices

I recently read an article on MSNBC.com that shared the story of a small Vermont business and their experience with an addition made to the products sold in their store and catalog. The business bills itself as "purveyors of the practical and hard to find," offering such items as kitchen wares, suspenders, pine tar soap, and socks.

The owner of the business, a gentleman in his mid-sixties, decided to begin offering a non-traditional line of products - of the intimate variety - hoping they might appeal to older customers. This decision was made without any customer requests for these products or market research. In fact, the owner's own sons disagreed with the decision.

How did this experiment work out? Well, the business claims that the new products are big sellers. However, they also admit to receiving hundreds of letters expressing opposition to the new product offering with some asking to be removed from the mailing list. Debate also continues as to whether the new products have helped or hurt the business.

While their experience is certainly unique, I think it holds a valuable lesson for all marketers. You must know your customers and make strategic marketing decisions. If you don't, you risk losing customers that disagree with the direction you've taken or who's needs you no longer meet. Perhaps this is okay, but unless you can replace those customers with new ones, you risk losing your business.