Surveys of mid-Atlantic consumers conducted by Penn State researchers part 1

Over the past 2 years, researchers at Penn State University have surveyed mid-Atlantic consumers to determine consumer attitudes and behaviors towards food purchases. Baltimore, New York City, Philadelphia, Richmond, and Washington, D.C. were chosen based on the diverse demographics of consumers who reside in each area.

Survey questions were developed to investigate factors influencing consumer purchasing decisions regarding fresh produce and value-added, processed products. Researchers were interested in the role and impact of increasing food prices, rising energy costs, and other economic factors. Survey respondents were also asked about food safety, quality, availability, variety, and affordability. The surveys were conducted quarterly to investigate changes over time to better forecast consumer responses to situations, such as further increases in energy costs and reoccurring food safety issues.

For the next few weeks, I will be blogging about these survey results and how they can help entrepreneurs make decisions about their businesses. The first set of results I will discuss involves questions regarding on what types of food products
survey respondents purchased, where they purchased these products, and what variables may have affected their purchasing behaviors. One particular question asked participants to indicate what types of produce/produce-based food items they purchased for their household during an average week.

90.6% of survey participants chose fresh fruits and vegetables as items bought for their household during an average week. The next most popular item was potato/corn/vegetable chips, selected by 71.2% of participants. Other popular food items included frozen fruits and vegetables, selected by 64.3%, jams/jellies/marmalades (59%), fruit/vegetable juice or nectar (57.4%), vegetable-based soups (56.6%), and canned/bottled fruits and vegetables (54%).

To read more about the survey, please visit www.midatlanticspecialtycrops.com and click the "Newsroom" tab.

As an ag entrepreneur, do you sell any of the above products? If you sell a variety of these product types, are your sales similar to this data (meaning is fresh produce a better seller than fruit/vegetable juices or canned fruit/vegetables)? If you are thinking about becoming an ag entrepreneur or you are an ag entrepreneur looking to expand your product line, does this data influence your decisions on what you will sell?

Learning Directly From Your Customers

As a business owner, you probably have a good sense of your customers’ needs and wants, but there is always the possibility that your own personal views and preferences influence what goods and services you offer. What better way to assist in product selection than to directly as consumers? Surveys and focus groups can serve ask the basis for the future direction of your retail outlet and can be conducted in the store and online. For more information on how to develop survey questions and conduct focus groups, visit the Penn State Farm Business website at: http://extension.psu.edu/farm-business/announcements/articles.
Focus groups usually involve a smaller number of consumers (usually, eight to 12) and are simply an in-depth conversation about a particular set of topics. By only including a limited number of participants, it is very likely that you will get each and everyone’s input, but the data should not be used as the only source for making business decisions. Rather, focus groups can be thought of as a starting point for selecting products, making future business decisions, and for selecting questions that can be included in additional surveys.

Focus groups can be conducted online using tools such as Google Groups (http://www.google.com/grphp?hl=en) or Yahoo! Groups (http://groups.yahoo.com/). Both can be used to create a group and invite others to join and read and post messages. Additional features for both tools allow users to read and post messages online or view and respond to messages that are sent to their email addresses.

Several online survey programs are available for free, with limited functions, but the full versions can also be purchased on an annual basis. Tools such as SurveyMonkey.com, Zoomerang.com, and SurveyGizmo.com allow users to:
• create surveys,
• send links to the survey in emails or incorporate the link into a webpage
• provide some analysis, and
• download the data in either report form or as an excel document.

Similarly, explore Google Docs Forms which can be designed to look like a survey and imbedded in an email that you send to potential participants. Once received, the recipient can respond to the questions and click the “submit” button when finished. You will then have access to a spreadsheet where responses are organized by survey participant.

Additional Web and Email Monitoring Tools

You’ve probably decided that monitoring what customers post about your business online is an important task to implement, but there are other aspects of your business that you must also monitor online:
• number of visitors who access your website and how this foot traffic changes throughout the day or week,
• effectiveness of an email, online newsletter, or other communication that encourages customers to visit your website, and
• how long visitors stay on your website.

Asking customers about their shopping experience, both online and your retail store, is a smart strategy – one that can assist you in better understanding what new goods and services might appeal to them. The process of investigating and collecting this data is referred to as web analytics, where the business owner can make decisions about:
• whether or not customers are responding to messages and information contained in an email message and,
• if certain webpages appear to be more appealing to visitors than others.

Just as there is a variety of tools available for monitoring what consumers post about your business, there is also great array of third party websites that can help you gather information which can be used to strengthen your online presence.

Google Analytics (google.com/analytics) is a free program that can be used to collect:
• how visitors “find” your site, whether they type in the URL or if they are directed from another site,
• your “bounce rate,” which is the percent of visitors who visit your landing page and then leave your website,
• learn how long visitors remain on your site, how many pages they access during their visit, and if they are lead to a certain page on your site because they clicked on an ad you posted elsewhere online,
• view standard reports or create custom ones that provide you with metrics including the number of new visitors who have accessed your site, number of times a certain product was purchased, revenue-per-click, and
• many more useful metrics.

Implementing Google Analytics requires signing up for a Google account, entering the URL for your website, and adding the Google Analytics Tracking Code to your site. Once the system is in place the benefits can greatly assist a business with understanding who is visit the site, when, and where they navigate to. All important statistics when monitoring the effectiveness of a website.

Responding to Customer Reviews

Whether posted on your website or a third party website, it is your duty as a business owner to respond to what has been published online. Your response to negative posts can help reverse some of the ill feelings that the poster and readers might have towards your business.

Based on data, and if the customer has a valid issue that needs to be addressed, it is necessary to do the following:
• post a reply and acknowledge that there was a problem and it will be corrected,
• provide an explanation for the problem,
• apologize for the problem, and
• thank the customer for informing you about the issue.

Consider responding to positive reviews as well. Thanking customers for publishing these positive views, feelings, and experiences is a way to give your business a personality and increases your presence on the Internet. A simple thank you is all that is necessary, based on input from Yelp.com: “while a gift or invitation sounds like a nice idea, it can also be misinterpreted as a bribe or payment for the review. Remember, this customer already likes your business -- just use this opportunity to thank them and introduce yourself.”

Inviting Consumers to Post Reviews On Your Website

Consumers like to tell others about problems and issues that they have - both good and bad. If consumers are likely to post reviews and critiques online, what better place than on your business’s website?

There are a variety of tools you can employ to add a review and comment section to your website. Consider enlisting a service that sends e-mails to customers who have made online purchases and that invites them to provide a review. Or, include an option where consumers can provide ratings and reviews directly on your website. PowerReviews (powerreviews.com) and Bazaarvoice (bazaarvoice.com) are two such companies that provide a mix of tools for capturing customer input.

After you have the capability to ask for and post customer reviews, what will your strategy be for soliciting the reviews and encouraging customers to provide the valuable information? Suggestions range from “including a ‘write-a-review’ link on every product page” to sending customers thank you emails with links to review/comment pages, to offering customers an incentive for providing a review like a free item or discount/points that can be applied towards a future purchase.

As you work through the process of asking for and posting reviews on your website, you will certainly find some reviews with spelling errors, grammar issues, and missing or incorrect product details. It is permissible to correct spelling, capitalization, and/or punctuation, but editing much more of the review should be avoided.

Monitoring Your Business’s Online Presence

The number of forums, bulletin and message boards, and social networking sites that allow consumers to comment, rant, or rave about a business is continuing to grow. Taking the necessary steps to monitor what others are saying about your business online is an essential component of building and protecting your business’s reputation.

Consumers are not limited to just posting on networking sites such as Facebook and Twitter. Rather, sites developed to encourage consumer reviews provide a rich bevy of business reviews (for example, Yelp.com and Citysearch.com). Your ability to monitor these sites independently, or one-by-one, may seem a little daunting. Luckily, third party websites can assist you with this task.

You might want to consider a service such as socialmention.com. The site uses your keywords to search through blogs, micorblogs (Twitter), networks, images, video, Q&A, and other information posted online. In addition, a free RSS feed is available to alert users daily about new postings. Another option is Google Alerts (google.com/alerts). This tool works off of the same principle as socialmentions.com but without a Twitter alert search feature. An added feature that Google Alerts does provide is the user can determine how often alerts should be sent. Alerts can be sent weekly or “as-it-happens.”

These tools can also assist producers, retailers, and others about topics consumers are blogging, tweeting, and posting about including trends, hobbies, and interests in new products
and services. By entering keywords/phrases into search boxes on these sites, users may see common themes among those who are posting online and they may even discover new merchandise that would be a good fit for their current product offering.

Events – know when and how to host them

Hosting an event can often intimidate an ag. business owner/operator. The list of concerns can range from where to direct overflow parking, to having enough staff, to what event would customers even be interested in attending? Certainly, it would be a shame for an event to not live up to customers’ expectations – which can negatively impact your business. As the saying goes “anything worth doing is worth doing well.”

So, what events could you host? Are there particular products that your business can tie-in with: wineries and harvest parties, growers who sell their strawberries and strawberry festivals, etc? Do you celebrate your “grand re-opening” each year? Are there particular anniversaries (1st anniversary, 5 years, 20, 100…) that are monumental for your business? Invite your customers to celebrate with you. Is there a charity that you like to support that could benefit from proceeds from admission, sales, and a raffle? What about hosting an event for your top customers? What better way to show your appreciation than to single them out and host something in their honor.

Don’t feel that you have to go it alone. Involve other complementary businesses. They can be vendors and purchase floor space where they can sell products or they can even co-host the event. If you have the space, bring customers to your location but come to an agreement with other businesses that they will supply employees who will help in the planning, day-of, and clean-up. Splitting the costs could make a first time event more palatable.

As you develop your ideas for events, keep in mind that your ultimate goal is to increase revenue. So, when putting the list to a vote, give stronger consideration to those that make sense for your business, that are likely to increase foot traffic and bring in new customers, and that you and your staff can “get behind.” If you don’t have faith in your idea, the event is likely to not have the impact you had hoped.

You have the space, now use it!

I think a strategy that works well for ag. businesses is utilizing retail space to the fullest. We all know that wineries can serve as sites for weddings and receptions, but how else can retailers “sell” their space during non-retail hours (or at least areas away from the general public)? The possibilities could be endless. What you’ll have to consider is whether or not you have the staff (who are willing) to work after hours, and if the after hours or the non-sale peak you have available would appeal to groups or organizations. Also, do you have ample parking, restrooms, and tables/chairs/etc. that groups might need for their event? Having organized events myself, I know that the “creature comforts” like pleasant bathrooms, comfortable temperatures, accessible parking, are what attendees focus on and complain about.

What are some ideas? I just received a birthday announcement from my six year-old niece. Her party won’t be held at a kid’s themed restaurant or arcade, but at a pumpkin patch. What an interesting idea – an open space where kids can run free, pet animals, experience agriculture, and where pumpkins serve as guest favors. I’m sure that the pumpkin patch is a more cost effective option – and doesn’t limit my niece as to the number of guests she can invite.

You may have considered other ideas for using your space: hosting parties, allowing clubs to rent out an area for meetings (what garden club wouldn’t want to have their monthly meeting in a garden center?), promoting the space as the perfect place for a local wine judging event to be held, etc. I have even seen ag. businesses offer their space for engagement parties, rehearsal dinners, and garden centers who allow couples to get married and have their reception at the outlet - all can work nicely for businesses with a certified kitchen. In instances where just the space, restrooms, and parking are available, it is worth developing a list of caterers that you approve of to make the host’s job easier. Think of what other services might be necessary for a successful event and create a list of them, too.

So, think outside the box – how can you effectively use your space? The payoff may be more than the revenue you receive the day of the event but from the increase in attendees who become customers.

Adding to your product mix – before, during, and after you commit to selling niche products

Continuing our discussion from last time, once you have your list of potential niche products what is your next step? Pretest your ideas with a group of customers and ask them if the idea appeals. Next, trial a few of the goods. If you’d like to sell lamps, display a few in a prominent location where customers will notice them. Don’t forget that your promotional efforts will need to be bumped up a little – if you carry new products, let the community know that you now carry something a bit out of the ordinary.

Now, do customers take notice of the lamps, or whatever else you decided to carry, and do they purchase them? It may take some trial and error and certainly you don’t want to make the decision to delete a new product based on a few reactions. Instead, develop a promotional strategy where the lamps are positioned as a nice addition to what you already sell. Show the lamps in use. In the store, create a small vignette that mimics a sitting room where the lamps are turned on. In advertising, whether in print or online, use visuals, too. Often times consumers need to see how the product is used in situations before they can envision how they will use it themselves.

As you work through the seasons and focus on your niche product – keep track of the outcomes of all your efforts. Have you seen an increase in foot traffic (consumers who visit your store) because of the specific ad you created using the lamps? Once at the store, do customers purchase them? These and other metrics that you use to judge promotion and product success should be considered when you either decide to add more lamp options or choose to go another path with niche goods.

Only you will be able to truly determine what new products will work for your business So, what will “fit” your store, what could you provide that would differentiate your business from others in the area, and how are you going to proceed after the new product is a success?

How does your product offering grow?

As a retailer your options for products you sell can be immense - whether you are an established business owner or an entrepreneur putting your business plan together. What is the best way to add new goods and value-added processed products to the mix and how do you determine what to discontinue? Today’s retailer may be a little less traditional than in the past. Florists offer wine tastings and wines for sale, winery tasting rooms offer bath and body products, and garden centers offer value-added processed food products. There are no bounds as to what a retailer could offer as long as it makes sense for the overall business mission.

What does this mean exactly? Well instead of considering what makes sense to sell in a traditional florist or garden center – consider what makes sense for your target customer or that complements your core product? Several options, whether goods or services, could be considered – the key is to make sure that the “niche” idea “fits” with what you want to convey to your customer. For example, gardeners who shop at a garden center or nursery may enjoy other outdoor hobbies and activities. Might products suited for birding appeal to clientele? Consumers who visit florists might look for goods to decorate their homes. Would dinnerware, decorative clocks, or linens be appropriate for the store?

Take care in selecting products that may not be available at other local stores. It would be in your best interest to carry something that will differentiate your business from your competitors. So, do a little shopping yourself. If you are considering adding ornaments to your mix – what brand could you sell that you think “fits” and that customers cannot get elsewhere in the local community? Or, when you travel, check out a few progressive retailers and evaluate the non-traditional goods they carry. As you look around, watch customers – do they notice the products, do they pick them up, do they purchase them? Develop some criteria that you will use to determine what niche products to sell.

Stay tuned until next time when we talk about the next steps for growing your product offering.

Tips and techniques you can use in the retail outlet to appeal to your female customer

In the last blog posting I initiated the discussion about attracting and appealing to your primary customer, the female in the household. Certainly, agricultural businesses do not want to ignore the male consumer but research clearly demonstrates that appealing to the female in the household can have a strong positive impact on sales. The purpose of this blog is to make the retail outlet more comfortable for shopping.

First, consider “who” will be shopping with your female customer. Will she have a female, male, or child in tow? The situation that will benefit your business the most is if she brings a female companion. She will probably shop the longest (in terms of minutes) when shopping with a friend, and possibly spend more. How much of an effort would it be for you to clear some space near the entrance and create a waiting area for reluctant shopping companions? The issue becomes trickier when your female customer is shopping with young children, which would require a retailer to provide babysitting services, but for an older child or adult companion placing comfortable chairs, a television, and magazines near the entrance could be the perfect place for the female shopper to “park” her companion.

Continuing on through the store, how cluttered is your retail outlet? In general, more floor space should be devoted to browsing than merchandising. This allows customers to pass each other without touching each other, especially if carts are used in the outlet, and makes the space look less confusing. If a space is arranged and cluttered in such a way that the customer cannot see a clear path to navigate they may become overwhelmed and decide not to walk forward but rather walk to the door and exit.

A few other things to consider include using color at key places (on back walls or areas where consumers don’t tend to walk to naturally) to draw attention and encourage customers to walk throughout the space. Color should be used strategically to draw customers to particular areas within the space. Along with using color on the walls, use different textures of wallpaper, paneling, and other material to catch the eye. Choose colors that correspond to the theme of your outlet and that works with the merchandise you sell. For a winery tasting room that is trying to convey a sophisticated feel and where a fair number of glass wine bottles align the walls – colors such as terracotta, a warm soothing yellow, or another complementary color should be considered.

How you use these tips and techniques is up to you but keep in mind that these strategies can only improve a retail space and make it more comfortable for your customer, which should be your goal.

Using Facebook as an online storefront

Do you use Facebook in your business? If so, you are probably seeing the benefits of this quick and easy way of communicating with your customers. Some businesses are taking their Facebook presence to another level. Retailers are now using Facebook as an online storefront. Customers can make purchases without ever leaving Facebook.

According to the article "Retailers working to turn Facebook into marketplace before holiday shopping season" by Maria Halkias, this phenomenon is referred to as "social retailing". How does it work? "Best Buy is an example of a large retailer with a "shop" tab on its Facebook page. Its entire inventory is on Facebook, and users are encouraged to share items they're considering with their friends and read what others think about a product."


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As an ag entrepreneur, how has your Facebook presence helped you reach customers? Would you consider selling your products on Facebook? Why or why not?

Marketing to women: Strategies to attract her to your store and keep her there

In the horticultural retail business management class I teach and during extension presentations I deliver to green industry and produce industry growers and retailers, I talk quite a bit about identifying the primary customer and using proven strategies to meet their needs and wants. Most likely your primary customer, who is the gatekeeper for what is purchased for the household, is female – just as it is for the audiences I help educate. A fair number of resources are available, ranging from books to websites, which provide tips and describe techniques on how to best appeal to females, who on average make 80% to 85% of the purchasing decisions for the household.

So, with such valuable information available what can an agricultural business owner/operator do to turn shopping into an exceptional retail experience? Let’s take a “walk” through the outlet and consider some easy and quick fixes that will encourage her to walk throughout the store and shop as long as possible. According to Paco Underhill, a cultural anthropologist and author, it takes a woman only 3 seconds to determine whether or not the store she has entered is the right store for her. Three seconds for her to walk through the doorway, look right, look left, and either continue forward or turnaround and leave. Think about what you can do just around your entrance to encourage her to stay, rather than flee.

Take a look around your parking lot. Would containers with flowering plants add value to your outdoor space? What else could you consider adding to make the space inviting? Consumers find the sound of running water to be soothing – is there space to add a fountain or water feature?

Now that she is approaching the door to come into the outlet is the entrance and exit clearly marked? Is there ample space in the “decompression zone” (area just beyond the door) where customers can take off their sunglasses and coat and adjust to the inside setting before moving into the store? Keep this area clutter free so that customers have ample room to make any adjustments but also keep in mind that customers tend to overlook merchandise placed here.
Stay tuned until next time when we talk about merchandising tips and techniques to use in the retail outlet.

Can YouTube be used to help you market your ag. business? Part II

As with other social networking sites, it is necessary for an agricultural business to post frequently, though the number of videos produced may increase and/or decrease based on the seasonality of the business. To tie-in with other social networking tools you may be using, consider posting a video based on content posted in a blog, Facebook, Twitter, or other social network. Don’t forget to let consumers know when a new video available by sending them emails, placing an announcement on your website, putting a sign in your retail outlet, and posting on your other social networks.

YouTube can serve as a marketing and customer relationship tool for agricultural businesses. Since many people respond to visuals and absorb more information through their eyes than their ears, it has been suggested that “video is much more engaging than text” and it is possible that consumers will remain on a website for a longer period of time if video is available for them to watch (http://www.youtube.com/youtubeonyoursite). Whether videos are created to promote a business, new products for the season, helpful tips, or how-to’s, posting videos on YouTube is just another creative way to reach current and potential customers and inform, remind, and persuade them to purchase your goods and services. Allowing consumers to view videos you produce adds another dimension to your website or emails.

As intimidating as posting a video on YouTube may be, consult the YouTube help pages where you can find videos and directions on numerous topics ranging from capturing sound to compressing video. Other resources can be found online through keyword searches. Once a process is developed, the number of videos and the content is only limited by your imagination.

Can YouTube be used to help you market your ag. business? Part I

As I read through the many email newsletters I receive each morning, it sure is apparent that topics pertaining to social networking, for beginner or experienced users, occupy a fair amount of space in each piece I read. A good deal of attention is given to social networking sites such as Twitter and Facebook, but an agricultural business should consider the benefits of using YouTube to inform, reach, and build relationships with consumers.

Why use YouTube? Since many people are “visual”, this tool may better help convey benefits and features of your goods and services compared to “still” images that are just two-dimensional. Also, based on statistics, YouTube, in terms of “revenue and audience use,” is projected to increase 51% between 2009 and 2013 and in audiences between ages 18 and 34 (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=112137).

What is YouTube exactly? YouTube is a website where viewers can watch programming such as movie trailers, clips, and full episodes of news programs, special interest shows, and videos that amateur videographers create. Videos can vary from less than a minute to over an hour in length. Viewers can find videos by:
• looking through videos arranged by pre-determined categories (e.g., How-to & Style),
• entering keywords into the search box (e.g., gardening, grilling vegetables), and
• clicking on links for related videos.
Viewers can also create a YouTube account and “subscribe” to “channels” that are specific to the source/person who posts the video (e.g., Garden Girl TV) or topic (e.g., how to make wine). By subscribing, viewers receive weekly emails that alert them when a new video is posted to their account.

Check back next week where I’ll describe how YouTube can be used for marketing goods and services.

Tailgating- a new merchandising opportunity?

On the eve of a Penn State football game, I have been thinking about the monetary impact tailgating has on State College, PA (and other towns with a large football following). I believe that many retailers are missing out on profits by not merchandising for tailgating season.

A tailgating study conducted by the Weber grilling company reports that over the past 12 months, 1 in 8 Americans has tailgated 3.4 times. Tailgaters also reported their main tailgating purchases. "The ‘basics’ tailgaters rank their top four foods: hamburgers (70%), brats (45%), chicken (42%) and hot dogs (42%) to the tune of $106 per tailgate or $441 in groceries per year for this activity. Another group, the ‘gourmet’ tailgaters, prefer chicken (43%), ribs (39%), brats (37%) and steak (33%) to the tune of $165 per event or $1,001 per year."

Meat is not the only merchandise tailgaters need. Other items may include veggies for grilling, wine, beer, snacks, condiments, ice, sauces, desserts, drinks, serveware, etc. Why not set up a tailgate merchandise area in your retail space? Tailgaters will appreciate the convenience of a "one-stop-shop" and you may see your sales increase because of this. Use your creativity to design a space centered around your local team and advertise, advertise, advertise!

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As an ag entrepreneur, have you done any merchandising for tailgating? Have you seen any increase in sales for certain products during football season?

Honing your negotiating skills

As an entrepreneur, you will need to negotiate with suppliers and clients. Many people hate negotiating because they feel it leads to tense situations and unhappiness (for possibly both parties). In an article on The Customer Collective (a forum for sales and marketing executives), author and CEO of Top Sales Associates, Johnathan Farrington, gives tips on making negotiating as painless as possible.

1. Manage your emotional state- Build rapport by matching the other person’s style, pace, and approach until you have achieved a ‘connection’. Personalize the negotiation by using “I” rather than your organization’s name. This demonstrates your belief in your proposal and highlights your credibility.

2. Look for quick mutual wins to build the belief “we can agree”- Seek to address the easy/quickest areas of agreement first to reinforce the process of agreement is simple and straightforward. If you discover an area where agreement may not be reached quickly, then agree to leave it until later.

3. Use active listening skills and ask questions to give you a greater understanding of the other person’s viewpoint- The goal of active listening is for you to hear and understand other people – their words, thoughts, and feelings, and to let them know you’ve heard and understood them. Acknowledge their motivations, feelings, and point of view, even when you don’t agree with what they are saying. Your goal is to understand the message, not judge the validity of what they say.

4. Build trust by negotiating fairly- Act with integrity and hold a healthy respect for the intentions of the individual you are negotiating with. There is always a reason why a point of negotiation is important to the buyer and if we can appreciate more about their underlying reasons, this knowledge can be used and acted upon.

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As an ag entrepreneur, how often do you negotiate? How do you feel about negotiating? Do you find these tips to be helpful? Do you have any other tips to make negotiating less stressful?

What does "local" mean?

No legal authority (including the USDA) has declared a definition for "local", so how do you define it? Maybe the best way is to use the definition most popularly used by consumers. In a recent study conducted by the Mid-Atlantic Specialty Crop Research Initiative at Penn State, 1,710 participants from the metropolitan areas of New York City, Philadelphia, Baltimore, Washington, D.C., and Richmond were surveyed on this very topic.

The participants were surveyed on what types of food products they purchased, where they purchased these products, and what factors may have affected their purchasing behaviors. They were asked to indicate their definitions of “locally grown,” in terms of miles from their residence and in relative terms of distance from their residence. The majority of participants (78%) defined “locally grown” as 100 miles or less from their residence, as well as 84% defined “locally grown” as within their state of residence.



Are these findings enough to develop a definition of "local" or does the government need to get involved? Vermont and Maryland have developed or are in the process of developing their own definitions. In 2008, the state of Vermont developed a definition for "local"; foods could be considered local if they were grown within 30 miles of the point-of-purchase or within the state of Vermont. The state of Maryland is in the process of creating an industry advisory group of growers, retailers, processors and consumers to come up with guidelines to define "local".

As an ag entrepreneur, how do you define "local"? Are you marketing any of your products as "local"? Does the government (national or state) need to create a definition? Do you think different state definitions will help or hurt marketing?

Wine consumption on the rise in the U.S.

In the midst of our country's economic recession, consumers have cut back on spending, but wine does not seem to be one of those cut backs. "The 2010 Wine Handbook" (which delivers analysis on wine consumption, consumer drinking preferences, and economic/demographic data) reports that overall wine consumption in the U.S. rose 0.8% to 297.0 million 9-liter cases.

The increase is obviously not a large amount, but in an economy where many industries are just trying to stay afloat, ANY increase is eye-catching. 2009 is not the only year that wine sales have increased in the U.S.; last year was the 16th consecutive year of growing wine sales. "The 2010 Wine Handbook" also reports that domestic wines are outselling imported wines. Domestic wine sales are up 1.8% to 222.7 million cases while imports dropped 2.2% to 74.3 million cases.

Eric Schmidt, Manager of Information Services for the Beverage Information Group (the publishers of "The 2010 Wine Handbook") predicts, "As the country recovers from the recessionary environment, the wine industry continues to look positive. We expect to see wine consumption increase to 310.7 million cases by 2014."




As a winery owner, how has the recession affected your business? Have your sales increased as "The 2010 Wine Handbook" reports? As an ag entrepreneur, has this article sparked your interest in adding wine to your product offerings (for example, a cheesemaker may partner with a winery to sell wine and cheese pairings)?

How will new Mexican tariffs affect U.S. ag producers?

A statement was released yesterday by the Mexican government announcing 10 new tariff items to be added to its original 99-item list released March 2009. Mexico has placed tariffs on certain U.S. ag products because it feels the U.S. isn't living up to its North American Free Trade Agreement (NAFTA) obligations.

The original 2009 list contained produce including cherry and apricots. Since the tariff was instituted, the Northwest Horticultural Council (NHC) reports that cherry and apricot producers in Idaho, Washington, and Oregon have lost about $25 million in revenue. The new list includes apples, grapefruits, and oranges. The NHC commented that, "Adding apples would be unfortunate and economically damaging. The reduction in pricing goes directly back to the grower, and it comes out of the grower’s pocket.”

Census Data shows that over $1 billion worth of produce and nuts were shipped from the U.S. to Mexico in 2009, up 45% from 2005 when the U.S. shipped approximately $748 million worth of these products.

Meat and cheese are also included in this new tariff list. Fresh cheese will be facing a 25% tariff, pork cuts will be facing a 5% tariff, and cooked pork rinds will be facing a 20% tariff. From January to June 2010, Mexico's pork imports were up 32% (totaling $261 million) as compared to January to June 2009.

The article "Mexico adds pork to tariff list" describes the affect the tariffs will have on U.S. ag producers. "Mexico is one of the biggest foreign customers for U.S. agricultural products, particularly meat, fruits and vegetables. Last year, Mexico imported U.S. pork valued at $419.6 million, second only to the $1.46 billion shipped to Japan, according to government data."




As an ag entrepreneur, do you export any of your products to other countries? If you export to Mexico, have you been affected by the new tariffs? If you export to other countries, are you afraid that these other countries will start implementing tariffs like Mexico?

Alerting customers about a new product, part II

I thought I would write another blog entry and continue suggesting ideas for ways to alert consumers about new products. Customers will need your ideas on how the product can be used. By developing a recipe that uses the featured product and place it near or attaching it to the package of the featured product, you may provide consumers with some inspiration. If you use newsletters to reach customers, be certain to include the recipe(s) to encourage repeat purchases. We talk a good deal about value-added processed products in this blog, but many of our readers may not have interest or facilities available to process raw items. Consider instead something that can be referred to as "value-added light." Select a recipe that lists the featured product as an ingredient along with a few other products you offer. Assemble the ingredients in quantities appropriate for the recipe, package together, and showcase it in a prominent place in your outlet.

Along with placing the recipe on the package, include a shopping list with items or ingredients that are needed for the meal but that you don't stock or sell. This way your haven't taken away all the work for consumers, compared to a completely processed product, but you have taken away the guess work as to what he/she will need to complete their meal. For example, do you produce or sell most if not all of the ingredients needed to make salsa? Can you assemble the ingredients you sell (tomatoes, black garlic, peppers, etc.) together and promote it with a recipe? Most likely there are several recipes you could use as the basis of "value-added light" products, again, even if you don't sell all the ingredients - just be sure to include the shopping list for the other items needed to complete the recipe.

Perhaps you have the space and labor available to provide consumers with a sample, either the item alone or in a recipe. Samples reduce customer risk. Why not allow them to try the item before they buy it? This helps reduce buyers’ remorse and may increase customer satisfaction with your retail outlet. Though "unmanaged" sampling, where the product is placed on tables alone and the consumer serves themselves is an easy option, think about the power of having an employee handout samples, recipes, guide the consumer to the shelf where the product is stocked, and provide additional information on how to use the featured product. You may see sales increase significantly.

Whatever strategy you choose, be sure to evaluate your return on investment (both monetarily and labor wise). Did placing more signs throughout the retail outlet that highlighted uses and benefits pertaining to the product increase sales? Did developing and publishing recipes or creating "value-added light" packages have a positive impact? Related questions could be developed for sampling and other promotions. Keep in mind that strategies that work for one product may not work for another and that more energy may need to be expended to encourage sales of more "unique" items compared to items that consumers can quickly identify a use for.

Research conducted to examine the purchasing behaviors of mid-Atlantic consumers

If you are a mid-Atlantic specialty crop producer, retailer, or wholesaler, you may be interested in checking out www.midatlanticspecialtycrops.com. Under the "Newsroom" tab, you will find multiple news articles summarizing 4 surveys conducted over the past year by Penn State. The surveys explore the produce purchasing behaviors of mid-Atlantic consumers.

1,565 total participants from the metropolitan areas of New York City, Philadelphia, Baltimore, Washington, D.C., and Richmond were surveyed on what types of food products they purchased, where they purchased these products, and what variables may have affected their purchasing behaviors. Issues addressed in the consumer surveys include labeling, children in the household, origin of farmers’ market produce, food safety, snacking, certified-organics, state promotional programs, locally grown, and natural.

Some interesting information gathered:
-The majority of participants (78%) defined “locally grown” as 100 miles or less from their residence.
-29.3% of survey participants selected farmers’ markets/CSAs as their primary source of produce when local produce was in-season.
-The majority of the participants (53.8%) believed that 50-99% of produce at a farmers' market was grown by the market farmers.
-The majority of participants who reported purchasing certified-organic fruits and vegetables either made these purchases 2 to 3 times per month (30.7%) or once per week(29%).

As an ag entrepreneur, how will you use the information from these surveys in your business? Do you regularly look for research like this to learn more about your customers? What other types of research topics would help you become a better entrepreneur and/or strengthen your business?

Alerting customers about a new product

I just finished reading my July issue of Produce Business, a publication that I find to be very helpful in discovering new products and learning about how supermarkets, grocery stores, and club stores merchandise new and established products, packaging, national promotional programs, etc. While flipping through the pages, I saw a picture of black garlic, something that I was able to taste at the 2009 Summer Fancy Food Show in New York City. On first glance, you might not find this product to be visually appealing. The bulb certainly looks like a garlic bulb you would find in a supermarket. Instead of a creamy translucent- looking bulb though, the contents are a dark black, almost charcoal-looking. Being someone who loves the flavor of garlic, I was pleasantly surprised to find, as stated in the Produce Business article, that the garlic tasted "milder and sweeter" than traditional garlic. The bold color could really add dimension to a dish.

I must admit that if not presented with the opportunity to try the garlic at the Food Show and hear about the various ways that it could be used (in place of or in addition to traditional garlic) I would have probably passed by without a second look. I'm sure that there have been instances where you have seen a new product or service and weighed the cost vs. the benefits that the item would have provided you. If you are a retailer or a wholesale grower who gets feedback about consumer response to products you sell in an outlet, perhaps you have learned about or witnessed consumers looking at or touching a new item that is offered but instead of placing it in their basket, they return it to the shelf. The consumer might not even know what the product is, how to store it, how to prepare it, and/or how to serve it. Attendees at the Food Show (most of whom are retailers, brokers, and others involved in the food industry) benefitted from some insight about the product. It is best that retailers consider the same level of promotion and education in their own stores.

What are some simple promotions that a retailer could implement whether it be at an independent grocery store, a farmers' market, on-farm market, or other?

-Signage that describes the item is one example and probably something you already implement. Do you describe the products flavor, how it could be used, and how easy it is to prepare? The idea is not to make the sign too busy with words and overload the customer, but rather pick three brief but informative points and include them on the sign.

-How about making the new product the "product of the week?" Add extra signs throughout the store to alert customers of the new addition.

-Product placement may also be something to consider. Keep the featured product near the other like items but also position smaller batches for sale near the register and other items consumers tend to purchase frequently.

Perhaps to get you started, visit a few retail outlets that appeal to your target customers and see how they are using signage and product placement. What works for them might just work for you.

Study analyzes traits of successful small business owners

If you are an entrepreneur or are thinking about becoming an entrepreneur, you know that there is a lot of hard work involved in being successful. A recent study by The Guardian Life Small Business Research Institute, a research center that studies small business owners and the businesses they build, surveyed 1100 small businesses (with 2-99 employees) and developed a list of 6 traits that seem to be prevalent in successful small business owners.

Traits of a successful business owner

1. Ability to collaborate- Small business owners will likely have strong customer relationships if they can build and maintain strong relationships with their management team and employees.

2. Being self-fulfilled- Successful business owners highly value "doing something for a living that I love to do".

3. Future-focused- Being able to plan well is a key to being successful. This includes both short-term and long-term planning.

4. Curious- Successful small business owners are constantly learning about how they can make their business better.

5. Tech-savvy- Investing time and money into a company's website and social media can make a small business more effective and efficient.

6. Action oriented- Bumps in the road are a good thing. Successful business owners find adversity helps them to constantly look for new ways of thinking and acting.




As an ag entrepreneur, do you feel that you posess all of these qualities? Do you think these traits are innate or do you think they can be learned? What other traits do you think are necessary for becoming a successful entrepreneur? If you are thinking about becoming an entrepreneur, do you feel that you possess all 6 of these traits? If you don't, do you think you can learn them?

Fast food vs "food fast": What is the difference?

Upon hearing the terms "fast food" and "food fast", most people think they are the same thing. According to an article posted on FoodBusinessNews.net, the two can be different. FoodBusinessNews.net describes fast food as quick-service, drive thru restaurants and convenience stores while "food fast" is food served quickly with a greater focus on ambiance. In the FoodBusinessNews.net article, "food fast" is described as an emerging trend. Consumers are looking for the convenience of a fast food restaurant with the menu options of a casual restaurant.

Technomic, a food industry research firm, explored this emerging trend in their "Status and Future of Fast Foods: Consumer Trend Report". Some of the things consumers are looking for include:
-the "upscaling" of limited-service restaurant formats
-the introduction of price-driven value elements into fast-casual restaurant menus
-the broadening of full-service restaurants' service formats to include convenience-oriented platforms like call-ahead and text/online ordering, home delivery, and curbside pickup.







An example of the of the "food fast" trend is the recent addition of "curbside pickup" at many big name casual restaurants. TGI Friday's, Applebee's, and Chili's all offer a program where diners can call ahead with their order and when they get to the restaurant, a server will bring the food to the diner's car. This service gives the quickness and ease of a traditional drive-thru restaurant, while still offering the menu selection of a sit-down restaurant.

As an ag entrepreneur, have you thought about adding any of the "food fast" elements to your establishment? Have your customers been asking for "food fast" options? If you already offer "food fast" options, how successful have these options been? Can you post some local examples of "food fast"?

Lessons Learned on Sabbatical Leave: Cash is King

I am (sort of) on sabbatical leave from my regular gig at Penn State.  I am working half-time at the Small Business Development Center (SBDC) at Penn State.  (So, I went all the way to the other side of campus.)  My goal is to enhance my educational programs with the experience of working closely with entrepreneurs on a regular basis.  I am keeping a journal of my activities/experiences many of which are simply empirical applications of what has been theory to this point.  (That is, I have taught it but haven't experienced as much of it as I'd like.)

Yesterday, I met with a business owner who has a great product that could be widely adopted within a certain industry. (All details must be withheld to maintain confidentiality.)  The business has received lots of funds from goverment and non-government agencies/organizations because the product has a strong probability of succeeding.  Lenders have also supported the business because there is a good probability of a large payout in the not too distant future, but all of that might go unrealized if they can't cash flow the operation.

This particular business, like many others, operates on tight timelines with respect to managing cash flow.  Expense payments are scheduled around expcted receipt of funds from invoices, operating loans, etc.  If those funds come in late, then expenses (including payroll) might be late.  While some employees might be willing to wait a day or two for a paycheck, they probably won't be happy about doing that on a regular basis.  Suppliers might choose to reduce credit availability if there is a history of late payment.  Overall, it's just bad for business to get out of whack on cash flow.

Entrepreneurs MUST plan and manage their cash flows closely.  As the gas that keeps the engine running, you don't want to run out of cash before you reach that profitable destination.

Selling your ag products to the Muslim market

As an ag entrepreneur, there are many, many different niche markets to explore. Religious beliefs can play a big part in product choices for many Americans, and you as an entrepreneur may see this as an opportunity to market your product. According to the article "Tapping the Growing Muslim-American Market", Muslim-Americans are an under-served audience.





There are an estimated 6 to 8 million Muslims in America with an estimated market value of about $200 billion. When purchasing products, a major concern for Muslims is Halal certification. Halal means "what is permitted" in Arabic and can include food as well cosmetics,personal care, and cleaning products. Muslims may only consume goods and services which are Halal. Some estimates show that 70% of all Muslims worldwide follow Halal principles. To learn more about what Halal means and how to obtain Halal certification, please download this publication.

Lisa Mabe, principal of Hewar Social Communications, a digital marketing agency in Washington D.C., describes marketing to Muslim-Americans. "When companies target the Muslim community in their marketing communications, we see them flock to engage with that brand -- not only to purchase its products, but to become loyal brand advocates."

As an ag entrepreneur, are you looking for new niche markets? Have you explored marketing your products to Muslims? If you currently market to Muslims, how would you describe the Halal certification process? Has Halal certification grown your customer base?

Can new packaging get customers excited about your product?

Pizza boxes are pretty much the same no matter what restaurant you go to. A new design though may change people's view of the "standard pizza container". A company called Environmentally Conscious Organization, Inc (ECO Inc) has developed a pizza box that can be broken into 4 plates and a leftovers box. The video below shows how this box, better known as the GreenBox, is used.



The GreenBox hasn't yet hit the market, but it has already gotten many people excited. In April 2009, asylum.com posted an article about the GreenBox. According to digg.com (a social networking site that allows users to bookmark websites and send them to friends), the GreenBox article has been Dugg (or shared) more than any other article in the history of the site.

As an agricultural entrepreneur, have you changed (or thought about changing) your packaging recently? How has this affected sales? Have customers asked for more eco-friendly packaging? If there was a great social media buzz about a new type of packaging available for a product you produce, would this affect your decision-making in packaging choices?

As a consumer, do you think the GreenBox is an innovative design? Would you like to see more packaging designed like this? Would you choose a restaurant specifically because they use GreenBoxes?

Selling your product/service online, part 2

Continuation from last week's post...

By selling through your own website, you can forgo the sales commissions, but you will need to set up the actual online store. You can do this by using free, open source e-commerce software like Zen Cart or Pretashop or you can hire a web developer to do this for you. Setting up an e-commerce system does take some technical skill, so if you don't feel comfortable doing it yourself, hire a professional (keeping in mind that a web developer may charge $50-$100+ per hour).

If you currently accept credit cards at your brick and mortar store, your credit card processor can most likely also process your online sales. If you don't have a credit card processor, look into services like Google Checkout and Paypal. These services are very easy to use and implement on your site, but also be sure to compare their transaction costs with traditional credit card processors.

Once you have considered the costs of processing payments, you will also need to consider shipping costs. Rates can vary significantly between shipping carriers. Be sure to research prices and services including shipping insurance. Also, ask each shipping carrier if they provide free shipping materials. By using a free box provided by the shipping carrier instead of buying boxes yourself, you may save $1 or more per shipment.

Since you (or an employee) will be spending a good deal of time at your computer once you start selling online, there are some equipment issues to consider. Is your computer able to handle your ordering system? Having a slow, outdated computer can lead to ordering system crashes and lost orders. When choosing a new computer, be sure to also buy a large monitor since you will be looking at it for long periods of time. When packaging your products, you will need a laser printer to quickly and professionally print packing slips (as well as sales reports for your own records), a scale for weighing packages, and a label printer for printing postage.





As an agricultural entrepreneur, have you started selling your products online? If yes, how has selling online changed your connection to customers? Have online sales affected brick and mortar sales? If you have not considered selling online, what has stopped you?

Selling your product/service online, part 1

Last week, Sarah blogged about mobile marketing and the role smartphones have in purchasing decisions. If you have explored or are already using mobile marketing, you are probably also interested in selling your product or service online. In a February article on openforum.com, author Gregory Go ("8 Financial Considerations of e-Commerce") discusses what you, the entrepreneur, will need to think about if you want to start selling online.

Your selling price is very is important in your online marketplace. Customers can comparison shop within seconds, especially with retail giants like Amazon. If you are unable to compete price-wise with other retailers, you aren't necessarily out of luck. Become a niche seller that specializes in one product category. Provide excellent customer service and customers will come back to your online store for your specialty. For example, a honey producer who sells her honey for $10/jar can't compete with Amazon who sells a 12 jar case for $30, but she can market her online store as a gourmet honey specialty shop. She can provide her customers with photos of the honey being harvested, and offer unique flavors like lavender and key lime. If you are able to compete with the prices of the retail giants and want to be selling in a large marketplace (Amazon and Ebay for example), you will need to budget for sales commissions which may be 10% or more.




I'll continue blogging about selling online next week!

Supermarkets & Farmers Markets - An Opportunity to Work Together?

The following note from The Lempert Report was shared by a colleague after a recent discussion that several of us had while discussing opportunities for farmers selling their products locally. The text of The Lempert Report follows.

Do Farmers' Markets Grow On You?

Supermarkets ought to stop looking at
farmers' markets as quaint gatherings of like-minded growers that appeal to a
segment of buyers who want their produce fresh, fast and local. They should also
stop looking at them as competition to their own showpiece departements.

Rather, by hosting farmer's markets in
their parking lots or other adjacent spaces, they could project a fairly
unassailable image of wholesomeness, of having high regard for local food
sources, and respect for their shoppers - who might just become more prone to
buying more dressings, accompaniments and center-plate foods inside the store to
accompany their earthy scores of fruits and vegetables.

Better still, we believe at The Lempert Report,
if a supermarket with the right physical setup were to schedule these as regular
branded events, they'd draw increasing traffic and motivate farmers to become
regulars too. Imagine all that face time for growers to cultivate customers, and
with no need to open their own physical store or give up a percentage to a
distributor. They do need to pay something, and they do. According to the Los
Angeles Times, vendors at a popular Hollywood farmers' market pay 6.5 percent of
their sales as rent to the market, and "many of the 100 produce stands take in
about $400 on Sundays, while a few make as much as $2,500."

Should supermarkets shun their potential to build
buzz and a rental revenue stream with such events? We think not, since consumers
are looking to eat healthier, and they often like to support local
grower-entreprenerurs. Moreover, celebrity farmers bring co-branding
opportunities, as do restaurateurs who might be inclined to organize themselves
to ensure their supply of quality produce, such as the Batali-Bastinanich
Farmers' Market in Las Vegas.

Think about Ralphs, Bruno's, Stew Leonard's and Balducci's, and realize
these stores attained celebrity status because their namesakes knew food well
and were credible to their customers. The Lempert Report believes it is
absolutely possible that with nurturing branded or co-branded farmers' markets
could experience similar local and regional successes.

If you're a farmer or food entrepreneur, is there an opportunity for you or the farmers' market you participate in to approach a local grocer about partnering in a fashion similar to that described above? They may already be considering such possibilities and this would be a perfect opportunity to demonstrate willingness to work together, demonstrating shared values to local consumers. If groceries in your area haven't thought about partnering, this note provides several points that can be used to illustrate the advantages for both them and you.

Mobile Marketing?

Food Systems Insider today had an interesting commentary regarding the role smartphones play in consumer purchasing behavior. Smartphones, such as Blackberries and iPhones, allow users instant access to all sorts of information.

Many social networking sites also have applications allowing people to access their accounts through their phones. A consumer with a smartphone can let their friends know where they are through foursquare, send a tweet and post a status update about their experience, and post pictures of a product they purchase to Facebook and Twitter.

With the continuing rise in the use of smartphones and the possibilities they offer for connecting with consumers, mobile marketing is yet another facet that ag entrepreneurs should consider as part of their marketing and PR strategies.

Check out the article via the link below.

Got milk? Check the smartphone

Motivating the media to cover your business

Positive media coverage isn't an easy thing for a business owner to get, no matter if you're brand new or have been in business for 30 years. Reporters are very busy people and may have already ignored your past attempts to get their attention, but don't give up. Positive media coverage can help reach new customers- and the best part is that it's free advertising.

How do you get a reporter to notice you? Two articles ("The Do's and Don'ts of Pitching Your Small Business to a Reporter" by Joe Pompeo and "How to Get the Media to Cover Your Business" by Ann Handley) recently published on openforum.com discuss how business owners can get the attention of a reporter. By creating a relationship with a reporter BEFORE asking them to publicize your business, you may get preferential treatment when you ask for media coverage later. To develop this relationship, Handley suggests using Facebook, Twitter, and LinkedIn to interact.

When you are ready to ask for media coverage, it will be very helpful to have a press release already written to give to the reporter. You will need to write a press release about what your business does and why it is of interest to readers, but avoid lofty quotes and jargon because these may be perceived as exaggerations and therefore thrown out, says Handley. For example, don't write like this: “By maintaining an open dialogue with our consumers through an intense, year-long collaborative and strategic project, we’ve offered them an opportunity to leave their imprint on a legacy brand they truly love, have solidified an even stronger relationship with fans, and are delivering a more efficient dialogue.”

You don't have to be a news reporter yourself to create an interesting press release. Follow these 8 steps Handley describes in her article:

1. Know the publication and what types of articles they run.
2. Have something worth sharing.
3. Provide a news hook.
4. Write a descriptive subject line.
5. Get to the point.
6. Avoid bloat. Present the facts.
7. Be human. Reveal the personality of your company through the tone and language you use.
8. Speak to your audience, not your client. Sell the story, not the company.










As an ag entrepreneur, how have you gained media attention? How has media coverage affected your sales?

The effect of seed prices on food production

When shopping for groceries, I would imagine few people associate the price of an item w/ the cost of the materials needed to grow the ingredients. Most would probably associate the cost of their grocery items coming from labor and transportation. Unfortunately, we as consumers may be seeing higher prices at the grocery store not because of rising labor and transportation costs, but because of rising seed prices.

In an article from the LA Times, reporter PJ Huffstutter explores why seed prices are rising. The farming industry produces more than $80 billion worth of soybeans and corn annually with seeds costing about $17 billion in 2009, up 56% from 2006. In the article, Huffstutter describes farming for the Leake family who owns a soybean farm in North Dakota. The Leakes state that the availability of seed suppliers has greatly diminished from 50 about 10 years ago to now only 4 seed companies in the area. The reason for the dwindling number of suppliers is that a few companies have bought out all of the competitors, leaving many farmers to complain of unfair competitive practices by the few, giant seed suppliers left. Bill Wenzel, national director for the Farmer to Farmer Campaign, supports this statement saying that the number of independent seed companies in the U.S. has shrunk from 300 to less than 100 in the past 10 years.

Fifty percent of the world's proprietary seeds for major crops come from only 4 companies; the leader being Monsanto Co. In a 2009 report by Farmer to Farmer, 92% of U.S. soybean acres and 85% of U.S. corn acres are grown with Monsanto seeds. By having such a large hold on the seed market, Monsanto has been accused of unfair marketing practices. The Leakes report that in 2000, a bag of Monsanto Roundup Ready soybean seeds cost $17, but today has increased to $50 (an increase of 294%). The U.S. Justice Department is currently investigating Monsanto's "market dominance to undermine rivals and raise prices", reports Huffstutter.



Disclaimer: I am not bad-mouthing Monsanto or any seed company. I am only trying to bring issues to the table that affect farmers.

As a farmer, how have seed prices affected your bottom line? Do you think the major seed companies are reaching oligopolistic market shares? Do you think seed prices will ever decrease even after the government steps in?

Getting turned down for a business loan

As we've mentioned many times in this blog and our other educational channels (like farmbusiness.psu.edu, Extension courses, educational materials, etc), you must have a well-developed business plan BEFORE applying for a loan. What should you do if you've prepared a business plan but still get turned down for a loan?

In an openforum.com article, author Trent Hamm discusses what you should do if you're turned down for a loan. First, ask your banker for honest feedback as to why your loan was denied. If you are told some not-so-positive things about your plan or idea, DON'T TAKE OFFENSE. You are of course very passionate about your business idea and may not be able to objectively see flaws. It's better to get honest constructive criticism and make changes now than in 2 years from now when your business is failing. Take all of the feedback and arrange it into a checklist so that you can update your business plan accordingly. You may also want to practice your presentation skills by joining a club like Toastmasters. By improving your speaking skills, you may be able to present your idea more clearly with to banker.

What if the problem isn't with your idea or business plan? It could be possible that your bank is having cash flow problems and might not be able to make the loans it normally would. Research other banks and ask your banker to recommend another bank that may be able to help. Whatever the reason, be sure to stay positive. Being told "no" doesn't mean that your dream can never happen. You will most definitely see other major road blocks in your journey as an entrepreneur, so be sure to view this as a learning experience and not a failure.


As an entrepreneur, have you ever been turned down for a loan? Did you ask for feedback on why you were denied? Did you use the feedback to improve your business plan and then reapply for the loan?

Good to Great: Pushing on the Flywheel Requires Focus

It’s been a while since I blogged about Good to Great, but one of the concepts has been really hitting home recently. In the book, Collins relates much of the work done by the good to great companies to pushing on a flywheel. They settled on a goal and then persevered until they achieved it. He relates this to pushing on a flywheel when at first nothing at all seems to happen. After many pushes, it starts to move, almost unnoticeably. After pushing a lot more, it starts to spin pretty well. The great companies keep pushing until it spins almost on its own so that additional pushes serve only to keep it going.

In some respects, the cliché “Don’t give up” might summarize the flywheel concept. They aren’t parallel concepts, however, unless you are doing the right things to push on the flywheel. Sometimes, you may need to step back and switch tactics before pushing again. It becomes easy to stop pushing when results aren’t readily seen or when they aren’t as good as we think they ought to be. It might be tempting to change directions or simply quit pushing. However, it is important that we continue to push toward the goals in our plans. Don’t grow weary. Don’t get distracted. Don’t pull the plug unless new information indicates that you should. Keep pushing on your request for zoning variances, on your target consumer market, or on your employees to improve. The disciplined persistence will almost always pay off. Indeed, that is exactly what frequently differentiates the successful and unsuccessful businesses.

A former student’s experiences clearly bear out my point. She has worked for years to convince the ownership and management of the family business to make a significant change in how they market their products. She planted the thought maybe 10 years ago, arguing that commodity production wasn’t going to be as profitable as direct marketing their products. Over time, the family transitioned more of their produce into their farm market and diversified their production. They then brought on expertise in marketing to make the farm market even more successful. Other family members got involved in marketing, not just in production. This approach served the business well as residential neighborhoods popped up around them, gobbling up land that had been in farms like theirs. She viewed these new homeowners as potential customers.

She’s still pushing! They are working with zoning authorities to gain approval on a new market, where more products will be sold. The family plans to expand the bakery enterprise as well as some of the traditional types of products they have grown. Pushing is getting easier as family members and employees buy into the vision and success builds on success. That’s the whole concept.

Although pushing on your flywheel can get tiring, keep doing it. The rewards are worth it.

Adding charitable activities to your marketing plan

Your marketing plan is a living document. Customers' wants and needs from the businesses they purchase from is constantly changing, so you as a business owner will need to accommodate these changes or risk being left in the dust by your competition. Many customers are now looking beyond price and selection in choosing a business to meet their shopping needs. The values of a business can make or break a sale.

Customers are looking for businesses who regularly participate in charitable giving. This can be through product donations or money. Why is charitable giving a hot topic for buyers? It may be because of recent economic problems like corporate bailouts. The thought of employees losing their jobs while CEOs pull in million dollar paychecks has left a sour taste in the mouths of many consumers. Consumers are looking to spend their money at businesses that are not just out for profit, but are instead looking to help their community. Some examples:
1. As a jelly maker, you advertise that 30% of the profits from your newest flavor will be donated to a local animal shelter.
2. At your farm market, you advertise that on Tuesdays, 10% of all profits will be donated to pediatric cancer research.
3. At your bakery, you advertise that any unsold bread will be donated to your local food bank.

To help alert charity-conscious consumers about your giving, try using social media. Twitter and Facebook are great outlets for this. Post regularly about what will be donated and the charities that will benefit from your giving. Also, ask the charity that you are giving to to also post about your business's charitable activities. There are even services available to advertise charitable businesses, like HelpOT (www.helpot.com). HelpOT's mission is to bring together businesses and advertise their charitable activities using social media. Each city has a Twitter account and posts about local businesses. (Right now, HelpOT is only available in Austin, Chicago, New York City, San Francisco, Orange County, Dallas, and Los Angeles, but check back often for info about your city.) All participating businesses can post to this Twitter account and talk about their charitable activities. Customers can then see all of the charitable activities taking place in their city.



As a business owner, has your business participated in any charitable activities? If so, has this increased sales? How did you advertise?

"Grow your skills, grow your market" program

In December of 2007, Penn State Extension Educators John Berry and Bob Pierson conducted needs assessment surveys of 61 farmers’ market managers in South-East Pennsylvania. What they found in analyzing these surveys was a strong desire for more and better networking and educational programming addressing small market managers. In 2009, Penn State Extension Educator Peggy Fogarty-Harnish visited 15 farmers markets throughout Lancaster and found similar desires to those in Southeast Pennsylvania. This discovery broadened the scope of the program from Southeast Pennsylvania farmers’ markets to a more state wide focus group. These efforts led to the creation of the “Grow your Skills, Grow your Market” program offered by Penn State Extension with support from Chester County Economic Development Council. Each year, specific topics of interest will be identified and corresponding and relevant speakers will be found to participate in the program.

This year, the program started at Lancaster Central Market—named by the American Planning Association as one of the top 10 Great Public Spaces in 2009—on March 30 at 8:30 A.M. After the treasure hunt led by Linda Aleci from the Franklin & Marshall Local Economy Center, the program moved to Southern Market Center for networking and workshops. In all, there were 68 attendees representing multiple cities including Harrisburg, Allentown, Phoenixville, Philadelphia, Carlisle, Hershey, Quakertown, and West Chester. Other workshop presenters included Carolyn Shelby, USDA Electronic Benefit Transfer Coordinator for Mid-Atlantic States, and Susan Richards, Capital RC&D Area Council, who together presented a workshop on obtaining EBT capability at your farmers’ market. Nicky Uy from The Food Trust talked about recruiting producers and vendors before lunch was provided featuring foods from Lancaster Central Market. Linda Aleci returned after lunch to talk about the great features of Central Market and then turned it over to John Berry who discussed food safety. After a break for networking, Carmen Humphrey from the USDA/Farmers’ Market Promotion Program closed out this year’s “Grow Your Skills, Grow Your Market” with a workshop on promoting and paying for a farmers’ market.

Fogarty-Harnish says this year’s program was very interactive and promoted peer to peer learning, while also leaving plenty of time for Q&A sessions. This program is particularly relevant today because of the recent growth in farmers’ markets due to consumer awareness of healthy eating, supporting the local economy and food safety. “It is definitely a consumer-driven development,” says Fogarty-Harnish, “and the downtown areas and boroughs see the benefit of local farmers’ markets to community economic development.” There is a local desire to keep the food dollar in the community and it seems the downtown areas and boroughs profit from the markets due to an increase in sales owing to the increase in consumers frequenting those areas.

Farmers’ markets are complex businesses. There are a lot of issues involved including food safety, regulations and permits, marketing and research, and the struggle to help low-income families have access to the products. A lot of markets are volunteer, which means that there is a lot of turnover from year to year. Fogarty-Harnish says that there is “an emerging professional development needed to strengthen and sustain markets over time.” With the help of this workshop, we can look forward to an even more successful future for farmers’ markets.

If you have any questions about “Grow Your Skills, Grow Your Market” please contact Peggy Fogarty-Harnish at (717) 394-6851 or at muf17@psu.edu.

By Dawn Gannon (dmg5096@psu.edu), Penn State Extension Writer/Intern

Is farming in the Great Plains in grave danger?

Farming is a top industry in the Great Plains, but it may see a major obstacle in the near future. Most of the water used in the Great Plains comes from the Ogallala Aquifer, a 174,000 square mile underground lake. This sounds like a huge amount of water, but as the primary source of water for farmers in the Great Plains (and the sheer size of the land known as the Great Plains), the Ogallala is draining at a shocking rate. Over 90% of the land in the Great Plains is used by farms and ranches, and 75% is cultivated (from the US Global Change Research Program www.usgcrp.gov).





States like Texas have implemented controls on the amount of water farmers can pump, but these rules are only delaying the inevitable. The Ogallala is refilling at such a small rate, experts consider it negligible. In a recent article for AOL news, David Brauer, program manager for the U.S. Department of Agriculture's Agricultural Research Service Ogallala Aquifer Program, said, “All we're doing is buying time.”

If the Ogallala dries up, what effect will it have on the Great Plains? Brauer also commented that, “We're talking about, for the last 20 years, 20 percent of the irrigated acreage of this nation is over the Ogallala." The Great Plains produces such a large amount of the grain that the any major reduction in the amount of grain produced would devastate the world’s grain supply.





For farmers: What do you think?
To prepare for the inevitable end to the water in the Ogallala Aquifer, farmers are developing dry-farming techniques and are hoping for the biotech industry to create drought-resistant crops, but will this save the farming industry in the Great Plains? Have you had water issues in your area? What would you do if your farm was facing a future like that of the Great Plains?

For value-added ag product producers: What do you think?
If your product(s) contains wheat (or any other commodity produced in the Great Plains), how will you adapt if there is a shortage of your needed commodity?

Foursquare: What's in it for businesses???

I started playing around with Foursquare (http://foursquare.com) today. It's the latest in a line of social networking applications that I've toyed with. If you know me, you know I love Facebook and Twitter for their business applications. But this one's pretty different. For details, see their website, but here's a quick overview.

The core functionality of Foursquare allows you to "check in" (all quoted terms indicate Foursquare jargon) at various "venues" (which you can add if none exists) all around the world. As you check in, you earn points (which don't lead to tangible rewards at this point) and badges as recognition for your travels. At each venue, you can add a public note indicating either something "to do" or some sort of "tip." If you're the lucky person who has visited a venue more than anyone else, then Foursquare declares you to be the mayor of that venue. Within Foursquare, you can also generate lists of friends, similar to those on Facebook.

Business Applications
So, what's in it for you as a business owner? On their website, Foursquare provides you the opportunity to list "Mayor Specials," deals you might give to your most loyal customers, inclduing your "mayor." They also provide other suggestions such as a free drink to every 10th person. Foursquare provides a new way to gauge customer loyalty as indicated by the number of times they check in to your venue.

It also provides a way to assess who is checking in at your venue. I added my office building as a venue (see http://foursquare.com/venue/2471432). If you find that venue online, you will see all who have visited it, the number of unique visitors, etc. (A better example might be the Statue of Liberty; see http://foursquare.com/venue/19273.) As an owner you can get to know your customers in this way. Keep in mind, of course, the demographics of who might be using Foursquare and whether or not it's consistent with your overall demographics. It may not be the best tool for true market research.

An owner might also have a lot to learn from the "tips" or "to dos" left on Foursquare. Some might provide insights into how to serve the customer better. Because it's so early, it won't take a lot of time to catch up on comments and respond to them.

With some ingenuity, Foursquare might allow a group of cheese makers to offer artisan cheese tours and to provide a reward for all who have checked in at the participating stops. The same concept could apply to other types of farm or food markets. Like every other type of social networking tool, the true power lies in the applications generated by its users.

Your Chance to Respond
What do you see as the business benefits of Foursquare?
How might businesses use this tool to connect with customers?

Learn More
I found a couple interesting blog posts...
http://www.convinceandconvert.com/mobile/ignore-foursquare-at-your-peril/
http://www.joemanna.com/blog/foursquare-marketing/

Establishing a business in a “saturated” market

If you are thinking about becoming an agricultural entrepreneur, you are probably thinking about what product or service will set you apart from the competition and excite customers. You don’t want to go into business selling the exact same thing as the competition. For example, coffee shops are everywhere, especially with the Starbucks boom in the 90’s, so one would think that there is little room for another coffee chain, right? The owners of Stumptown Coffee Roasters are trying to break the mindset that the coffee market is already saturated with coffee providers.

An article in March’s Time magazine describes Stumptown as a unique type of coffee shop. One way Stumptown differentiates itself is by buying single-origin beans (the New York Stumptown plant offers more single-origin beans than any other coffee provider). When you purchase coffee from Stumptown, every bag is labeled with the elevation, location, varietal, tasting notes of the beans it contains, and a profile of the area as well as technical information.


Video about Stumptown

Stumptown is also trying to change consumers’ view of coffee from a commodity like sugar and corn to a luxury item like wine. As such, coffee is similar to wine in that it has seasons and varietals. In the article, Duane Sorenson, founder of Stumptown, describes why Stumptown is different from the competition. "We started Stumptown with the idea of getting to the source. That was the concept, and that excitement is what we wanted to bring to our customers." Of course, premium products require a premium price. Sorenson explains, "The first day we opened [in 1999], we weren't in the position to pay what we do for a pound of coffee. But within a few years, people tasting our coffee experienced it as they never had.”

Article
So what is the moral of this story? Even in an industry that seems saturated, there is always room for an entrepreneur to come in and offer a product in a way the customer has never experienced. You must thoroughly research and define your target market. For example, Customer A buys their coffee from the local gas station, Customer B buys their coffee from Starbucks, and Customer C buys their coffee from Stumptown. All are selling coffee, but each has a specific target market that they cater to. When developing your business plan, don’t overlook this crucial information! To get help on defining your target market, contact your local Extension office.


As an agricultural entrepreneur, how have you defined your target market? How did your research help you to differentiate your product from the competition?

Rewarding your employees when money is tight

As an entrepreneur, you need to always be mindful of your expenses (no matter what the economic conditions might be). Hard-working, trustworthy employees are one of the most important elements to a successful business. Obviously, you want to reward your employees to keep them motivated and dedicated to your business, but how can you do that if your budget won't allow it?

Praise is a simple way you can reward your employees (and it's free!). In a recent article on bnet.com (a business management site), Bob Nelson, a workplace consultant who has advised Fortune 100 companies on the use of praise, explains why employees need praise. "The only time you hear from the boss is when you made a mistake. And bosses think they don't have to do this because you're lucky to have a job now. People need it more but tend to get it less." Nelson's book "Keeping Up In a Down Economy" describes how managers and business owners can change their mindsets into acknowledging a "job well done". The key is to acknowledge the accomplishment as soon as possible by writing an email or note, making a phone call, or telling the person face-to-face.

However you decide to deliver your praise, you must be diligent in the words you use. In the book "The People Keeper: How Managers Can Attract, Motivate and Retain Better Employees", author and employee-retention consultant Mark Holmes says that it is very important to find specific qualities to show that you are truly sincere in your praise. Holmes suggest saying things like, "The thing I appreciate about you Joe is you're consistent," or "Suzie, you are great as a mentor with our younger employees." Holmes also stresses that praise, not money, inspires employees. "Money isn't inert. A few thousand here or there isn't going to be the reason you leave a job. What's important is how you feel about how you're fitting in, producing, contributing as part of the team, all non-monetary issues."

Praise article

As an entrepreneur, do you regularly praise a good worker? If you do praise your workers, do you think this has helped retention? Besides money, are there any other types of rewards that you think motivate employees?