Thursday, April 25, 2013

Finding Local Foods on Your Next Road Trip

As you're driving down the highway on your next road trip, take a look at the signs advertising what food options are available at the next exit.  Almost all of the food options are fast food.  Obviously, fast food is convenient and predictable, but what if you want to eat something different?

SHFT, a multi-media platform company, recently released a smart phone app called Food Tripping to help consumers locate local foods (watch the video below for a brief summary).

Food Tripping uses GPS to locate local restaurants, juice bars, farmers’ markets, microbreweries, etc.  Users can search by location, name, popularity, and category (see Image 1).  Each listing gives the address, phone number, category, website, directions, and "sharing" capabilities (via email, Facebook, and Twitter).  You can also view a list of past businesses you've visited when you "check-in" or "add to favorites".  Think of it as Foursquare just for food.

Image 1.  Food Tripping app displaying farmers' markets in the St. Paul, MN area.  Photo from
As an ag business owner, how will this new app help you?  This sounds like another great way to bring new customers to your business without any cost to you.  The app is free (available on iPhone and Android devices) and anyone can make a free listing for a business.  All you need to do is click the "suggest" button and fill out a very short form with your business's info.  Once approved, your business will be listed in your area.  Why not take 5 minutes out of your day to create a listing and get some free advertising?

As a consumer, would you use an app like this to visit a food business in a town you're unfamiliar with?  As an ag business owner, have you listed your business on other apps (like Foursquare)?  Has your listing attracted new customers?

Thursday, April 18, 2013

US Ag Exports at an All Time High

Last week, the USDA released some wonderful news about agricultural exports.  From fiscal years 2009 to 2012, $478 billion in US ag products were exported, the highest 4 years in history.  Even better, 2013 is expected to break this record.

In a blog post by the USDA, these record-breaking sales were highlighted with a few examples.  2012 was the first year ever for China to reach an agreement with the US to accept shipments of US pears.  In this short time since the agreement was reached, China is expected to become one of the top five importers of US pears in just 2 seasons.  

Ship carrying containers full of US exports overseas.

Also, the Foreign Agricultural Service (FAS), Agricultural Marketing Service (AMS), Food Safety and Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the US Food and Drug Administration (FDA) are collaborating on a certification program for exporting processed eggs and egg products like omelets, frozen egg patties, crepes, hard-boiled eggs, and mayonnaise.  These new market opportunities could reach an estimated $500 million in sales for producers.  

If you are an ag entrepreneur and are interested in exploring export opportunities, it's imperative that you DO YOUR RESEARCH as you would with trying any new opportunity for your business.  Some important questions to think about:

  1. Is there market demand for my product internationally?  Read about conducting market research in The Guide to Farming.
  2. Would I need to alter my product at all before selling it?  For example, think about local tastes, package/portion size, and religious cultural beliefs  (like Halal or Kosher certification) that might deter future customers.
  3. What laws do I need to follow in order to get my product exported?  Check with your state for more info about this.  Here is info for Pennsylvania producers.
As an ag business owner, do you currently export any of your products?  If so, to what countries?  Do you have any important observations about exporting?  If you are not currently exporting, have you ever thought about it?  Why or why not?

Thursday, April 11, 2013

Is Smartphone Usage Hurting Retailer Sales?

For those who own smartphones, you know how easily you can use one to compare prices.  This practice, known as "showrooming",  is great for customers' wallets, but hurting sales at brick and mortar stores.  A store in Australia specializing in gluten-free items has taken a rather extreme measure to prevent showrooming.  The store is charging anyone who comes in the store a $5 "just browsing" fee, which is returned if the customer buys something.

Charging customers a fee to look around your store is definitely an extreme measure to prevent showrooming.  You can expect this to anger potential customers, so I would not suggest going such an extreme route.  But what can you do to curb showrooming?  First, it's important to understand why consumers are using their phones.  In a survey conducted by Perception Research Services International, 53% of consumers use their smartphones to compare prices, read customer reviews (49%), check for sales/coupons (48%), and searching for product information (48%).  Consumers want to know they're getting a good product at a fair price.  For example, Target monitors competitors' prices on 30,000 products to be competitive.  They also recently introduced a policy that will match online competitor pricing.  

Grocery customer using a smartphone to compare prices.
In the article "Showrooming, Not Online Transactions, Is Real threat To Grocers", experts report that less than 5% of customers actually use the price match policy; it's more so used to gain customer trust in pricing.  CITI Research explains that "“the most successful retailers are developing a fundamental understanding of the difference in order to avoid a race to the bottom as some have feared with online price matching.” 

As a food retailer, do you see a lot of customers using their smartphones while shopping?  Do you actively compare your prices with online retailers to stay competitive?  Do you offer a price matching policy?

Friday, April 5, 2013

Starting a Farm? Get Prepared!

by Lynn Kime, Sr. Extension Associate

When beginning any new enterprise, many decisions need to be made prior to planting or purchasing the first animal.  These decisions require research and developing an enterprise budget to be sure the venture will be profitable.  Depending on the scope of the enterprise, a business plan will assist with the decision making process, especially if this is your first venture into production agriculture.  To make the transition easier, think about what you have a passion to do.  Having a passion for the production makes the entire process more enjoyable.  A list of topics to consider prior to beginning include:
  • Marketing
  • Production
  • Harvesting and storage
  • Risk management
  • Environmental regulations
  • Where to find information
 Before beginning any production, you need to know if there is a market for what you plan to produce and where that market may be.  Another marketing decision is whether you are going to market wholesale or retail.  Wholesale marketing may be the easiest, but may not provide enough income to sustain your enterprise.  Retail marketing will take more time to develop as you will need to develop relationships with potential customers or find a farmers' market that has enough traffic to market you production.  One recommendation is to start small and grow into your market.

There are usually several production options for any livestock or crop you plan to produce.  For example, if considering producing beef cattle, will you raise grass-fed or a more conventional grain and hay program?  For horticultural crops, will you use plasticulture or be organically certified?

Do you have the time to produce and harvest what you plan to produce?  Even one acre of some crops requires 30-40 hours to harvest and many more to produce.  The production will need to integrate into your proposed schedule.  Also, will you need to store a portion of the crop prior to marketing and do you have these facilities?

Any production contains risk.  You are at the mercy of the weather, markets, and inputs that you cannot control.  There are insurance products you can take advantage of to help alleviate some of these concerns.

All municipalities have regulations that may impact your plans and production.  The first step for you is to contact your local municipality to determine if what you are planning fits into their regulations.  Another place to visit is your local Conservation District office to see if there are any environmental regulations that will impact your plans.

Penn State's Agricultural Alternatives publication series is an excellent place to start your research into a new venture.  There are now 64 publications in the series and we cover many topics targeting the small-scale and part-time farming community.  These publications are between four and twelve pages long and any topic covering production of livestock or crops has a budget included.  The publications are not in-depth production guides, as indicated by the length, but are designed to allow the reader to make a better informed decision about the potential of the enterprise.

We have an extensive listing of livestock, fruits, vegetables, and farm management publications.  The farm management publications cover business start-up, business planning, marketing, and risk management topics.  These should be viewed first when considering a new farming venture.  The information contained in these publications is necessary when starting a business.  They will guide you through the process of the new venture and provide the information to allow you to become successful.  There is also a section covering where to find much more in-depth information into the topic covered.

You can access these publications here.  There is a link to a PDF file for easy printing on the web pages that do not link directly to a PDF.  I encourage you to check out the website and discover what the project has to offer.  By using these publications and the included budgets you will be better informed about the time, capital, and equipment needed for the enterprise; all issues you need to consider when starting a new venture or enterprise.

Tuesday, April 2, 2013

Research First, Act Second

by Michelle Kowalewski, Penn State Extension Educator, Susquehanna Co.

I recently received a call from a local dairy producer who is currently in business with his father.  His father plans to retire from the business in several years and the son would like to explore options with beef cattle production.  The reason for his call was to find our more information about certified organic.  The producer was very unfamiliar with the process to become a certified organic operation, but this is where his research began - by asking the question!  Whether you are already in an agribusiness or just looking to develop a business, it's important to research your industry.  Ask yourself the following questions:
  • What products and/or services should I consider?
  • What will it take to start this business enterprise?
  • What is the current economic landscape for this business?
  • Who will be my customers?
  • What are my options for reaching my customers?
  • What potential revenues can I expect?

Once you have considered these questions it's time to start your research.  Take a broad look at the industry (agriculture) in your area and then narrow in on the specific product you'd like to produce or service you'd like to provide.  Try looking at past, current, and future trends and try to understand how your product can fit in the marketplace.  Sources for your research can include:
  • Trade publications related to your area of interest
  • Visit federal, state, and local agricultural websites
  • Educational classes or webinars
  • Case studies
Attend educational workshops to learn about your area of interest

Perhaps one of the best methods of research is to conduct a farmer interview.  There is no better way to learn then from firsthand experience.  Talk to producers who are willing to share their experiences, both good and bad, is invaluable.  To find a farmer to interview, think of people you know or get names of potential producers from service providers in your area.  Once you've identified the person(s) you'd like to interview, come up with a list of questions and call to see when they would be available.  Try to pick a time during their "slow" season.  It's best to talk with multiple farmers - all will have different opinions and this will help you weigh out your decisions on what enterprise might be best for you.

Proper market research will help assure your that your preliminary market plan is addressing everything you need to do to prepare, promote, and sell your products.