Agricultural Entrepreneurship

What is Crowd Funding and Does It Really Work?

2012-01-27T10:44:00.003-05:00

One of the major challenges of starting a small business is finding financing. Banks are giving out fewer and fewer loans in this economy, so where is an entrepreneur supposed to get startup money? You may need to get creative and try alternative financing options like crowd funding.

According to Wikipedia, crowd funding is "the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes,from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company or small business or creating free software."

In a July 2011 post, I described a Pittsburgh brewery that was using crowd funding to fund their expansion into a larger facility. Below is a video of a New Jersey woman who recently used crowd funding to open a storefront for her baking business.

Is this type of funding right for you? As I've said many times before about trying a new idea, DO YOUR RESEARCH! Every business is different and you must weigh the pros and cons to tell if this is right for you. In the near future, I'll write a post about different kinds of crowd funding websites.

If you are an ag entrepreneur and have tried crowd funding, how was your experience? What kind of promotion did you do? What kind of advice would you give others thinking about trying crowd funding?

Getting people to "see" your brand on Twitter

2012-01-18T09:53:00.010-05:00

If you have used Twitter, you know that there is a very small amount of space for you to post (only 140 characters). To show a picture, you must include a link or use a third-party photo app like Instagram, Twitpic, or yfrog. To get people to click on your picture, you need to create a description that catches readers' attention, all in 140 characters or less. Sounds a little daunting, but it can be done!

Some tips on creating a better visual of your brand from an article posted on OpenForum.com with examples created for my fake business "DJM428 Cheesesteaks":

1. Twitter voice should be consistent and relevant. Try to keep the same person as the main Tweeter so that your Twitter account has the same style and voice. When composing tweets, they should be descriptive and relevant. Explain as much about the product (in 140 characters or less) and then add a picture.

2. Favor native images. As I mentioned above, third-party photo apps allow you to attach a picture right in your tweet. The reader just needs to click on the embedded link and the picture will show up in the feed. This is much more useful than just adding a link because it doesn't force your users to open another screen to see the picture (which might deter some readers). Research the different photo apps and how they work on mobile devices. Some work differently than others in how they display images.

3. Pageviews are paramount. As always, you want readers to visit your website. Be sure to frequently link back to your website so that readers can see all that you have going on. In doing so, don't be vague. Links with little or no description discourage readers from clicking.

What to do:

What not to do:

As an ag business owner, how do you use Twitter? How many followers do you have? How do your customers respond to your tweets? What advice would you give another ag business owner who is thinking about tweeting?

UK institutes gluten-free labeling regulations; could the US be next?

2012-01-06T10:09:00.005-05:00

In June of last year, I wrote a post about gluten-free products and it was the most read post so far. Since this seems to be a trending topic, I thought I would continue giving our readers more info about gluten-free products.

Starting this year, the UK has developed new regulations in the labeling of gluten-free foods. The labels will include 3 categories (as reported by SupermarketGuru.com):
1. Gluten-free: applies only to food which has 20 parts per million (ppm) or less of gluten.
2. Very low gluten: applies to foods which have between 21 and 100 parts per million (ppm) of gluten.
3. No gluten-containing ingredients: this is not covered by the law and is for foods that are made with ingredients that don’t contain gluten and where cross-contamination controls are in place. These foods will have very low levels of gluten but have not been tested to the same extent as those labeled gluten-free or very low gluten unless otherwise stated on the label.

Is the US next in instituting such regulations? The FDA took steps in 2007 to develop gluten-free labeling (products with less than 20ppm of gluten could use the term "gluten-free"). There was a lull in the FDA's development of gluten-free labeling, but the case was re-opened in 2011.

As a food business owner, what do you think? Will these regulations help or hurt the gluten-free industry? Do you currently make gluten-free products? Do you have customers asking for gluten-free?

What Are Consumers Buying? - Guest Blogger, John Berry

2012-01-04T12:10:00.000-05:00

Participating in a recent workshop on communicating withcustomers, I was reminded of the significance attached to meeting the needs ofour customers. After all, they do have the money! Concepts around customerbuying behavior are not necessarily new, but they do evolve over time. Jolene Brown was the catalyst for my latest ah-ha when she spoke of the 5 attributes peopleseek when shopping. She reminds us that people are not buying the goods we selldirectly. What they actually seek to buy is: 1) time, 2) youth, 3) health, 4)safety, and 5) experience. It may benefit our businesses to give these conceptsconsideration as we finalize the 2011 work and start into planning andimplementing for 2012.

Time

Convenience is another way to think of this retailshopper expectation. Many people are time stressed. Between family, communityand work, there is often multiple demands on our limited available time.Getting the message to our customers on the ease with which our products can bepurchased, prepared and consumed can be a challenge worthy of a solution. As anexample – the average American male spends 8 minutes on shopping and 15 minutesper day on food preparation and cleanup. The average American female spends 14 and 47 minutes accomplishing these tasks. If our typical shopper is near to these averages – how do ourproducts/services fit? Are we time worthy?

Youth

During a private conversation, a major grocery chainmanager described the basics of their decision making process for locating anew store. The gist of this process is “we seek a demographic with relativelyhigh cosmetics transactions.” Having not yet found the secret of immortality wedo strive to stay vibrant and active as we age.

Health

Continuing research into our health status leads scientiststo project that in a few more years, 70% of American adults will be overweight. As we consider the health needs of our customers, are weproviding solutions focused on their demand or our interpretations of what theyshoulddemand?

Safety

Between food safety concerns with conventional food sources and food safety concerns with trendy food sources, it’s no wonder the safety of the food we feed ourselves and our families is aprimary consideration when shopping. Also, agri-tourism opportunities areevolving as farm marketers develop a more sophisticated and fuller complimentof venues. As farmers step into these non-production roles the risk theyaccumulate and mitigate can be significant.

Experience

More consumers are also seeking the farm experience as away to build family quality time and assure themselves of the safety of theirfood. Not only do consumers expect a delightful experience each and every timethey purchase an item, more significant for us, the further removed from farmlife consumers get the more they crave a real farm/food experience. Theexperiences we make available to our customers begin as we initiate promotionsand awareness efforts and follow through final product use. It may be worthremembering – our customers’ last impression of us is the one most likely tostay in their head.

Conclusion

I am wildly optimistic when I think about agriculturalopportunities. We may only be limited by our imaginations. However, challengesare also many. As we seek new farm ventures, develop and implement plans –let’s also remember to focus on what potential customers actually want. Growingand marketing great farm products is not the point. Successful farm marketersare those businesses that are growing and marketing great farm products thatcustomers want. We may serve ourselves, our communities and our industry bestwhen we focus on customer needs more often.

About John Berry.... Following twenty years of milking cows, raising pigs andmaking maple syrup John received an MBAand has been working for Penn State Extension ever since. His adult educationwork with Extension centers primarily on agricultural marketing issues. Roughlyhalf his time is devoted to commodity marketing concerns with the remainderfocused on retail farm market and agri-tourism topics. An annual retail farmmarket bus tour, in-season farm market employee twilight workshops and a RetailFarm Market School are some examples of the educational outreach programs Johnis involved with that benefit direct-to-consumer farm families.

Educate Yourself Before Setting Up Religious Food Displays

2011-12-22T13:03:00.002-05:00

Christmas, Kwanzaa, and Hanukkah are some of the biggest holidays in December and are associated with special foods. If you want to set up a display in your store dedicated to a religious holiday, be sure to educate yourself on what foods to include and not to include.

By not doing some research before setting up a religious food display, you may offend followers of that religion like Whole Foods and CVS did this year. In the article "Whole Foods, CVS Confuse Jewish Holidays With Incorrect Displays", author Rachel Tepper describes how these 2 stores messed up:
*Whole Foods displayed matzoh- an unleavened bread traditionally eaten during the week of Passover, not Hanukkah.
*CVS made a display showing an image of shofar and pomegranates- items associated with Rosh Hashanah, not Hanukkah.

As an food or farm business owner, have you ever set up a religious holiday-based food display? What were customer reactions? Do you have any tips for other ag entrepreneurs?

'Human Interaction' Making a Comeback

2011-12-16T10:36:00.005-05:00

Shopping in a large grocery store doesn't give customers much interaction with store employees. This way of shopping has been popular for a long time, but according to a survey conducted by Adaptive Path (a design firm focusing on customer experience), customers are now looking for a personal experience in their shopping.

Peter Merholz, president of Adaptive Path, says that consumers want "low-key, face-to-face interactions with merchants". Evidence of this can be seen in the decline of self-checkouts and the rise of food trucks and farmers' markets. The Food Marketing Institute reports that in 2007, 22% of grocery store orders in the US were paid at a self-checkout. In 2010, that number dropped to 16%. Agricultural Marketing Service reports a 53% increase in the number of farmers' markets from 2008 to 2011 (as seen in the graph below).

Merholz also said, "In our increasingly connected world, people crave authentic human interaction, and the future of retail is going to look a lot more like it did in the more distant past and a lot less like the bureaucratically driven mass consumerism we grew to expect in the 20th century."

article

Sounds like great news for ag business owners! Do you feel that your business succeeds because of the human interaction? What kind of feedback do your customers give you about "having someone to talk to"? Are there any groups of people (women, men, seniors, married, no children, etc) that you think enjoy the human interaction more than another group?

Three Things I Think I Know About Local Food Systems

2011-12-16T09:02:00.000-05:00

If you follow me on Twitter (@jeffhyde) or are Facebook Friends with me, you may know that I recently attended a Forum to discuss Regional Food Systems with about 40 colleagues from Land Grant Universities in the Northeast. The Forum was wonderful, bringing together many different people from many different states with many different sets of expertise; economists, plant pathologists, nutritionists, food scientists, horticulturists... The meeting helped me to solidify some of my thoughts on the topic. Here's the top three things I think that I know....

1. The Customer is Always Right
This is the version of the Golden Rule in which those who have the gold make the rules. At the end of the proverbial day, the consumers have the money that drives the system. Over time, the distribution system in the US has focused on providing a diversity of food products at relatively low cost. Economists who study trade, including international trade, talk a lot about exploiting "relative advantages," making all parties better off if we trade. That argument applies to any scale of the problem, including global trade. So, it's no surprise that the distribution system doesn't support local food distribution very well.

To really change the system, it's going to take a willingness on the part of businesses and/or government to step in and modify the food distribution system. Most of the arguments for this focus on government intervention, which is understandable. In the long run, though, it will take private investment to sustain it, even if it happens initially as a result of government policy. Private businesses absolutely would be willing to modify the distribution network if there were increased profits to be made in doing it.

In my opinion, the customers must be willing to pay higher prices for some foods if a distribution system is to develop in order to support a more robust local food system. While some consumers have shown a willingness to do this, most have not. Therefore, I think this is unlikely to happen any time soon.

2. There Are Opportunities to Innovate in the Middle
It's no secret that a farmer can recover more of the consumer dollar if he or she is able to "eliminate the middle man" on some functions. For example, selling at a farmers' market eliminates one or more "middle men" that provide food distribution services. I regularly tell farmers that this extra money isn't free. The farmer must bear the cost associated with those functions that are being replaced. One of the Forum participants told a story that made this point clear, describing one farmers' fatigue of harvesting in the early hours, packaging it, transporting to the farmers' market, selling all day, closing down the booth, driving home, handling the business's Facebook page, and then getting up early the next day to do it all over again. That farmer is now considering a significant scaling back of the marketing function in order to deal with burn out.

In my experience, stories like this aren't unique. There are "points of pain" in the local food distribution network that provide opportunity for entrepreneurial action. Distribution, aggregation, processing, packaging, and marketing are all things that "middle men" do. Maybe we need more middle men if the local food system is to develop and be sustainable. I believe there are entrepreneurial opportunities to be explored here.

3. There Are Opportunities to Innovate on the Farm
I'm not blue in the face yet, so I better keep saying it... There are opportunities for almost any farm business because consumers demand diversity. Because the customer is always right, farm and food business owners have to understand these customers and how to meet their needs. That, after all, is the heart of marketing!

In my opinion, entrepreneurship is the key to long-term survival in agriculture. Understanding what you can do to meet consumer needs and be profitable/sustainable is critical. The entrepreneurship research literature is filled with various theories and case studies about this, but it's almost universally accepted that successful entrepreneurs consistently figure out ways to address needs for those who can pay for the solution. This may mean developing new food products, growing different crops or livestock, opening the farm to the public, or many other options. So, all in the food system need to keep an eye on their industry, looking for opportunities to innovate. Consumer demand for local food creates opportunities, but great skill is needed to seize those opportunities and make money from them!

I'm always interested to hear others' thoughts about local food systems and how they can be developed and supported. Comments are, therefore, welcome!

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part III

2011-12-15T11:37:00.000-05:00

In this final installment of discussing cross promoting I've suggested thinking about hosting events with complementary businesses and how this partnership might "cost" businesses involved in such a venture.

Hosting Events Together

Though one business may develop the vision for an event the responsibility of coordinating and implementing it needs to be shared. There are advantages that two or more establishments provide and gain by working together. For example, if an event’s focus is outdoor entertaining the retailer may be interested in pairing up with a local winery or specialty food retailer. Another complementary business could be a local florist.

Allow time for a series of demonstrations, such as meal preparation using value-added processed foods, home entertaining, and flower arranging. Both businesses should also provide goods that could be included in gift baskets for sale, raffle, or door prize.

Considering Your Costs

Cross promotion cannot be implemented without certain “costs.” Some of which include:

· how much complementary product should be used in displays,

· whether or not the shelf or floor space will be provided for free or if the space will be rented,

· what discounts to apply if customers buy a combination of products offered by both businesses,

· how advertising and promotional costs will be shared,

· how many times during a season or year each business will agree to provide information for blogs, newsletters, etc. and the number of feature articles each business will write, and

· how staff will be allocated for events and activities, if one business provides space for the event what the other business will offer in compensation.

Additionally, staff should be educated about the complementary products, how to use the item, benefits for customers, and related. Staff should be able to answer basic questions about why the businesses are cross promoting each others’ product and provide customers with at least an introduction on how to use the products.

These are just a few possibilities for cross promotion and obtaining access to new customers. Your decision will ultimately depend on the amount of time you and your staff have available, your budget, business goals, and facilities available. There are tradeoffs to consider; however, working together can provide benefits for your business and customers you serve.

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part II

2011-12-12T11:30:00.001-05:00

This posting, the second in the cross promoting series, focuses on how to join efforts with complementary businesses to communicate with your customers and theirs.

Newsletters and Blogs

How do you currently communicate with your customers? Whatever methods you use to inform and remind customers about your business or persuade them to buy your products, there is at least one way to cross promote each others’ products and expertise.

With the number of garden centers who have a blog, newsletter, or other publication that they publish on regular basis it is highly likely that the person writing these pieces often has to find items to write about. Short pieces can alert readers about the complementary business or a new product they are offering. Feature articles can describe how products from both businesses could be incorporated into new gardening trends or an upcoming event that the two businesses are co-sponsoring. Do not forget to include the complementary business’s logo, URLs or hyperlinks to their website, and contact information.

Also, invite the other business to write a newsletter item or be a guest blogger. Suggest a topic so the guest writer has some direction as to what your readers might be interested in learning and that would meld well with other items you are including in the newsletter or blog.

Your Website, Facebook, and Twitter

Your website is an ideal outlet for cross promotion activities. Use space on your website to inform readers about complementary businesses you cross promote with and provide space for their advertisements. If customers sign-up for your newsletter online provide an option that would allow them to sign up for other businesses’ newsletters or add a link that will take them to the other businesses’ online form.

When it comes to Facebook, make sure that you “like” business you cross promote with, post images of events and activities both businesses implement, include links to articles, and mention each other in postings. Tweets you publish on Twitter should also mention your cross promotion partners. Include these businesses in your #followfriday (#ff) tweets (a strategy used on Fridays to suggests to your Twitter followers who they should also follow) retweet (forwarding another Twitter user’s tweets to your followers) appropriate messages, publish tweets when you add their products to your displays, and similar. Inform your customers about joint activities while reminding them about your business.

Until next time when I’ll present ideas on how to cross promote with other businesses to host events and some of the costs to consider when entering into this type of relationship.

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part I

2011-12-08T11:22:00.000-05:00

With consumers desiring outdoor living spaces, complete with lighting and kitchen components, and baskets filled with wine, assorted cheese, and other food and non-edible items always proving to be popular gift items, how can ag. retailers provide such items when they do not stock and sell all the components? One idea is to partner with business owners who sell complementary goods and services, thus the two businesses work together to help customers obtain a complete “package.”

Promoting goods and services offered by business owners you have an existing and trusted relationship with takes the guess work out of where to direct customers and your recommendation also helps reduce the risk for your customers. Such a situation, known as cross promotion, is based on two (or more) businesses working together towards a common goal.

In this blog posting I’ve presented ideas for cross promoting in the retail space, but over the next couple of posts I’ll provide examples of how retailers can cross promote in other ways. When cross promoting works, efforts coordinated with a complementary business provides certain benefits:
· expanding your customer base,
· greater reach with promotions and advertising,
· reduced marketing costs, and
· increased profits

Putting Items on Display

Displaying items produced or sold by complementary businesses is one cross promotion strategy. You may already have relationships with business owners who produce or sell items that would complement what you offer, but what if you do not? What goods and services could appeal to your customer based on their demographics, behaviors, and interests? If you do not already sell items like bath and body products, jewelry, specialty foods, place settings, or the like, search for businesses that do. Once you have assembled a list, learn about clientele they serve, search for reviews customers post online about their shopping experiences, and investigate as much as you can about their business practices before requesting to meet. Just as you put thought into developing a relationship with a new vendor the same amount of consideration is required when selecting a business to cross promote products.

Signage placed next to items should include a description of the product as well as information about the complementary business (e.g. business history, other available products, contact information) and an explanation as to why the product is so unique that you decided to display it in your store. Don’t forget to ask the other business to reciprocate by incorporating select products you offer into their displays.

The possibilities of what type of businesses to cross promote with are endless. Displaying complementary items together is just one step, in the next few postings I’ll provide examples of how to cross promoting when communicating with customers and when hosting events, as well as the “costs” to consider before committing to this partnership.

Mobile Payment: A Direct Marketing Tool

2011-12-06T18:31:00.000-05:00

The Penn State Extension Ag Entrepreneurship team, along with Ohio State and Minnesota Extension, have developed a series of webinars on social media and mobile technology for ag businesses (more information on the webinar series at http://www.cvent.com/d/lcq890). These issues are especially pertinent for direct marketers who are rapidly finding that they need to engage their customers using these tools.

One of the webinar sessions will focus on mobile technology available for use by farm markets, farmers markets, roadside stands, and agri-tourism businesses to accept payments. Chris Raines, Assistant Professor and webinar team member, was motivated to learn more about mobile payment following his own mobile payment experience when getting take-out. So he purchased the needed attachment for his iPhone and tried it out. Check out his blog post on his experiment and thoughts regarding mobile payment possibilities for direct marketers.

Should your website also come in a mobile version?

2011-11-30T13:16:00.005-05:00

As a small business owner, you have probably realized more and more how important online sales are, but should you also have a mobile version of your site too? A mobile site is a version of a website created specifically for smartphones or tablets (like iPads, Kindle Fires, HP Touchpads, etc). Companies create mobile versions of their site because their regular website may take too long to load or may seem squashed on the smaller screens of these mobile devices. When a customer visits a site via their mobile device, the browser automatically detects the mobile device and switches to the mobile version of the website. (To see some examples, visit ae.com or papajohns.com on your computer and then visit these sites on your mobile device.)

If you have a great, working website, why spend the time and money on a mobile version too? According to a recent article on Mashable.com, tablet users typically spend 10-20% more on purchases than customers without tablets. Also, mobile commerce spending was about $3 billion in 2010 in the U.S. and is expected to jump to $31 billion by 2016.

You may also be wondering who is using tablets. U.S. tablet owners are:
-college graduates (51%)
-employed full-time (62%)
-earning salaries of $100,000+ (50%).

54 million people are estimated to own tablets by early 2012 and nearly 108 million by 2015 (a third of U.S. population).

Is a mobile version of your website right for you? Make sure you do your homework! Ask yourself some important questions (and some questions of your customers):
-How easy/hard is your website to read and navigate on a mobile device?
-What technical expertise is needed to create a mobile site? Does your web developer have these skills?
-How much will it cost to create and maintain?
-Poll your customers: Do they currently own a mobile device? Do they use their mobile device to shop? Do they think a mobile version of your website would be easier to use on their mobile device?

As an agricultural business owner, have you had any customer feedback about online or mobile shopping? How much of your profits is related to online or mobile shopping?

A Note About Customer Service

2011-11-22T12:47:00.006-05:00

In my last post, I talked about Heinz using Facebook as an exclusive launch pad for its new balsamic ketchup. I personally thought this was a very interesting marketing technique, so I logged on to the Heinz Facebook page on unveiling day to buy a bottle. Unfortunately, the new ketchup was so popular that their page crashed!

I was thoroughly impressed with the way Heinz handled the situation. When I went back to their Facebook page later in the day, Heinz quickly responded to the issue. They reported that they were unsure as to what caused the glitch, but that anyone who had trouble placing an order could order now and Heinz would add an additional bottle for free and free shipping.

Obviously, giving away free products and free shipping is very costly (especially to a small business). If you have a similar situation (whether it's online or not), take a cue from Heinz-- respond quickly and offer your sincerest apologies. If you can, throw in an apology gift to keep those customers coming back (but be sure not to break the bank) like a coupon, discount, reduced or free shipping, or free samples. You always want to keep those customer relationships strong!

As a small food or farm business owner, have you ever had a problem (whether it's web ordering, product shortages, etc) that has kept you from filling orders? How did you handle it? Did you manage to save the relationships with your customers?

Retailers - keep rotating merchandise and rearranging displays

2011-11-18T09:14:00.000-05:00

Most every retailer has started decorating for the winter holidays, or at least will choose to do so after Thanksgiving. Nevertheless, all retailers should understand the importance of changing the “look” of their outlet on a regular basis, whether it is a display, a window, or how customers will walk the floor.

Why might you want to change or rearrange product placement or how customers must walk to get to key departments or merchandise? The reason is simple – if you keep products displayed in the same location or do not rotate merchandise in key sales areas it is likely that repeat customers, who are accustomed to purchasing one or two items and then leave the premises, will never notice items other than what is on their list. By moving “anchor goods” (items that customers purchase often and “draw” consumers to visit the retailer) to other locations, or mixing seasonal goods in with more commonly stocked items (so that customers looking for holiday decorations will notice other products) customers will certainly notice items that they may not have considered or may not even have realized were stocked and sold.

Aside from rotating merchandise, another way to periodically change the look of a display, or draw attention to a particular area, is to set up temporary and portable backdrops that complement product placed in front. One way to achieve the goal of easily and cost effectively changing a backdrop is to hang fabric. The numbers of colors and textures available, as well as being relatively easy to store, provide a realistic solution for retailers who may not have a large floor space and are limited in how they can rearrange merchandise.

Now, how often should you rearrange or change the look of your outlet? It is suggested that retailers change some component of their window or floor display, or other design element, at least once a month; however, if your average customer visits more frequently than consider changing and rearranging more often. Again, it is in not necessary to completely rotate and/or redesign the entire retail space at this frequency, rather find something that you can change easily and that customers will notice.

Heinz is leading the way in combining social media and sales

2011-11-10T09:03:00.002-05:00

As we've discussed many, many times in this blog, social media is here to stay, so why not use it to your advantage? As a business owner, connect with your customers and get more involved in that bond. Market your products, your business, and yourself via Twitter, Facebook, blogs, etc.

Earlier this year, Heinz set some new Facebook records in the UK. To launch their new balsamic ketchup, Heinz decided to use Facebook (with 45,000 UK fans) as their exclusive launch pad. This was the first time a food product has been exclusively launched via Facebook and the first time branded food products have been sold via Facebook.

Heinz will be doing the same thing here in the USA, but only to a much larger crowd (Heinz's USA Facebook page has over 852,000 fans). Starting November 14th, Heinz will launch it's balsamic ketchup via it's Facebook page. This will be the only place to buy it until it reaches stores in late December.

To read more about balsamic ketchup, please visit the Supermarket Guru.

As an ag business owner, what are your thoughts on launching a product exclusively through Facebook (or any other social media)? Would you try it? As a consumer, do you feel a certain "exclusivity" by only being able to buy this ketchup via Facebook? Do you think Heinz's marketing is innovative?

Five Predictions for Social Media: 2012

2011-11-04T14:37:00.000-04:00

I just read a great post about what 38 Social Media experts see for 2012. (I encourage you to take a look!) While a few of the specifics aren't really relevant for small businesses (mainly because they are related to investment in people or technology), most of the general points are perfectly applicable to small businesses, including food and ag. The article has prompted me to do 2 things. This post is one of them. You'll hear more about the second one soon....

Back to the business at hand....

After reading this article as well as the chicken bones that I threw down this morning, I see five themes emerge.

Social Media Usage Will Increase: This prediction is low risk! The rate of growth in the use of the most popular Social Media tools is astounding. Some of this is due to the growth in use of mobile devices such as smart phones and tablets (such as the iPad). These devices make it easy to post to Facebook or Yelp, send a tweet, or check in on foursquare from just about anywhere. Additionally, some people who have been on the sidelines are now being drawn into the Social Media world in order to connect with friends and family members. Several grandparents have told me that they registered for Facebook so that they could stay connected to their grandkids. Expect more users and for those users to connect more frequently and in new ways. APPLICATION POINT: As more customers use Social Media tools, owners need to continually think about how the tools can be used to engage those customers. Ask customers how they want to connect.
Social Media Will Be More Integrated With Mobile Devices: I'm one of those people who have a bit of a panic attack when separated from my phone. How will I check in? How will I tweet about my lunch? How will I find out what's going on in the world? You get the picture! In the article, Loren McDonald uses the word "mocial" to reflect integration of "social" and "mobile." Not only do mobile devices allow users to interact in "typical" ways via Twitter/Facebook/etc. but they also allow for check ins, capturing photos and videos, scanning QR codes, comparing prices through mobile web, etc. The integration of these features with Social Media is expected to become more pervasive. APPLICATION POINT: Take control of your location on foursquare, Facebook, Yelp, Google Places, etc. This will help you track what's being said and monitor your customers who are using these tools.
Social Media Will Be More Integrated With Other Media and Events: Business owners have been using radio, TV, newspapers, magazines, billboards, and other tools since they first became available. It was absolutely unheard of, not that long ago, for a business not to have a website. Today, integrating Facebook, LinkedIn, Twitter, Yelp, or other Social Media into a website is commonplace. I also see signs at retail outlets indicating that the store can be found on Google Places, foursquare, Yelp, or other services. QR codes on packaging, store shelves, and signs are more frequent. Some TV ads encourage viewers to use Shazam to learn more about the retailer or products. TV shows are encouraging live tweeting with the hosts or stars. APPLICATION POINT: Create a Twitter hashtag for your event, such as a Fall Festival. Add QR codes where they make sense. Make sure to feature your Facebook page on your brochures or electronic media. Cross referencing your own media will help you reach a broader audience! Also, don't forget about your blog if you have one. Search engines love blogs!
Customers Will Increasingly Filter Social Media for What They Want Most: If you're like me, you might get a little perturbed with all the changes that Facebook and Twitter are making. I don't really want to know what music my friends are listening to on Spotify or what they're reading in the Washington Post. Yet, there it is, right in my News Feed, Ticker, and Timeline. Luckily for me (but not for Spotify), Facebook and Twitter allow me to take some action to avoid all that. Third party curation tools are widely used to sort through mounds of content to give users what they really want. APPLICATION POINT: Be relevant to your target audience. Connect with them directly with messages that resonate with them. Be social and focus on relationship building. Don't give them a reason to filter you out of their feeds.
Businesses Will Be More Strategic With Social Media and Will Seriously Assess Return on Investment: I've been asked many times for data about return on investment (ROI) in Social Media. Frankly, I'm often dismissive in the context of the types of businesses I work with. To some extent, it's like asking what the ROI is for your cell phone or computer. Social Media are tools to connect you with customers. The cost of using Social Media in a small business are often low unless one begins to put a lot of time into it. Because the cost is low, returns don't need to be huge to justify using it. However, Social Media should be part of a holistic, strategic marketing plan. APPLICATION POINT: If you're really interested in developing a marketing strategy to integrate Social Media and other marketing tools, your costs will go up, even if those costs are only represented by time devoted to it. Therefore, set goals for Social Media and track them. Be ready to make changes where needed.

This stuff is exciting! Most small businesses, including food and agricultural ones, are successful over the long run because of relationships that they make with customers, especially a few strong relationships with key customers. Owners manage these relationships with personal visits, phone calls, emails, texts, etc. We're still on the front edge of learning how these relationships will be managed in the future in a world of Social Media tools; where the new word-of-mouth occurs through a check in with a picture and short blurb about how great (or how bad) the product is and where that check in is Facebooked, tweeted, Yelped, and so on. These tools will help you strengthen relationships with some customers. Your task is to figure out which ones and target them in a way that provides value to them and to your business.

Thinking About Christmas Shoppers

2011-10-28T15:01:00.003-04:00

It's that time of year again!

Christmas Countdown

I know for most of you Christmas is a long way away, but according to a SymphonyIRI Group Holiday Shopping 2011 survey, 73% of respondents plan to start shopping early (before Dec. 1) in hopes of saving money. Also, 71% of consumers earning less than $100,000 plan to spend less this holiday.
Fourty-four percent of respondents say that their reason for less spending is because they feel worse off financially now than a year ago. As a result, 26% expect to spend less on holiday gifts, 16% will spend less on holiday foods and beverages, and 11% will spend less on beer, wine, and spirits.
As an ag business owner, are you prepared for early shoppers and more people "looking for a deal"? Are you planning on running any holiday discounts? What about holiday advertising? Are you concerned about your sales of holiday foods?

Price Competition: Shoppers Value a Bargain!

2011-10-25T11:04:00.000-04:00

Do you know a bargain hunter? You know, the type of person that is drawn to a "SALE" sign like a moth to a flame... Most of us know one or two, I'm sure. I learned a little more about these people last week, thanks to a paper presented at a conference by some researchers from Washington State University (Li, McCluskey, and Mittelhammer).

The research team analyzed the responses to "permanent" price drops (that is, those that were due strictly to supply and demand conditions) versus promotional, or short-term, price drops. They used data from supermarket scanners, so they were able to analyze real transactions under real market conditions. They did this for several different types of vegetables.

Guess what they found... Consumers were more responsive to short-term price decreases than they were to permanent ones. This suggests that promotions may be a better method to generate increased sales than being viewed as having low prices all the time. On the other hand, it also means that promotions that happen too frequently may cause customers to pull back when a promotion isn't underway.

This phenomenon doesn't really surprise me. I may or may not be related to a bargain hunter and I have come to understand that the purchase is more than the purchase. Getting a bargain is a badge of honor; a story to tell friends, family, and co-workers. I get that. But there may be other factors at play. In a stagnant economy like this one, we see shows like TLC's "Extreme Couponing" become popular. To get these types of bargains, it often means buying in bulk. So hoarding, or "stocking up" is a factor that drive sales during promotions. (For something like vegetables, this may mean freezing or canning, so be sure to offer tips on how to do that.)

There's good science and economics behind pricing strategies that include short-term promotions. Business owners should think about using them frequently, but not so much that they become the norm. Watch sales (in dollars and quantities) to see how effective the promotions are.

Marketing Your Products With Charity Donations

2011-10-17T20:54:00.008-04:00

In April of 2010, I wrote a post about charity donations. I thought I'd follow up with some more research on what charities customers prefer. Take a look in your refrigerator and pantry. Do you have any products that mention a charity donation? In my kitchen, I've got cereal, granola bars, and yogurt like that. Not all donation advertisements are equal, though. According to a study by The Integer Group and M/A/R/C Research, 43% of women choose brands that donate with every purchase over brands that donate a set amount.

Does the type of charity make a difference to shoppers? The research says 'yes' (the study results can be found at www.shopperculture.com). Women are attracted to causes that invoke an emotional or personal response like disease prevention, faith-based, animal welfare, and child welfare. Men, on the other hand, seem to be attracted to causes of a social nature where money is a fix as compared to an emotional tie.

"Brands need to appeal to men's rationale side, delivering a more rational benefit for their participation in a cause program, which can lead to higher engagement. Men are more likely to support organizations like The Salvation Army or Goodwill, with women saying they support disease prevention causes such as breast cancer awareness," said Craig Elston, SVP, The Integer Group. "If you're targeting women, focus on the messaging as a means to evoke emotion."

As an ag entrepreneur, have you advertised charity donations with the sale of your products? If so, have you seen an increase in sales? If you have tried different charities, have you seen significant differences in the sales of one charity product over another?

Social Media Aren't the Only Ways to be Social

2011-10-14T11:35:00.000-04:00

I was walking through the soccer fields last week when I had a chance to talk to a lady I know from involvement in various activities in the community. The conversation wound through topics such as our kids, sports, and some work stuff before it came around to Facebook. She has no use for it! She has major issues with privacy but, even if that weren't the case, she just doesn't see a need for it. I hear this a lot, though maybe not quite so adamantly as I did from her. There is a bunch of people that aren't going to latch onto social media like I have and maybe like you have. Business owners and we in Extension must continue to engage people where we can, when we can, and how we can.

One of my social media mentors, Max Spiegel, describes social media as a cocktail party. Party-goers mingle, make small talk with some, have longer, more meaningful chats with others, etc. Based on my experience, I'd agree with Max. Bottom line; business success is all about communication and social media tools are just another way to do it.

There's still very much a role for phones, emails, and maybe even written or printed stuff, like flyers or brochures. None of these are my preferred modes of communication anymore. (My least favorite feature of my cell phone is the phone.) But I know there are certain people I can reach best by email and others that I really have to talk to on the phone. Business owners that desire a personal connection with customers have to meet them where they are. The old advice still works, whether it's in person, in your farmers' market, or some other venue: be engaging, be responsive, don't oversell your business or products, etc. (See goo.gl/ZK1Vl for some tips on how to engage your audience on social media.)

The key takeaway is this: Use the tool that allows you to meet your audience how and where you need to meet them. Don't force them to find you on Facebook if they don't want to. Likewise, get your business listed in Google Places if that's how they find businesses in an area. This stuff isn't rocket science, is it?

Surrounding Yourself With Excellence

2011-09-27T20:20:00.006-04:00

To be a successful entrepreneur, you need a strong team behind you. But who should be on this team exactly? You need to surround yourself with people better than you. What do I mean by that? I mean you need to be able to identify excellence and immerse yourself in it!

Here are a few things to think about when your trying to find the right team members:

- Get educated on what you need. If you need a maintenance person to fix your farm equipment for example, learn a little maintenance yourself. With this knowledge, you can ask better interview questions and therefore weed out some of the applicants that actually don't know much about the topic.

- Come to terms with that fact that at times, things will go wrong. A great team member will be able to admit to mistakes and shake it off. Don't dwell on the negative (not you or the team member)!

- "Safe" leaves no opportunity for exploration. Excellent team members bring about change. You have to be OK with getting out of your comfort zone!

As an ag entrepreneur, what are some qualities you see in your most extraordinary team members? How have these team members helped your business grow?

Do Consumers Recognize Their State's Promotional Branding Program?

2011-09-16T16:01:00.009-04:00

Earlier this month, I wrote a post about state promotional branding programs. Researchers at Penn State surveyed mid-Atlantic consumers on their awareness of their state's promotional branding program and how (or if) that influenced their purchases. This study has provided a lot of great info that can't be covered in just one post!

Participants were asked to indicate if they were aware that their state had a promotional program. Participants who responded “Yes” (20% on average; 34.6% of New Jersey residents, 18.2% of New York residents, 15% of Pennsylvania residents, and 21% of Virginia residents) were then asked to select the correct name of their state’s promotional program or select the “don’t know” option. The programs featured in the survey included a) PA Preferred, b) Pride of NY, c) New Jersey Fresh, and d) Virginia Grown.

Figure 1.

Figure 2.

Figure 3.

Figure 4.

In Figure 1, 50.8% of New Jersey residents selected the correct name for their state’s program (Jersey Fresh). In Figures 2,3, and 4, the correct promotional program for their state of residence was selected by 73.3% of Pennsylvania residents, 23.4% of New York residents, and 59.2% of Virginia residents.

Overall, New York residents who responded that they were aware that their states had a promotional program were the least likely to select the actual name for their program compared to residents of the other states. Additionally, slightly less than half of New Jersey residents, 42.3%, selected the incorrect name for their promotional program. Regarding the “don’t know” option presented, close to a quarter of participants residing in Pennsylvania (23.3%) and 37.5% of New York participants selected this option.

To read more about this topic, please see the press release.

As an ag business owner, do you use your state's branding program on your products? As a consumer, are you aware of your state's branding program? If so, does it affect your purchases?

Small Investments, Big Returns

2011-09-09T16:13:00.004-04:00

In the article "10 Examples Of Great (Small) Investments For Small Business" by Annie Mueller, she describes some relatively cheap ways to help your business from staffing to marketing.

*Administrative help- "One of the most important investments that I've made was setting a budget to have office help. Although it was challenging to spend resources on hiring an administrator, the move turned out to be vital to the company's functioning. We have been more organized, more productive and I have had the time to think beyond the daily operations."

– Alexandra Mayler, founder of Thinking Caps Tutoring and author of "Tutor in a Book"

*Smart sponsorships- "I agreed to sponsor the state-wide gathering of the MCEEA (Michigan Career Educators and Employer Alliance). The price was right—only $300 for a Silver Sponsorship plus attendance and one year membership in the organization. It was a great investment! Not only was my name on the literature and all the PowerPoint presentations, but also I met great employers and candidate referrers at the conference."

– Adam Kaplan, Big Tent Jobs, LLC

*Tailor-made training- "We decided to invest in a more streamlined training program for our new employees. We created twenty 10-minute videos describing the different parts of our company, our procedures, and our history. The videos have been a big hit— our new hires love them, they save us time, and they guarantee that nothing slips through the cracks in our training program."

– Sander Daniels, Co-Founder of website, Thumbtack.com

*Buzz-worthy giveaways- "I've conducted giveaways of all sorts of products from T-shirts to electronics and have realized that I get the most bang for my buck through these sweepstakes...The better the prize, the more exposure. I've also given away an Xbox 360 and that received over 11,000 views and thousands of entries."

– Ismail Humet, Co-Founder of MyFreebeez

These are just of a few of the suggestions given in the article. As an ag entrepreneur, what kind of small investments have you made that have netted large returns? Have you or will you consider some of the above ideas?

Do State Promotional Programs Actually Get Consumers to Buy?

2011-09-02T15:21:00.006-04:00

More great research from the Penn State consumer purchasing behaviors study I talked about in multiple past posts. Mid-Atlantic consumers were surveyed on what factors may have affected their purchasing behaviors. One factor that may affect purchasing is state promotional plan branding. (The overall goals of these programs are to identify and promote the sale of fruits and vegetables and produce-based products within the corresponding state of the program. The programs featured in the survey included PA Preferred, Pride of NY, So Maryland, So Good, New Jersey Fresh, and Virginia Grown.)

Figure 1.

Figure 2.

Overall, only 20% of survey participants indicated that they were aware that their state of residence had a promotional program. However, of those 62.8% (or 12.5% of all respondents) indicated that they had intentionally purchased fresh produce items that were branded according to their state’s promotional program. Figures 1 and 2 (above) show participant response to state program awareness and corresponding fresh produce purchasing behavior according to participant state of residence. Concerning state promotional program awareness, a significantly lower percentage of Maryland residents indicated that there were aware of their state promotional program compared to residents of all other states, while a significantly higher percentage of New Jersey residents indicated awareness of their state’s promotional program compared to residents of all other states (Figure 1).

Concerning the percentage of “state brand aware” participants who purchased produce banded under the guise of that state’s promotional program, a significantly higher percentage of New Jersey residents indicated they purchased these items compared to New York and Virginia residents, as well as a significantly higher percentage of Pennsylvania residents indicated they purchased these items compared to New York residents (Figure 2).

To read more about this study, please read the press release.

As an ag entrepreneur, are your products marked with your state's promotional brand? As a consumer, do you seek out products with your state's promotional brand?

What's that Square? Using QR codes for marketing

2011-08-30T10:44:00.000-04:00

Have you seen these black and white squares - on flyers, posters, labels, etc. - and wondered what they were? They're QR codes, or quick response codes, a type of bar code that when scanned by a camera enabled smartphone (iPhone, Android, etc.) takes the user to linked content on the web, or activates email, IM, or SMS. Essentially, it's a quick way of sending someone to content that you want them to see or getting them involved in communication without first having to get to a computer (by which time they may have forgotten).

The second image shows the QR code for PA MarketMaker. Whenever someone scans the code they are taken to the homepage for PA MarketMaker (www.pamarketmaker.com). For us, this is an easy way to show someone this marketing tool without being at a computer.

There are numerous potential marketing uses for QR codes including:

Take folks directly to a page for them to sign up for your email list
Link to coupons or special offers
Link directly to a product or event page that you're promoting
Take folks directly to a page with product information or uses
Creating a QR code that allows folks to remotely "like" your Facebook page (not your profile)

Places where QR codes could be used:

Your business card
Brochures, flyers, and other marketing materials
Sides of trucks and trailers or bumper stickers
Product labels/tags and packaging
Signs at your market or farmers' market stand

Creating your own QR code is relatively simple. There are several free QR code generator sites that assist you in creating one. A quick web search will lead you to them. Reading QR codes is equally simple. Smartphone users simply need to download a QR reader from their phone's app store or "marketplace."

While creating QR codes may be easy, don't go overboard in your use of them. Just as with any other marketing tool, be strategic in how you implement their use. Choose one or two high profile or important aspects of your business that you really want to get folks involved with or to get their input on. Mix it up too. Let's say that after a few months of using QR codes for a couple of things, say an annual Halloween Fest and a featured product, choose two new aspects of your business to highlight with a QR code. This will keep people involved and interested.

Sell your business as a story

2011-08-26T13:13:00.003-04:00

As an ag entrepreneur, when someone asks you what you do and why, what is your answer? Example A: Do you say, "I own a coffee shop. I got into this business because I thought I could make a lot of money,"? It is an honest answer, but does it "sell" you as a business owner or your business? Probably not.

Statistics and facts are interesting, but not inspiring. To get potential customers to remember you and your business, make it memorable. Consumers buy not only on logic, but emotions too. They want to hear a story and will use that story to associate you as an entrepreneur with your business. The above example (Example A) doesn't help a potential customer differentiate you from any other business selling the same product or service. Your story can help that potential customer understand your beliefs and values and therefore have an emotional attachment to your business.

In the Forbes.com article "The CEO As Storyteller in Chief", Howard Schulz (Chairman of Starbucks) is discussed as a great storyteller. "He tells us the story of his trip to Milan and the passion for fresh, richly brewed espresso he discovered there and carried home with him. From that kind of simple story we--employees, customers, shareholders--derive meanings for everything a company does. The trouble Starbucks' coffee buyers go to to select the highest-quality beans from the remotest regions of the world, the care their brewers take--everything becomes romantic and fascinating, enticing us to stand in line as long as it takes to get our cup of coffee."

Doesn't Schulz's story sound a lot more enticing than Example A? Another great part of storytelling is the ease at which they can be spread. If you tell a good story, a customer is more likely to remember that story and spread it to other potential customers, and who doesn't love good word-of-mouth advertising?

"Entrepreneurship" and "Individualism" Are Not Synonyms

2011-08-23T09:56:00.000-04:00

So, what image comes to mind when you hear the word, "entrepreneur?" For many, it conjures up images of a single person, AKA "the" entrepreneur, struggling against all odds to start a company. This superhero image is still widely adopted. Our superhero is able to develop new products, create financial projections to obtain loan or investment funding, navigate the obstacle course that local, state, and Federal laws and regulations bring, manage all finances, and everything else needed to make the business flourish. It's hard work, but our superhero is up for the challenge.

Without exception, entrepreneurs can not do everything on their own. The best ones don't even try. This is true for all types of entrepreneurs: social entrepreneurs, corporate entrepreneurs, intrapreneurs, serial entrepreneurs,... (I'm starting to feel like "Forrest Gump's" Bubba describing types of shrimp.) Entrepreneurship happens in lots of different contexts and this point is relevant for each....

Entrepreneurship does not equal individualism.

True entrepreneurs use the resources that they control to make something happen. (This generally means launching a new business or product. For entrepreneurs that work within another business, even a university, this might mean moving a project along that furthers the organization's mission.) Resources include money, for sure, but also labor, machinery, equipment, and other people's expertise. We in Extension have contributed to many entrepreneurial ventures in agriculture and food, for example, by providing expertise on production, policies, business management, etc. Entrepreneurs often visit Small Business Development Centers or other counselors for input. They often have a team around them to help them see the things that would be overlooked if they worked on their own.

Even within an organization, including one like Penn State in which I work, we have a lot of leeway to be entrepreneurial. The only difference is that we have to keep in mind that we do things under the Penn State brand and must operate within its guidelines. Within that zone, though, we are free to behave as entrepreneurs. I have zero doubt, though, that I'll not be as effective on my own as I would be as part of a team that is all rowing in the same direction. At the end of the day, that's the entrepreneur's dilemma (or opportunity); how does one get all of those people rowing in the same direction? It would be a lot easier if one could do it alone, but the entrepreneur's effectiveness drops precipitously if he or she tries. Almost all university courses in entrepreneurship recognize and promote this fact by placing students into teams for class projects.

Truth be told, entrepreneurship works best when the individual puts "I" and "me" aside and turns it into "we" and "us." The best entrepreneurs (remember, this refers to all types) connect with others to make their ideas better and to make their dreams a reality. This mythical superhero just doesn't exist! Myth... busted!

Where do people in the mid-Atlantic buy their in-season produce?

2011-08-12T13:58:00.005-04:00

In the past year, I've been writing about research conducted by Penn State on consumer purchasing behaviors in the mid-Atlantic. One of the research questions asked participants about where they buy in-season produce. Responses were grouped according to the metro area where participants lived (Richmond, Philadelphia, New York City, Washington D.C., and Baltimore) and then tested against each other based on whether or not participants indicated that farmers’ markets/CSAs were their primary source of buying produce when in-season, versus choosing other places to buy (i.e. grocery, supercenter, warehouse, natural food store, etc.).

Overall, 29.3% of survey participants selected farmers’ markets/CSAs as their primary place to buy in-season produce. As shown in the graph below, a significantly lower percentage of D.C. participants, compared to Philadelphia, Baltimore, and N.Y.C., chose farmers’ markets/CSAs. Also,a significantly higher percentage of Philadelphia participants chose farmers’ markets/CSAs as their primary source of produce compared to N.Y.C. participants.

Local farmers and retailers growing and selling fruits and vegetables while they are in-season can use this data to get an idea of what percentage of total market share they may expect to achieve. As a mid-Atlantic farmer, have you tried to sell to these metropolitan areas? Why do you think DC has a lower percentage of respondents who shop primarily at farmers' markets/CSAs?

Get creative in financing your business expansion

2011-07-29T14:26:00.005-04:00

Funding your business is no easy task. Banks are tighter than ever on loans, so how can you expand your business if you don't have the cash on hand to do so or you can't get a loan? Get creative! East End Brewing Co. in Pittsburgh, PA has started selling voucher books to gain capital for moving the brewery to a new facility.

Scott Smith, owner of East End Brewing, developed a program called the "Good Beer Investors". For $1000, you can buy $1000 worth of counterfeit-protected brewery vouchers which can be redeemed for beer and merchandise. With a goal of 100 investors, Smith had 54 investors as of July 7th.

To read more, click here.

As an ag entrepreneur, how difficult has it been to get financing? Would you ever try financing your business expansion with a program like "Good Beer Investors"?

Viewing the Charms of Nature, City Style

2011-07-29T14:19:00.006-04:00

Summertime is in full swing; a great time to view what is growing. I took a day to visit farms and friends in Philadelphia and am thrilled how they are thriving. There are many urban farms models; some are non-profits with a mission to educate and serve the hungry, others are more of a business model intending to provide a source of income for an entrepreneur, others are a combination. On this unbearably hot July day, I saw all three versions.

My first stop was The SHARE Food Program garden. SHARE is a nonprofit organization serving a regional network of community organizations engaged in food distribution, education, and advocacy. The gardens are on every possible piece of land around the massive warehouse located on Hunting Park Ave in Philadelphia. A nice surprise was to see a Penn State Extension’s High Tunnel right next to the TastyKake Factory. By the end of summer 2011 ten high tunnels will dot the city landscape helping to feed and educate a greener Philadelphia. http://extension.psu.edu/philadelphia/news/2011/penn-state-extension2019s-high-tunnel-alliance

Penn State High Tunnel at Philly’s SHARE garden.

My next visit was to see our former intern who spent the 2007 season with us at Scarecrow Hill in Lancaster County. She told us she was planning to farm in Philadelphia, and by jove, she’s done it! The dreamy secret garden was an abandoned lot full of junk, including two ice-cream trucks when Amanda Staples and Matt McFarland purchased it in 2008. Now the ½ acre Germantown Kitchen Garden http://germantownkitchengarden.blogspot.com/ grows 30 crops which provides for an 8 family CSA and a farm stand which operates on Wednesdays afternoons at 215 E Penn St Philadelphia, PA 19144. A fun surprise was to see a former CSA shareholder of Scarecrow Hill stopping by the stand. Local has gotten a whole lot more local for this committed foodie.

Amanda at her farm stand, with lush urban farm in background.

My final stop of the day was at the Elkins Estate, Elkins Park, PA. This 42 acre oasis was rescued from demolition in 2009 by the Land Conservancy of Elkins Park Inc. Land, greenhouses and packing house are rented to Streamside Farm whose mission is to improve community access to healthy food and offering educational programming. The farm is run by Meei Ling Ng and her husband Larry Shaeffer. http://www.streamsidefarm.org/ Their produce and beautiful flowers are sold at food co-ops and farmers markets in the Philadelphia area.

Philadelphia is really leading the way in urban farming. There are many more thriving urban farms to visit and buy from in the Philly region. To learn more, see links below: http://www.philly.com/philly/food/20110721_City_s_new_wave_of_farmers.html
http://www.dailypennsylvanian.com/article/urban-farms-surge-around-philadelphia
http://roxborough.patch.com/articles/seeing-the-citys-farms-on-two-wheels-2

I think you would be especially excited to see the Grumblethorpe, Teens 4 Good, and Schuylkill Center locations: http://www.nbcphiladelphia.com/news/green/Kids_Grow_as_Their_Garden_Grows_Philadelphia-126047298.html

Written by Peggy Fogarty-Harnish

Do consumers know where their produce is grown?

2011-07-14T12:42:00.011-04:00

Over the past few months, I've been posting about research done at Penn State on mid-Atlantic consumers and their purchasing habits. One of the most interesting questions (by my own beliefs) was in regard to what produce is not grown in the mid-Atlantic.

Responses for participants who answered that they did purchase products from farmers’ markets were then compared to responses for participants who answered that they did NOT purchase from farmers' markets. Of the non-farmers' market shoppers, responses were compared pertaining to participants’ belief of what particular fruits and vegetables (bananas, lettuce, apples, lemons, tomatoes, mangoes, potatoes, grapes and avocados) are NOT grown in the mid-Atlantic region.

Figure 1 shows that more participants who shopped at farmers' markets were able to correctly identify which fruits and vegetables are NOT grown in the mid-Atlantic region and fewer of these participants incorrectly selected produce that IS grown in the mid-Atlantic region. For example, a greater percentage of participants who purchased from farmers’ markets (82%) correctly selected bananas as being NOT grown in the mid-Atlantic region compared to 74% of participants who reported not purchasing from farmers’ markets.

Read the full press release here.

Does this mean that people who shop at farmers' markets know what produce is grown in the mid-Atlantic because they see it at the farmers' market? This may be true, but approximately 20% of participants who shopped at farmers' markets indicated that fruits such as lemons, mangos, and avocados were grown in the mid-Atlantic region. It could be that they are attending farmers' markets that sell local and non-local items. This data may also mean that consumers simply don't know where their produce comes from. As an ag entrepreneur, this may be a great time to educate people as to what is fresh, local, and in season!

How can new and beginning farmers overcome overwhelming obstacles?

2011-07-08T15:30:00.004-04:00

No one ever said farming was easy. Young and beginning farmers may face extra challenges too. These include high start up costs, availability of land, and cost of land, equipment, seed, livestock, feed, and fertilizer. Ben LaCross, 31, of Cedar, Michigan is a young farmer. He was interviewed by The Lempert Report on how he views these challenges. He states that, "The payout schedules for harvested crops can be spread out over the course of the following 12 months after harvest. That cash flow bottleneck makes it hard for anyone just to jump into farming."

Although these may seem like huge barriers, there are still opportunities for young and beginning farmer hopefuls to join the farming profession. Some young and beginning farmers are doing so by thinking of unique ways to solve these issues. Some examples:
-Working for a farm and gradually deferring salary for equity.
-Renting land and/or equipment from a retired farmer.
-Building a relationship with a farmer who is close to retirement and may be willing to sell you land at a fair price.
-Finding mentors to help you make difficult decisions and give advice.

If you are someone who has recently started farming, what barriers did you have to overcome to become a farmer? If you are someone who is a veteran farmer, what advice can you give to young and beginning farmers?

Horse Progress Days

2011-07-08T13:39:00.003-04:00

The 18th Annual Horse Progress Days 2011 was held on July 1 & 2 in Kinzers, Lancaster County, PA, home of the highest concentration of horse drawn manufacturers and horse farmers in the world. For the first time, the event featured two full days of produce equipment demonstrations, and seminars about successfully growing and caring for produce. Penn State Educators played a vital role in the educational programming including Tim Elkner on “Diagnosing Plant Problems,” Steve Bogash on Use of Tissue Testing for Fertilizing,” and Jeff Graybill on “No Till Farming.”

The heart and soul of Horse Progress Days is the equipment demonstrations. Over the past several years the no-till movement has caught on within many of the plain communities. This is especially true of the Amish dairy and tobacco farmers. This trend has primarily seen growth in row crops such and corn and soybeans, but also alfalfa. Penn State Extension in Lancaster County was awarded a grant in 2007 to build a prototype no-till transplanter. The planter was designed and built by the Agronomy educator with input from several local Amish farmers. To date, three planters of this type have been constructed with approximately 300 acres of mostly tobacco, but also pumpkins, broccoli, cabbage and cauliflower have been planted no-till. The original unit was on display and demonstrated at Horse progress day.

Horse Progress Days’ Mission Statement is “To encourage and promote the combination of animal power and the latest equipment innovations in an effort to support sustainable small scale farming and land stewardship. To show draft animal power is possible, practical and profitable.”

Agricultural and Penn State Extension Direct Marketing Specialists, Peggy Fogarty-Harnish and John Berry conducted two panels for folks interested in sustainable, local foods marketing as new opportunities arise for increasing farm profits. A Co-op Growers Panel on Friday afternoon featured three local cooperatives, Lancaster Vegetable Growers Cooperative, Lancaster Farm Fresh Cooperative and the newly formed Oasis at Bird-in-Hand all of which have provided new opportunities for produce growers in the county over the past few years. Saturday’s Community Supported Agriculture (CSA) Grower’s Panel discussed ways for consumers to buy seasonal food directly from a farmer throughout the season by purchasing a weekly share. Experienced producers and managers shared their knowledge, discussed logistics and answered questions. Other Penn State displays included Farm Food Safety and Food Preservation.

In keeping with the theme of “Something for Everyone,” the event was one to bring the whole family. Children were especially happy to see the playground area and the petting zoo. Kay Moyer, Penn State Extension Farm Safety Specialist hosted a child safety area which was very busy with approximately 4,500 people visiting the hands-on activity stations. About 3,000 “I visited the Safety Area and Petting Zoo at Horse Progress Days” safety activity books were given to the children who attended. This twelve page culturally appropriate Anabaptist activity book was created to reinforce the education provided at the children safety area and included: machine safety, animal safety, Poison safety, and 911/emergency safety. The event was a great success with over 10,000 people attending each day. In 2012, the event will be held in Michigan.

Written by Peggy Fogarty-Harnish (pfogharn@psu.edu)

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 14

2011-06-24T16:16:00.007-04:00

Continuing on with the Penn State study on Mid-Atlantic consumer purchasing habits, the researchers asked participants about their gender. Across four surveys, approximately 75% of participants who indicated that they were the primary food shopper for their household were female. Of these primary food shopper participants, they were also asked about where they shopped.

A total of 1,553 (Survey 1) and 1,518 (Survey 4) participants residing in metropolitan areas of New York City, Philadelphia, Baltimore, Washington, D.C., and Richmond were surveyed. Data analysis revealed that a significantly greater percentage of female participants shopped at farmers’ markets (Survey 1; 71.7% of females vs. 65.5% of males) and selected farmers’ markets and Community Supported Agriculture (CSA) farms as their primary produce retailer (Survey 2; 36.4% of females vs. 30.4% of males), compared to male participants. Results are exemplified in Figures 1 & 2 below.

Figure 1

Figure 2

Press release

As an ag entrepreneur, do you find this data to be true? Are most of your customers female? Do you specifically market towards women? What kind of marketing do you do that is tailored to females?

Exploring the Gluten-Free Market

2011-06-17T15:59:00.004-04:00

In recent trips to the grocery store, you may have seen products labeled as “gluten-free” and you may be wondering what exactly that means.

According to Wikipedia, “A gluten-free diet is a diet free of gluten. Gluten is a protein found in wheat (including kamut and spelt), barley, rye, malts and triticale. It is used as a food additive in the form of a flavoring, stabilizing or thickening agent, often hidden under ‘dextrin’. A gluten-free diet is the only medically accepted treatment for celiac disease, the related condition dermatitis herpetiformis, and wheat allergy.” Celiac disease affects at least 1 in 133 Americans, states Celiac.com.

Since people who are on a gluten-free diet cannot eat products made with wheat, rye, or barley, many products on grocery shelves are off limits. By selling gluten-free alternatives, food producers can tap into an emerging market. Datamonitor (a company specializing in data analysis for the retail and consumer packaged goods industries) reports that there is major growth in the gluten-free market. Global sales are expected to reach more than $4.3 billion within the next five years. The U.S. market is expected to grow by more than $500 million by 2014, which would make the United States 53% of the global market.

If you are a food producer, this emerging market may seem tempting. But you must do the appropriate research before moving into this (or any) marketplace. Gluten-free is not only a diet necessary for a digestive condition; people without digestive diseases are also moving into the gluten-free diet. This may mean a burst in the market place in a few years similar to the low-carb or Atkins diets. On the contrary, you might find in your research that the gluten-free market is solid based on the demand by celiac and wheat allergy sufferers. Datamonitor analyst Mark Whalley says, “Brands should focus on appealing to a broader audience to strengthen the long-term prospects of gluten-free food. However, they cannot lose sight of the fact that core consumers of the products will always be Celiacs, so relying on consumers outside of this demographic in the long term will prove to be a very risky strategy.” No one can tell you which way to go, but by performing adequate research, you can determine if the gluten-free marketplace (or any new marketplace) is right for you.

As an ag entrepreneur, do you currently sell any gluten-free products? If not, have your customers been asking for them? How easy/difficult would it be to offer a gluten-free product?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 13

2011-06-10T15:22:00.007-04:00

In the last post, I discussed some Penn State research involving consumers' willingness to pay for organic produce. To continue on with that subject, the PSU researchers also studied the demographics of the survey respondents.

One question asked participants if they purchase certified-organic fruits and vegetables. Based on their response (yes or no), participants were then tested for any significant differences between demographic groups (metro area, gender, age, ethnicity, income level, education level, number of adults living in household and number of children living in household) to examine if certain consumer segments were more likely to report purchasing certified-organic produce.

Testing revealed that a significantly smaller percentage of participants with an annual income level below $25,000 purchased organic produce as compared to those with an income level of $100,000 or greater (Figure 1).

Figure 1

Also, a smaller percentage of participants age 21 to 24 reported purchasing organic produce compared to participants age 26 to 36 (Figure 2).

Figure 2

In addition, the data showed that a smaller percentage of participants who had received at most some high school education or were high school graduates purchased organic produce compared to participants with either an associate’s/technical school degree, bachelor’s degree, or master’s degrees or higher (Figure 3).

Figure 3

Click here to read the full press release.

As an ag entrepreneur selling (or not selling) organic produce, what does this mean for you? Would you change your marketing techniques to target people in these demographics? Do buyers of your organic produce fit these demographics? Is this data surprising to anyone?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 12

2011-05-27T14:08:00.004-04:00

As a food producer, setting a price for your product can be difficult. When setting a price, you must consider product production costs, competitors, target customers, and product qualities. One example of a production cost (and subsequent product quality) is producing certified organic products. In 2010, Penn State researchers conducted a study on consumer purchasing habits. One question asked participants how much they would be willing to spend on a pound of certified organic apples compared to a pound of non-certified organic apples priced at $1/pound.

As you can see by the graph below, 32.1% of respondents said they were unwilling to pay more for organic Gala apples. Conversely, 57.6% indicated that thy would be willing to spend at least $1/pound for organic Gala apples.

This survey only asked respondents about organic Gala apples, but this specific example can be helpful in understanding consumers' willingness to pay for organic produce in general. To read more about this study, please read the press release.

When pricing your organic produce (or any product), you must carefully position your price to attract the most buyers. It is extremely important to inform and remind consumers about the product attributes and proposed benefits of your product through appropriate advertising and in-store promotions. Want more help in pricing your product? Check out our Value-Added Marketing Series. We have a publication titled "Product Pricing: What Do I Charge?" which will give you some good info on pricing your product!

Craft brew- Is it right for you?

2011-05-13T13:32:00.004-04:00

Beer industry sales as a whole dropped 2.2% in 2009 and 1% in 2010, but craft brewer sales are up 12% (as reported by the Brewers Association). What exactly is a "craft brewer"? The Brewers Association describes a craft brew as "small, independent and traditional. Small: Annual production of 6 million barrels of beer or less. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition. Independent: Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer. Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor."

Some facts about the craft brew industry:
-Growth of the craft brewing industry in 2010 was 11% by volume and 12% by dollars compared to growth in 2009 of 7.2% by volume and 10.3% by dollars.
-1,759 craft-breweries were in existence in 2010 (up by 100+ since the previous year) and over 600 are being planned.
-Craft brewers sold an estimated 9,951,956 barrels of beer in 2010, up from 8,934,446 in 2009 (11% increase).

Is this an industry for you? As always, DO YOUR RESEARCH! The Brewers Association website offers some great materials on getting started in this industry. Their business help includes marketing tools (press releases, a media list program, sell sheets, etc), an export development program, and label approval guidance for the Tax and Trade Bureau. Some other things to think about if you are considering entering the craft brew industry:
-What type(s) of beer do you want to offer (stout, lager, porter, etc)?
-What ingredients do you need and how easy/difficult is it to obtain these ingredients?
-What training do you need in beer-making?
-What supplies do you need(bottles, tanks, boxes, etc)?
-What are your state's laws on producing and selling alcohol?

The above points are just a glimpse at the many, many questions you will need to answer before entering this or any industry. As always, Penn State Extension is here to help you in this process!

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 11

2011-04-29T16:23:00.004-04:00

Continuing with the Penn State research I've been writing about the past few months, a series of questions asked participants to indicate their purchasing behaviors towards new varieties of fruits and/or vegetables. If participants indicated that they noticed and purchased a new variety of a fruit or vegetable, they were then asked to indicate how strongly they agreed or disagreed with a list of reasons for purchasing a new produce variety.

For the participants who noticed and purchased a new variety, they reported, on average, that they “somewhat agreed” to purchasing a new produce variety (an average of “5,” according to a scale, with “1” equaling “strongly disagree,” and “7,” “strongly agree”) because of the “visual quality” of the produce, that the “appearance of the produce was appealing,” and that they “enjoyed trying new foods,” as shown in the graph below. Participants also reported that they “somewhat disagreed” (an average of “3”) to purchasing a new produce variety because the “item was featured in an advertisement.” Additionally, they reported being “neutral” (an average of “4”) towards “price” of the new produce variety for choosing to purchase.

To read more about this topic, please see the press release.

As you can see by the graph, "visual quality" and "appearance was appealing" are 2 of the 3 highest ranking reasons for trying a new produce variety. As an ag entrepreneur, how do you showcase your new offerings? As a consumer, how do you agree/disagree with these results? What are your most important reasons for trying a new produce variety?

Get Marketing! Use Foursquare to Your Advantage

2011-04-27T16:52:00.000-04:00

For owners of smartphones (iphone, androids, etc.) foursquare is a fun little application to download and use on their phones. It's a location based application that lets users "check-in" at whatever location they may be at. Check-ins are shared with other foursquare users, either all users or a smaller designated circle of friends. For instance, when I come to work I check-in at my building - Armsby Building - as do some of my foursquare using colleagues. And we've created a friendly competition out of this resulting in me being the "mayor" of Armsby (i.e. I've checked-in most often during a 60 day time period).

But foursquare can be, and is, more than a fun game. Businesses can use foursquare to their advantage as a marketing tool. At the most basic level, it can be considered "word of mouth" advertising. Think of the power in having a foursquare user check-in at your business or market on a regular basis and that being shared with all of their friends! Beyond that though, you can use foursquare to offer specials to your foursquare-using customers. You can create a mayor's special, loyalty special, and newbie special, among others. Think of it as electronic couponing - rewarding those who visit you.

Analysis of foursquare data is also available - a must for determining value in your foursquare use. You can keep track of the number of check-ins, what time of day check-ins occur, as well as age and gender breakdown - all for a variety of timeperiods.

Hopefully you're intrigued. If so, check out this article from Mashable.com about how to get started with foursquare marketing. Foursquare itself also provides lots of assistance and information for businesses on using the application.

New USDA BioPreferred Label Launched

2011-04-22T15:20:00.003-04:00

On March 31, 2011, the USDA launched the BioPreferred label program. According to the 2002 Farm Bill, “biobased products are commercial or industrial products (other than food or feed) that are composed in whole, or in significant part, of biological products, renewable agricultural materials (including plant, animal, and marine materials), or forestry materials…and biobased intermediate ingredients or feedstocks.”

This broad definition may bring about images of “eco-friendly” products, but is that really the case? A product only needs to contain 25% biobased content to qualify for this label. The label also doesn’t distinguish if the product was created with sustainable agricultural practices.

As an ag entrepreneur that produces these kinds of products, do you think the BioPreferred label helps or hurts your business? Do you think it helps or hurts your industry? As a consumer, do you think this label brings about clarity or confusion about these types of products? Will you be looking to purchase products with this label?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 10

2011-04-15T10:33:00.006-04:00

Are you curious as to why people buy organic produce? Continuing with the research conducted by Penn State on consumer purchasing behaviors, reasons why people buy organics was specifically studied.

A series of questions asked participants to indicate their certified-organic purchasing behaviors including whether or not they purchased certified-organic fruits and vegetables. Participants who responded “Yes” to this question (34.2%) were then prompted to answer two additional questions: a) how frequently they purchased certified-organic fruits and vegetables and b) for what reasons they decided to purchase certified-organic, as opposed to purchasing conventional options. 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%).

Additionally, when participants who reported purchasing certified-organic produce were asked if a given “concern” encouraged them to purchase such produce, as opposed to purchasing conventionally-grown produce, a variety of concerns appeared to impact their purchasing decision. For each of the concerns presented, participants responded that they “Agree” to “Somewhat Agree” that the individual concern positively influenced their decision to purchase certified-organic fruits and vegetables. For example, participants responded that when making a fruit or vegetable purchasing decision, they “Agreed” that the “impact of pesticides on the environment” concerned them (see graph below).

To read more about this topic, please visit midatlanticspecialtycrops.com.

As an ag entrepreneur (selling conventional produce), what does this information mean to you? If you are selling organics, how does this information align with what you hear from your customers?

What Can I Rent My Land For?

2011-04-07T11:30:00.000-04:00

Last night I received an email from someone interested in knowing what they could rent some acreage for. This is not an uncommon question, but it does pose difficulty in providing a specific dollar figure (which is what folks typically are looking for). The problem in giving people a specfic amount lies in the fact that there is no one correct answer...even for two parcels that may be adjacent to each other. There are numerous factors that go toward determining an appropriate rental rate and it is subjective to a degree on the land owner's answers to some questions which follow.

Land rental questions to consider:

Is there an alternative use for the land that you're renting? Does the alternative use create revenue? If so, how much? Land with alternative uses for generating revenue can potentially demand a higher rate.
What are your for tillable land factors in the areas of soil quality, field size and field topography? Large fields with higher quality soils that have more desireable topography can demand a higher rental rate than fields with poorer quality soils, small acreage, or less desireable topography.
Are there similar rentals available in the area? If so, what are they charging? Sometimes this is difficult to find out so you may have to work on gut feelings as to what a going rate in the area may be. Areas of PA, such as the Southeast, tend to have higher rates than other areas.
How much are taxes on the land? This is a cost in addition to general maintenance (for laneways, etc.) that needs to be built into a minimum rental fee. Whatever the amount ownership costs add up to be needs to be covered.
Is there more than one party interested in renting what you have available? If so, what would they use it for? Sometimes, depending on the intended use for what's being rented you, the owner, may want to charge less or more. So for instance, if you as a land owner are passionate about organic agriculture, you may be willing to rent land to an organic producer for less than what you would rent to someone using conventional methods. You should still charge enough to cover your costs, but to support organic agriculture you may be willing to forego some profit. If there are multiple possible renters and use doesn't matter, determine the minimum rent (based on expenses), determine what you'd like to receive in rent and see who will pay that rate. Negotiation can follow from there if needed.

Finally, not related to rental rate, but still important, you should have a written contract. The contract (at its minimum) should spell out the rental rate, length of use, and any restrictions on use.

Making the Most of Your Domain Name

2011-04-06T17:13:00.004-04:00

If you've decided to start a website for your business, you must first buy a domain name (aka a web address like www.psu.edu). A quick google search for hosting companies will bring back hundreds of companies that sell domain names. Choose one that has good reviews and the payment options you prefer.

Once you've decided on a hosting company, you need to choose what you want your domain name to be. In the article "Do's and Don'ts of Securing a Domain Name" on Entrepreneur.com, author Jane Porter describes some important things to consider when choosing a domain name.

1. Include a location or keywords in your domain name, if you can. When Mikalai Krivenko needed a domain for his painting business in Hoboken, N.J. in 2009, he chose hobokenpainter.com, which shows up at the top of keyword searches that include "Hoboken" and "painter." Whether it's location, or what your company does, Krivenko advises: "Put the most important keyword for your industry in the domain name."

2. Register yourself as the owner of the domain name. "It's just like a piece of property. If you don't own the property, you can't sell an existing business," says Jean Bedord, a Silicon Valley-based search consultant and author of the book I've Got a Domain Name--Now What???.

3. Remember to renew your domain name registration. If you lapse in renewing your registration, another company can buy your domain name and then you are out the domain name you have been using. Customers might lose touch with you because they can't find your website.

4. Don't use dashes, abbreviations or numbers in your domain name. "You get much more word-of-mouth if it's a name you can easily say without having to spell out," says Fan Bi, owner of clothing line Blank Label. His website traffic rose 25% when he changed from blank-label.com to blanklabel.com.

5. Don't waste money on extensions other than .com. "The reality is you have to pay for every one of those. The value is really in the .com," says Bedford.

6. Don't buy a domain without checking into its past. Even available domains can be exposed to legal trouble if the name is too similar to another company's trademark.

As an ag entrepreneur, do you have a website? How did you choose your web address?

Thinking About Starting a Business: Things to Consider

2011-04-01T10:26:00.003-04:00

The purpose of this blog is to help future and current entrepreneurs make educated decisions about their businesses, so I thought it would be helpful to review what things you should consider BEFORE opening your business.

The Fox Business Small Business Center has a nice slideshow titled "10 Steps to Start a Business". This checklist is a great way to get a quick overview of tasks to do if you are thinking of starting a small business. There is a lot of work involved in starting up a small business, so this list can help you determine if entrepreneurship is right for you. If you go through the checklist and are confident that you want to open a small business, then you can get more in-depth information on how to complete these tasks from Penn State Cooperative Extension and your local Small Business Development Center.

The Checklist
1. Create a Business Plan
2. Get Business Assistance and Training
3. Choose the Right Location
4. Finance Your Business
5. Determine the Legal Structure of Your Business
6. Register a Business or 'DBA' Name
7. Get a Tax Identification Number
8. Register for State and Local Taxes
9. Obtain Business Licenses and Permits
10. Understand Employer Responsibilities

As a current ag entrepreneur, did you consider all of these things before opening your business? Do you have any advice for future entrepreneurs on how to complete these tasks? Are there any other things you would add to this checklist?

Facebook Questions Allows for Even More Interaction

2011-03-28T16:08:00.000-04:00

It seems like Facebook is releasing a lot of business-oriented features lately. Well, Questions may not be strictly biz related, but it definitely has potential to help you engage with your followers and others. For details from Facebook, check out this site. I have been toying with it and can share the highlights.

Essentially, Questions allows you to ask a question of your followers. (What did you expect?) You can ask an open-ended question (one that can be answered in any way) or a poll question (one that has multiple responses that can be chosen). If you ask a poll question, you have the option of allowing people to add responses or to be limited to those you have provided. Additionally, a person can add a "post" about a question. That is, they can leave a comment of any sort, similar to comments that can be added to status updates, pictures, or other types of content.

Once asked, the question goes first to your friends. They can, of course, ignore it completely (and most probably will). However, they have a few other options. They could answer it, "follow" it, and/or "Ask a Friend." If they answer it, then their friends can see that activity in their feed. In that way, your question could go "viral" by spreading to others who also have the opportunity to answer the question. If they follow it, it is also pushed out to their friends' feeds. However, this also means that they will be able to see how their friends respond to the question. If they "Ask a Friend," then the question is sent to those friends as a notification.

As a user, you can manage your questions by clicking on Questions in the left-hand menu.

So, how might this help a farm or food business?

Ask who may be coming to an upcoming event.
Ask what sorts of foods they like to buy from you.
Ask how often they use your product. For example, a winery may want to know how frequently their customers drink wine.
Ask about how general economic conditions are affecting their purchasing.

Really, you could use this for anything you might want feedback about. But, like most things, you should follow a few simple rules.

Ask clear, concise questions. Make sure the reader can understand what you're asking.
Don't asking anything too personal.
Don't be a pest by asking too many questions.
Because it's SOCIAL media, be sure to respond to posts made about your question, if appropriate.

So, while Questions isn't earth-shaking, I think it does have some potential to enhance your ability to listen to your customers and their friends, and their friends, and...

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 9

2011-03-25T14:19:00.005-04:00

Continuing in the research done by Penn State on the topic of consumer purchasing behaviors, today's post is going to focus on snacking habits of survey respondents.

1,567 total participants from mid-Atlantic metropolitan areas were surveyed on what types of food products they purchased, where they purchased these products, and what factors may have affected their purchasing behaviors. Two particular questions asked participants to indicate from what types of retailers they primarily purchase snacks for themselves and members of their household, and also how many times they snack during an average day.

A majority of participants (64.5%) primarily purchased snacks for themselves and members of their household at grocery stores/supermarkets, with the next largest clusters of participants choosing to purchase snacks from supercenters (11.6%) and warehouse clubs (10.3%). Additionally, the majority of participants (70.4%) reported snacking 1-2 times per day on average, with another 17.5% reported snacking 3 times per day on average.

To read more about the research, check out the press release.

As an ag entrepreneur, how does this research affect you? Do you sell any of your products in easy-to-grab packaging? If you don't, would you consider making snack-size options available?

Collaborating with complementary businesses

2011-03-09T23:54:00.000-05:00

I’m hopeful that spring is just around the corner in the mid-Atlantic and because of my optimism I’ve been thinking of what outdoor project we might tackle this year. Along with making a list of supplies I’ll also need to make a list of retailers I need to visit to purchase everything I need – and hopefully I don’t forget anything on that master list.

Retailers have a natural fit in this plan and can certainly make shopping easier by taking the guess work out of what’s needed to complete a project. For example, what does a customer need to recreate a display garden or outdoor seating area they see at a garden center? Placing plant material used in the display garden next to the garden, for easy retrieval, is the first step but providing a check list of materials needed to complete the job would ensure that the customer is less likely to forget that they also need mulch, landscape fabric, etc.

However, just because an ag business doesn’t sell upholstered patio furniture, grills, decking materials, or grills doesn’t restrict them from inviting complementary businesses to provide these items, brochures and pricing list, along with signage advertising the source (be sure to ask these businesses to reciprocate). A garden center, retail nursery, or even landscaping company could then create a fully outfitted display garden intermingled with plant material, containers, fountains, and signs describing services available.

Other ag businesses could take a similar approach. Wineries, cheese shops, and on-farm markets could develop gift baskets using other local edible and non-edible products ( retail industry sources have indicated that gift basked have been big sellers for many establishments and most likely will continue to be popular for both holiday and non-holiday occasions). Or, these retailers could showcase a local artist’s paintings, sculpture, etc. Signage placed near items for sale could include a full list of the complementary business’s offerings or directions to the artist’s studio.

Cross promotion shouldn’t be limited to just in-store. Rather, consider promoting each others’ logos, websites, etc. on printed materials, talk about each others’ business on social media sites, and link to each others’ web pages. These are just a few possibilities for cross promotion and even tapping into new customer pools. Ag. businesses have been successful hosting events, contests, and sponsoring causes with complementary businesses. Working together can be a win-win situation for ag businesses and the customers they serve.

Adapting flash sales website strategies to drive business to your site and store

2011-03-07T03:53:00.000-05:00

Lately, I’ve been following numerous “flash sales” website sales and promotions. The goal of a flash sale is to drive traffic to a website or store where a single product is offered for a deeply discounted price for a day or less, sometimes below a normal sales point. An article in the February 2011 issue of Wines and Vines lists six flash wine sales websites that “offered 318 wines at average discount ranging from 29%...to 53%” (http://tinyurl.com/65q7fpg). You can find numerous flash sales websites if you are looking for high-end fashion as well as daily deals on events and restaurant meals offered by sites such as Groupon.com.

One of the main benefits for the producer/retailer is the potential to eliminate overstock while reducing the risk that consumers will question the quality of the retailer and product – because of the low promotional price. By only offering the sale for one day it is believed that consumers will: 1) join a business’s email listserve, “like” them on Facebook, follow their Twitter feeds, etc., as these are common ways businesses alert consumers about flash sales; 2) buy items on impulse and focus on the great deal rather scrutinizing the brand/product quality because the item was so cheap; and 3) continue to be on the hunt for other “rare” deals the business offers.

Certainly, the majority of flash sales are promoted by bigger businesses and companies but it would be easy enough for a small or medium sized business to modify the idea. I can think of several garden centers who desire to sell their annuals before summer. The retailer could discount the plant material by 25%, followed by 50% and 75% towards the end of the season, but what if they do not all sell or just begin to look really bad? By promoting a flash sale a bit earlier than the normal discounting period retailers may find a greater number of these plants sell within a very short period of time. Benefits also include a reduced need to care for and water plants during the hot summer months and the potential for customers to purchase more than the flash sale item.

Again, the key is to “surprise” customers, keep the duration of the flash sales short, have stock on hand, and discount products that consumers would have an interest in purchasing. Don’t try to entice consumers to purchase stock that is destined for the compost pile or garbage – you just might lose their loyalty.

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 8

2011-03-04T13:59:00.006-05:00

In previous posts, I discussed research from Penn State about mid-Atlantic consumer food preferences and purchasing behaviors. One particular question asked participants to indicate which category of retailers they believed were more likely to sell fruits and vegetables that are unsafe to eat.

This question brought about some interesting data. Although 30.7% of participants reported that they believed there was no difference in the safety of the produce based on the category of retailer, the remaining majority did indicate categories of retailers that they believed were likely to sell unsafe produce.

Looking at the graph, retailer categories like “Natural Food Store” (1.8%), “Specialty Food Store” (1.5%), and retailers where purchases could be made“Direct from Farmer” (2.4%) were reported to be more likely to sell unsafe produce. As an ag entrepreneur, why do you think consumers feel that natural food stores, specialty food stores, and direct from farmer are the "safest" foods?

As seen in data from previous surveys conducted in 2008, participant belief that a particular category of retailer sells produce that is more or less safe than other categories does not seem to be the deciding factor in where these participants actually purchase fruits and vegetables. Although participants in the previous survey, did (indirectly) report that retail outlets such as specialty food stores, farmer-direct retailers, and natural food stores were less likely to sell unsafe
produce in comparison to other retailer categories, the majority of participants did not choose to purchase fruits and vegetables from retailers they may have believed to have the "safest" produce. As an ag entrepreneur, how do you think you can move consumers to buy from the "safest" produce suppliers? What are your customers saying about this topic?

Do You Really Need Your Own Website?

2011-02-17T10:23:00.000-05:00

Last week, I posted something to my Facebook page (www.facebook.com/jah38; go ahead and send me a friend request) about Super Bowl ads that showed a company's Facebook page rather than a conventional .com page. I missed a few, but brands such as Budweiser, Doritos, and Ritz fell into this category. Why would a company do this? Those pages are only accessible to the half-billion people with active Facebook accounts. Here are some of my thoughts and things you need to consider before going down this path yourself.

1. You can bet they did their research! They determined that members of their target markets were heavy Facebook users. Don't go down this path unless it makes sense for you.

2. Facebook is a known format. Users know what they're getting from a Facebook page. Sure, a company can hire web engineers to create new tabs for a business page, but the look and feel is somewhat standardized. This makes it attractive to consumers.

3. Likes are golden. With a click of a button, a user can choose to receive updates from these brands in the user's news feed. Websites don't offer that. Referring back to a post I wrote last week (Keeping the "Social" in Social Media), Facebook is a leading tool that can facilitate a relationship between a company or brand and the public. It looks like these brands are moving toward relationships rather than simply telling people stuff.

4. Cost may be lower. This isn't so important for a huge company that can afford to advertise during the Super Bowl, but it is for most business owners. Having a basic Facebook page is "free" once you have a computer, internet connection, etc. However, it takes time to manage the relationship with the public. Be sure to build in that hidden cost as you think about this strategy.

So, do you need a website? Probably! Each of these brands still has a website. Most small-scale farm and food businesses, however, can probably have a low frills website with some of the more engaging content on Facebook if that's where the customers are.

Reward Customers WIth Facebook "Deals" & "Places"

2011-02-14T09:53:00.001-05:00

By now, most blog readers surely know all about Facebook, the 800 pound gorilla of Social Media. But Facebook has some relatively new features that can really help to spread the word about your business. Places (www.facebook.com/places) has been live for a few months at this point but Deals (www.facebook.com/deals) was just announced. A business owner with a "bricks & mortar" presence should take note of the opportunities these tools present.

Facebook Places
Places allows a user to "check in" at a given geographic location using any of a variety of "smart phones." (See their website for details on which phones may be used.) A check in is simply a way of telling their friends and the business that the user is in that place. For example, I might check in at Hollabaugh Bros. Fruit Farm & Market (http://www.hollabaughbros.com/) next time I am in Biglerville. If I were to do that, I'd be announcing to all of my Facebook Friends where I am. I can also add text to tell them what I'm doing, how I like it (or don't like it), and that they really need to buy some Nittany apples.

That check in is then announced to at least some of my Friends. (I may have some that I choose not to share it with and still others who may have hidden my posts from their feeds.) The post on their feed will show that I've checked in at a location, the text that I included with my check in, and the names of anyone else I may have "tagged" in my check in. (A tag is simply a way of showing that others were with me when I checked in.) The location name, which would be "Hollabaugh Bros., Inc." since that's their Facebook name, is clickable. If a friend clicks on that, they go to a page with a description of the business (if the business has entered that) as well as an interactive map that can be used to get directions to Hollabaugh Brothers.

A business owner or manager can claim a business through a verification process on Facebook. If you are even thinking about using Places or Deals, you should start that process. This would allow you to track check ins.

Facebook Deals
Deals adds a lot of value to Places by allowing the business to offer, you guessed it, deals to customers who check in using Places. I am providing a short summary here. For all the details, check out Facebook's site including this pdf file that provides an outstanding overview including tips on how to structure a deal and how to manage the process.

You can offer four different types of deals.

Individual Deals - A user is eligible for the deal with one check in.
Loyalty Deals - A user is eligible for the deal with at least 2, but no more than 20, check ins.
Friend Deals - Only users who check in with others are eligible for the deal.
Charity Deals - A check in triggers a contribution to a charity. The business must determine the amount of the contribution and the target charity.

What's In It For A Business?
As I talk to business owners using Facebook, I'm commonly asked how to generate "Likes" on their Pages. Places is a good way to get word out by allowing people to check in at your business and, in so doing, putting the business's name out to their friends. Deals helps by providing a stronger incentive to check in. Like most other Facebook features, Places and Deals are both free of charge. However, there is a footnote on one of the pages in the pdf file referenced above. It says: "Note: Deals is in beta and is available to a limited set of businesses. The product, product availability, and pricing are all subject to change in the future." It may be worth a try whether it's free or not. Offering a discount or free product (for example) along with what is likely to be a small fee, if any, charged by Facebook might be a great investment for many ag and food businesses.

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 7

2011-02-11T13:49:00.002-05:00

Continuing with the PSU consumer research on purchasing behavior, another survey question asked survey respondents about origin of farmers' market produce.

Participants were asked if they purchased fresh produce from farmers' markets. Those that responded ‘yes’(63%) were then asked what percentage of produce grown at the farmers' market they believed was actually grown by the farmers at the market. If they did not believe that 100% of the produce was grown by the farmers at the market (84.6% of participants who shopped at farmers’ markets), they were then asked to indicate where they believed the produce was grown.

Results indicated that approximately 14.4% of participants who shopped at farmers’ markets believed that all of the produce sold at farmers’ markets was actually grown by the farmers at the market. The majority of the participants (53.8%) believed that 50-99% of produce at the market was grown by the market farmers. The majority (67.7%) reported that they believed the produce at the markets were grown within either their state/metro area or the mid-Atlantic region.

press release

As an ag entrepreneur, what is the importance of this data? If you sell at a farmers' market, do you think it is important to advertise the origin of your produce? Why do you think only 14.4% of respondents believe that all of the produce sold at farmers’ markets was actually grown by the farmers at the market?

Make the Most from Your Social Media Presence

2011-02-10T12:19:00.000-05:00

How many Facebook fans does your business have? How many Twitter followers? 25? 500? 1000? Now, what's the quality of your relationship with those fans/followers?

In Jeff's last post he talked a bit about staying engaged in the social media world. On the heels of that, I thought this article from Dermot McCormack, Executive VP of digital media at MTV, was worth sharing. Yes, I know, you're probably thinking "but my business is NOTHING like MTV!" or "MTV is a huge corporation, I'm just a small farm." While that may be true, it is important to note that we often learn from others. The "others" do not need to "look" like us to glean valuable lessons that can be applied to our specific situation or circumstances.

With that in mind, Mr. McCormack offers these 5 tips to strengthen social media presence:
1. Get Organizational Buy-In and Investment. Make sure that everyone involved in the business recognizes the value to your social media presence and are invested in making that presence a success. Even if there are only two of you, you should both be on the same page when it comes to social media.

2. Develop an Intelligent and Flexible Organzation Structure. When a business employs more than one person, we tend to assign people certain areas of responsibility. While this makes sense for something such as handling finances, when it comes to social media, you wants to share all aspects of the business. Get someone from each aspect of your business involved - production, maketing, retail, etc. This ties directly in with the next tip...

3. Diversify Content to Appeal to a Range of Interests. It can get boring to followers, fans, etc. when you only share information of one sort. Let's say you raise beef cows and direct market cuts. Your social media friends want to hear more than just production stats or cooking tips. Mix it up. Maybe one day you share a family tip on grilling the perfect steak, while the next you share your pick to win the Daytona 500. Just as you discuss a multitude of topics with your friends and family on a daily basis, do the same with your social media followers.

4. Speak in an Authentic Voice. Be yourself. You don't want your messages to sound like they were randomly generated from a computer, but rather from a human.

5. Listen and Take Notes. Putting information and messages out into the social realm is fantastic, but if you're not listening to feedback to those messages you may be really missing out. Take time to answer questions, respond to criticism, ask for input.

We try to follow these tips, and it can be difficult at times, but there is a definate payout when it comes to quality interaction. Quality relationships, whether with customers or the public at large, can determine long-run success.

Keeping the "Social" in Social Media

2011-02-08T15:01:00.000-05:00

I met with someone today and had a great conversation about using social media (SM) to promote her business. She manages promotions for a new retail business and is exploring all sorts of media avenues for advertising and promotion. She's doing some great stuff and is excited about the prospects for her business. She also has some wonderful ideas for using SM as part of her promotional portfolio of tools. The conversation reaffirmed some thoughts in my mind that should be shared. I want to discuss two thoughts: 1) the discussion about your business is likely to be happening already and 2) SM is about relationships over "just selling" product.

If you think of SM (eg, Facebook, Twitter, foursquare, MySpace, ...) as different means of engaging in a discussion with people (customers, potential customers, critics, etc.) then you are on the right track. I recently heard Max Spiegel (Twitter @MaxSpiegel) describe SM as walking into a dinner party and mingling. In that environment, you'll often walk into conversations that have already begun. In the same way, it's very possible that your business or product(s) are already being discussed online. You can choose whether to engage in the chat or walk away.

If the chat's about you, you'll probably want to stay engaged and sway the discussion, respond to positive and negative comments, and otherwise show that you know what you're talking about (build credibility). As a business owner, this communication will truly be two-way. You will get to hear from the public in ways that you couldn't before. It also allows you to respond to them as well as provide promotional messages. Do keep in mind that SM users usually like to engage, not simply receive updates. So plan to listen to them and respond as needed.

As you send and receive messages, you will be developing a relationship with your followers/friends (depending upon which SM service we're discussing). There is a critical difference between having customers and having relationships. Though clearly related, many customers want to have a relationship with many types of businesses. If you have a retail store selling food or other ag-related products, you might be a good candidate for effectively using SM to generate relationships. Many want to connect with their food source. However, relationships take time to develop and manage. If you want to develop relationships, there are a couple things you need to do.

1. Make time to engage. If you have to, make an appointment with your computer to check your SM accounts for comments/questions or other feedback. This needs to be done daily. You also need to provide fresh content frequently.

2. Get a smart phone. Although definitely not required, they sure help! Check your accounts from your phone, post updates, pictures, links to other materials, etc.

To be successful, you'll ultimately just need to work SM management into your daily management routine. We humans invest time in the relationships that matter to us. From a business perspective, few relationships matter more than the one you have with your customers, collectively or individually.

I'm curious to hear feedback on how you see business owners/managers managing their SM presence. Let's hear it!

Leading the Way

2011-02-08T11:50:00.000-05:00

Sometimes being an entrepreneur means having to tackle the challenges that come with being the first to do something a particular way. As in the story shared below, this meant taking the time and effort to work with state regulators to demonstrate that a particular processing method, while not in large-scale use, is safe and effective. Not only did this farmer's efforts help him achieve his goals, but it allowed others to follow his path.

GA dairy farmer helps pave the way for other small-scale operators

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 6

2011-02-04T15:59:00.002-05:00

As described in my earlier posts, Penn State researchers asked survey participants from metropolitan mid-Atlantic cities about their product purchasing behavior. In one particular question, participants were asked to review a list of 46 common fruits and vegetables that are readily available at a variety of retail outlets and indicate which of the fruits and vegetables are grown in the mid-Atlantic region.

Results from the survey indicated significant differences for responses to this question between participants who reported being a member of a CSA (Community Supported Agriculture) and those who reported that they were not CSA members. A greater percentage of participants who belonged to CSAs selected more incorrect responses than did participants who did not belong to CSAs. For example, a greater percentage of CSA members reported that certain fruits and vegetables, such as bananas and grapefruit, are grown in the mid-Atlantic compared to non-CSA members. Additionally, a smaller percentage of CSA members correctly reported that other fruits and vegetables are grown in the mid-Atlantic, such as beans, corn, and apples, compared to non-CSA members.

To read more about this study, click here.

If you are a produce grower or seller in the mid-Atlantic, how do you think these results affect your business? Have you had a significant amount of people asking for produce not grown in the mid-Atlantic? If you are a CSA provider, will you start (or do you currently) education on what produce is mid-Atlantic based?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 5

2011-01-28T10:18:00.004-05:00

Another area for the PSU researchers to study was the effect of children on household preferences for locally grown and certified organic produce.

The responses suggest that a greater percentage of individuals who had children in the household selected options that emphasized “Certified Organic,” while individuals without children were more likely to select options that included “Locally Grown.” For example, the first set of options (where both were “Locally Grown”) shows a greater percentage of consumers with children (65.7%) compared to those without children (60.3%) selected the option that included “Certified Organic.” In Set 2 (both “Certified Organic”) and Set 3 (neither “Certified Organic”), those with no children in the household preferred the “Locally Grown” option by 5 to 6 percentage points.

One explanation for this difference is that individuals may have the tendency to purchase organics for their children to eat but they are not necessarily purchasing it for themselves to consume.

To read more about this survey, please read the press release.

As an ag entrepreneur, how can this information be used to position your food products for these demographic groups? If you sell organics, are most of your organic purchases from parents? How do the terms "certified organic" and "locally grown" affect consumers' perception of your products?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 4

2011-01-21T17:38:00.003-05:00

In the continued Penn State research, consumers in metropolitan areas of the mid-Atlantic were surveyed on what types of food products they purchased, where they purchased these products, and what variables have affected their purchasing behaviors.

Survey respondents were asked to indicate which products they would be more likely to purchase if the product did or did not have a certain label (i.e. natural, certified-organic, locally grown, sustainably grown, green). There was an upward trend in both education and income levels indicating that they would still purchase products without the given labels.

To read more about this topic, go to the Mid-Atlantic Specialty Crops website and click "Newsroom".

Why are consumers of higher income levels and education responding this way? It may be because these consumers are choosing products because of other aspects besides the primary label. For example, these consumers may be less influenced by claims made by the product's primary label but more interested in the ingredient list.

As an ag entrepreneur, what do you think about this research? Do you have any of the above mentioned labels on your product? How do you think these labels are perceived by consumers of higher income and education?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 3

2011-01-14T17:54:00.002-05:00

In the research conducted by Penn State, participants were surveyed on what types of food products they purchased, where they purchased these products, and what variables may have affected their purchasing behaviors. Two questions specifically asked participants to provide an approximate percentage of how much (quantity) of their average weekly food purchases consisted of “fresh” products versus “processed” products, and what percentage of these weekly food purchases could be categorized as
“meat,” “vegetables,” “grains,” “fruit,” “dairy,” “snacks,” and “sweets.”

Survey participants reported that approximately half of their food purchases could be categorized as “fresh”. Approximately 36% of their purchases could also be categorized as “fruit” and “vegetable” products, while “meat” products were reported as the majority of food purchases (20.2%).

Notable trends include differences between:
1) age groups – A greater percentage of the older age groups purchased meat and vegetables than younger age groups
2) education level – A greater percentage of the more educated groups purchased vegetables and fruits and a smaller percentage of the same groups purchased snacks than less educated groups
3) gender - A greater percentage of males purchased meat but fewer purchased vegetables and fruit than females

To read more about this research, please see the press release.

As an ag entrepreneur, how does this research affect your marketing? Have you seen these trends in your own sales?

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 2

2011-01-07T12:41:00.006-05:00

Continuing with the series on the PSU survey, more research has been released regarding produce purchasing behaviors of different age groups. (Sorry for the long pause between blog posts. I was on maternity leave.)

One question focused on the origin of common fruits and vegetables available at mid-Atlantic produce retailers. Participants were provided with a list of 46 fruits and vegetables including such items as apples, bananas, mushrooms, potatoes, and watermelon and were asked to indicate which of these fruits and vegetables are grown in the mid-Atlantic region.

Overall, 38 of the 46 fruits and vegetables listed were shown to exhibit significant differences between the age groups in regards to what produce they believe is grown in the mid-Atlantic region.

Some important findings include:
1) Generally, the older a participant was, the more likely he or she selected the correct fruits and vegetables, meaning that more of the older participants selected fruits and vegetables actually grown in the Mid-Atlantic, as well as NOT selecting fruits and vegetables that are NOT grown in the Mid-Atlantic. The younger age groups tended to select more incorrect responses than the older age groups.

2) The 21-24 year old age group was the exception to this generalization, as more of the participants from this group would select more fruits and vegetables to be grown in the mid-Atlantic region.

To read the full press release, please visit http://bit.ly/htN67X

As an ag entrepreneur, how does this information affect you? Will you use advertising to teach your customers about what produce is from the mid-Atlantic region? Do you think that incorrectly identifying the fruit's origin affects the purchasing behaviors of consumers?

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

2010-11-22T11:22:00.001-05:00

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

2010-11-11T08:00:00.000-05:00

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

2010-11-08T11:50:00.000-05:00

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

2010-11-08T11:48:00.000-05:00

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

2010-11-04T11:47:00.000-04:00

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

2010-11-01T08:00:00.000-04:00

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

2010-10-27T08:00:00.000-04:00

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!

2010-10-23T08:00:00.000-04:00

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

2010-10-19T08:00:00.002-04:00

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?

2010-10-15T08:00:00.000-04:00

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

2010-10-12T08:00:00.001-04:00

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

2010-10-08T17:47:00.004-04:00

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."

article

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

2010-10-08T08:00:00.001-04:00

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

2010-10-05T08:00:00.001-04:00

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

2010-10-01T08:00:00.001-04:00

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?

2010-09-24T16:32:00.002-04:00

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!

Tailgating article

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

2010-09-17T15:08:00.002-04:00

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.

article

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?

2010-09-09T13:24:00.003-04:00

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.

2010-08-27T13:56:00.004-04:00

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?

2010-08-20T12:29:00.004-04:00

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

2010-08-16T08:51:00.001-04:00

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

2010-08-13T13:18:00.007-04:00

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

2010-08-10T13:47:00.001-04:00

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

2010-08-06T12:30:00.007-04:00

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?

2010-07-30T20:47:00.005-04:00

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

2010-07-28T10:45:00.000-04:00

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

2010-07-09T13:25:00.004-04:00

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?

2010-06-25T13:20:00.002-04:00

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

2010-06-17T10:24:00.004-04:00

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

2010-06-11T15:12:00.006-04:00

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?

2010-06-11T12:29:00.010-04:00

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?

2010-06-04T15:08:00.008-04:00

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

2010-05-27T15:29:00.003-04:00

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

2010-05-13T13:18:00.005-04:00

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

2010-05-05T11:06:00.006-04:00

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

2010-05-03T09:30:00.000-04:00

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

2010-04-29T13:16:00.003-04:00

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

2010-04-28T11:04:00.001-04:00

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?

2010-04-22T13:01:00.001-04:00

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?