Over the past couple of years, I have become increasingly involved with different projects that involve some aspect of local food system development. Given my interest and expertise, most of the focus has been on differentiating products by promoting the fact that they were produced locally. That is, consumer demand for locally-produced goods creates an opportunity for agricultural and food producers to realize higher margins. How big is this market, though? How much are consumers really willing and able to pay for local foods? Do consumers perceive "local" as being synonymous with other notions such as "small, family farms?"
Recently, I attended the National Value-Added Agriculture Conference. The keynote speaker was Gary Zimmer, a farmer, consultant, speaker, marketer... Gary owns and operates Midwest Bio-Ag, with offices in the upper Midwest. He is an organic farmer who markets a great deal of products in his local region. However, he presented a pragmatic, balanced view on the topic of local foods. What follows is a bit of Gary's thoughts with some of my own mixed in. I'll not presume that Gary would support everything below, so I'll take full responsibility for it. One word of caution: do not infer anything other than what I have written.
It's difficult to argue that there are not very real economic motivations behind how most food is grown and distributed in this country. The US climate is diverse and some things just naturally grow better in some areas than they do in others. We also have distinct growing seasons in most regions. This has led to large-scale production in areas where specific foods can be produced at low cost. That production can also be transported relatively quickly and efficiently to just about anywhere else in the country because of our distribution system. This has led to low-cost food at the retail level, an important objective in this country.
Because the low cost objective has been a key driver of how our food system works today, then it's almost by definition that, in most cases, locally produced foods are not going to be cheaper than if they were grown elsewhere. Scale economies, which lead to lower unit costs, are real. So, from a production cost standpoint, bigger is better. Local foods, in many cases, have been purchased primarily by those with relatively high incomes. They are somewhat of a luxury good, embodying not only freshness but support for local economies, etc. This begs the question, if locally produced foods are healthier and fresher, how can they be produced in a way that makes them accessible by everyone, even those with relatively low incomes?
We can't really expect the government to make this happen, can we? Is it the government's role to provide the BEST food or food that is GOOD ENOUGH? If the role is not for government to fill, then will the market make it happen? The market rewards production and marketing efficiency. The market got us to where we are. It's tough to fight the market! Consumers vote with their dollars. While many would love to buy food locally, many just can't afford it. Unless costs are lowered, they will continue to buy primarily from large-scale retail outlets. Many argue that we Americans spend less on food than consumers in most other developed countries, and that's somehow not what should be. We also seem to love to spend on our homes, cars, vacations, entertainment, and other items. Getting most people to shift expenses from other things toward food is an uphill fight.
Here's my bottom line: I strongly believe that locally-produced foods are demanded by most consumers. We have a long way to go before we'll be able to have a variety of local foods available to everyone who wants them at prices they can afford. To get there will take an approach that balances market fundamentals (like scale economies, transportation costs, consumer sovereignty) to make it happen.
Wednesday, June 24, 2009
Tuesday, June 23, 2009
E.coli outbreak in cookie dough-- How are you keeping your customers safe?
On Friday, June 12, Nestle recalled all of its refrigerated cookie dough after receiving a product recall recommendation from the FDA. It has yet to be proven what product has been contaminated, but 70 people in 30 states with E.coli strain O157 have eaten raw Nestle cookie dough. E.coli O157 is a very dangerous strain of E.coli that is usually found in contaminated meat. Most adults get better in about a week, but serious kidney damage and death can also occur. Of the 70 known to be infected, 25 had to be hospitalized and 7 had developed hemolytic uremic syndrome, a type of kidney failure.
Dr. David Acheson, associate professor for foods at the FDA has said, "You can't assume it's the usual ground beef or fresh produce." In the past 2 years, there have been major recalls involving peanut butter, pistachios, and frozen pot pies. With a growing list of contaminated product types, identifying a specific contaminant has gotten increasingly more difficult. The FDA is still investigating the cause of the E.coli O157 contamination. They are unsure if a certain ingredient was contaminated or if it was the facility. The facility has been closed temporarily and will lay off more than 200 workers.
NY Times article
CNN article
As a food producer, what are you doing to keep your customers safe? Do you inspect your ingredients (both produced externally and those produced by you) for potential pathogens? Do you have frequent food safety audits (both internally and by an outside lab)? Have your customers raised more concerns recently about food safety?
As a consumer, have you become more concerned about food safety? What can a food producer do to make you feel more reassured about the safety of your food?
Dr. David Acheson, associate professor for foods at the FDA has said, "You can't assume it's the usual ground beef or fresh produce." In the past 2 years, there have been major recalls involving peanut butter, pistachios, and frozen pot pies. With a growing list of contaminated product types, identifying a specific contaminant has gotten increasingly more difficult. The FDA is still investigating the cause of the E.coli O157 contamination. They are unsure if a certain ingredient was contaminated or if it was the facility. The facility has been closed temporarily and will lay off more than 200 workers.
NY Times article
CNN article
As a food producer, what are you doing to keep your customers safe? Do you inspect your ingredients (both produced externally and those produced by you) for potential pathogens? Do you have frequent food safety audits (both internally and by an outside lab)? Have your customers raised more concerns recently about food safety?
As a consumer, have you become more concerned about food safety? What can a food producer do to make you feel more reassured about the safety of your food?
Monday, June 15, 2009
Bing!
Just this past week, Microsoft has unveiled a new search engine called Bing (www.bing.com) which they are calling a decision engine. According to Microsoft, "Bing is specifically designed to build on the benefits of today's search engines but begins to move beyond this experience with a new approach to user experience and intuitive tools to help customers make better decisions, focusing initially on four key vertical areas: making a purchase decision, planning a trip, researching a health condition, or finding a local business."
As a frequent search engine user, you know (as do I) how most searches are getting to the point of information overload. A recent study by comScore ( a market research company that "provides marketing data and services to many of the internet's largest businesses") revealed that 30% of searches are deserted without a suitable result. Also, comScore discovered that over 65% of searches require a refinement (or requery) on the results page (please see the first link below to watch a video about Bing).
What does this new search engine have to do with you, the ag entrepreneur? Microsoft's research showed that users wanted more help in making decisions with shopping, travel, local businesses, and health. As an ag entrepreneur, you can take this opportunity to add your product/business/service to the Bing Local Listing Center (please check the second link below which will describe how to create a listing for your business). When a Bing user searches for your business, the search results with display driving directions, a 3D aerial view of your business, customer reviews, and more information if it applicable like hours of operation, web pages, email address, payment methods, type of cuisine, languages spoken, parking options, etc.
Bing video
Creating your own Bing listing
Building a web presence is an important part of marketing. Customers are demanding more information about the products and services they use. As an ag entrepreneur, what types of internet marketing are you using? Do you believe Bing (or any other search engine) will bring more customers to you? What are customers saying about your web presence (is it easy or hard to find info on your business)?
As a frequent search engine user, you know (as do I) how most searches are getting to the point of information overload. A recent study by comScore ( a market research company that "provides marketing data and services to many of the internet's largest businesses") revealed that 30% of searches are deserted without a suitable result. Also, comScore discovered that over 65% of searches require a refinement (or requery) on the results page (please see the first link below to watch a video about Bing).
What does this new search engine have to do with you, the ag entrepreneur? Microsoft's research showed that users wanted more help in making decisions with shopping, travel, local businesses, and health. As an ag entrepreneur, you can take this opportunity to add your product/business/service to the Bing Local Listing Center (please check the second link below which will describe how to create a listing for your business). When a Bing user searches for your business, the search results with display driving directions, a 3D aerial view of your business, customer reviews, and more information if it applicable like hours of operation, web pages, email address, payment methods, type of cuisine, languages spoken, parking options, etc.
Bing video
Creating your own Bing listing
Building a web presence is an important part of marketing. Customers are demanding more information about the products and services they use. As an ag entrepreneur, what types of internet marketing are you using? Do you believe Bing (or any other search engine) will bring more customers to you? What are customers saying about your web presence (is it easy or hard to find info on your business)?
Tuesday, May 26, 2009
Killing social fears to become a better networker
Many people feel uncomfortable in meeting strangers. But if you don't meet strangers, how will you build your network? As an entrepreneur, you need to overcome your social fears so that you can talk about your product/service and build relationships with potential buyers, distributors, customers, employees, etc.
In an article for Forbes magazine, Bob Goodyear, technical product manager for Symantec, confesses to being a wallflower and having trouble mingling. On a recent business trip, Goodyear vowed to overcome his fear. Before the event, Goodyear said that he "researched all the companies that would be represented...so that when I saw the company's names on the guest's name tags, I had a piece of information about their firm to use as a conversation starter." Another technique Goodyear uses is to put a time limit on how long he feels he has to mingle. "I tell myself, Bob, there's nothing you can't do for 30 minutes."
Dr. Mark Goulston, a psychologist, has used Goodyear's strategies and has built on them. Goulston sets a goal for himself at social events. For example, he promises "to meet three new people and have them be glad to have met me." Another technique Goulston uses is something he calls "FTD delivery." Get to know people by asking how they feel, what they think, or what they have done or would do given a certain topic. By starting the conversation directed at the other person, you take the focus off of yourself (and lower your stress level).
Ultimately, saying "Hi" is all about believing that you have something worth sharing with the other person, says John Baldoni, a corporate communications consultant in Ann Arbor, Mich. "You can't be afraid of sounding incompetent," he says. "You have to believe that you deserve to have the interaction, that your company depends on you and that you have something to offer the other person in the exchange."
networking article
As an entrepreneur, do you fear social situations? Do you want to become a better networker so that you can attract new customers, distributors, employees, etc? What tips do you have for other entrepreneurs who want to become better networkers?
In an article for Forbes magazine, Bob Goodyear, technical product manager for Symantec, confesses to being a wallflower and having trouble mingling. On a recent business trip, Goodyear vowed to overcome his fear. Before the event, Goodyear said that he "researched all the companies that would be represented...so that when I saw the company's names on the guest's name tags, I had a piece of information about their firm to use as a conversation starter." Another technique Goodyear uses is to put a time limit on how long he feels he has to mingle. "I tell myself, Bob, there's nothing you can't do for 30 minutes."
Dr. Mark Goulston, a psychologist, has used Goodyear's strategies and has built on them. Goulston sets a goal for himself at social events. For example, he promises "to meet three new people and have them be glad to have met me." Another technique Goulston uses is something he calls "FTD delivery." Get to know people by asking how they feel, what they think, or what they have done or would do given a certain topic. By starting the conversation directed at the other person, you take the focus off of yourself (and lower your stress level).
Ultimately, saying "Hi" is all about believing that you have something worth sharing with the other person, says John Baldoni, a corporate communications consultant in Ann Arbor, Mich. "You can't be afraid of sounding incompetent," he says. "You have to believe that you deserve to have the interaction, that your company depends on you and that you have something to offer the other person in the exchange."
networking article
As an entrepreneur, do you fear social situations? Do you want to become a better networker so that you can attract new customers, distributors, employees, etc? What tips do you have for other entrepreneurs who want to become better networkers?
Monday, May 11, 2009
Producing an e-newsletter (that will actually be read)
How many emails do you receive a day that you delete immediately? For me, I'd say a minimum of 50. With the loads of emails we all receive daily, how do you as an entrepreneur create an e-newsletter that doesn't go straight to the trash?
Carmine Gallo recently wrote an article for BusinessWeek about his interviews with Dave Robinson, VP of marketing for Mozy (an online computer backup service), and Janine Popick, chief executive of VerticalResponse (an email and direct marketing provider for small businesses). In his interviews, Gallo searched for advice on getting customers to read e-newsletters.
Robinson advised that you should only send an e-newsletter if you have something relevant to say. He said, "if it's not interesting to our customers, we're wasting their time." Popick also commented that entrepreneurs should share their expertise. A "how to" article or "five easy steps to (fill in the blank)" are great ways to engage customers, but remember, keep your articles short, sweet, and instructive.
When a customer signs up for an e-newsletter, they are making a request for updates about your business. Don't disappoint. Popick said, "be specific regarding the frequency of your newsletter and the value you will provide." Irrelevant information can easily become frustrating and force your customers to unsubscribe. The marketing staff at Mozy chose to limit their e-newsletters to once a month to prevent diluted content.
One of the best e-newsletter articles is to tell customer stories. Robinson said, "The last thing we want to do is tell a story with a bunch of boring copy and bullet points. The best best way to tell our story is through real people and their anecdotes....We want people to read our newsletters and look forward to them. If it's all about the company-- give us more money-- it turns people off."
Important points to remember when writing an e-newsletter
1. offer expert advice
2. stay true to customer expectations
3. use customers to tell stories
4. deliver great content and the money will follow
e-newsletter article
As an entrepreneur, do you send out e-newsletters? After reading this post, will you be modifying the content and/or frequency of your e-newsletters? What feedback (positive or negative) have you received about your e-newsletters thus far?
Carmine Gallo recently wrote an article for BusinessWeek about his interviews with Dave Robinson, VP of marketing for Mozy (an online computer backup service), and Janine Popick, chief executive of VerticalResponse (an email and direct marketing provider for small businesses). In his interviews, Gallo searched for advice on getting customers to read e-newsletters.
Robinson advised that you should only send an e-newsletter if you have something relevant to say. He said, "if it's not interesting to our customers, we're wasting their time." Popick also commented that entrepreneurs should share their expertise. A "how to" article or "five easy steps to (fill in the blank)" are great ways to engage customers, but remember, keep your articles short, sweet, and instructive.
When a customer signs up for an e-newsletter, they are making a request for updates about your business. Don't disappoint. Popick said, "be specific regarding the frequency of your newsletter and the value you will provide." Irrelevant information can easily become frustrating and force your customers to unsubscribe. The marketing staff at Mozy chose to limit their e-newsletters to once a month to prevent diluted content.
One of the best e-newsletter articles is to tell customer stories. Robinson said, "The last thing we want to do is tell a story with a bunch of boring copy and bullet points. The best best way to tell our story is through real people and their anecdotes....We want people to read our newsletters and look forward to them. If it's all about the company-- give us more money-- it turns people off."
Important points to remember when writing an e-newsletter
1. offer expert advice
2. stay true to customer expectations
3. use customers to tell stories
4. deliver great content and the money will follow
e-newsletter article
As an entrepreneur, do you send out e-newsletters? After reading this post, will you be modifying the content and/or frequency of your e-newsletters? What feedback (positive or negative) have you received about your e-newsletters thus far?
Monday, May 4, 2009
Educating customers through YouTube videos
YouTube is a video sharing website where users can upload, view, and share video clips. Have you ever used YouTube? Many people use YouTube for comedy and music, but can it be used as a tool for educating your consumers?
Lauren Luke is a cosmetics entrepreneur. She is a self-taught makeup artist who has used YouTube videos to educate consumers on makeup application. Her videos include experimenting with bright colors and recreating celebrity looks. Why are her videos successful? Luke is a "girl-next-door" type who offers easy to understand, step-by-step instructions for her customers who have no technical cosmetology experience. Since her first video post 18 months ago, Luke's videos have been viewed over 40 million times.
What does makeup have to do with agriculture? You may have a great product or service, but if your customer doesn't know how to use it or doesn't understand how it can benefit their lives, you won't be successful. Many women are intimidated by the amount of colors and brands of makeup available and don't know how to apply it or what to use. Luke's videos help women learn what makeup is best for their skin and how to use it.
Let's use a home-based jelly business as an example. Customers already know what jelly is and how to use it (spread for toast and crackers), but where else can it be used? You could post a video on creating a marinade with an orange marmalade or mixing a strawberry jelly with a cake mix to create a homemade strawberry cake. Another video idea would be to talk about the ingredients in your products like blueberries which are high in antioxidants and can help protect the body from free radicals. A customer can read a recipe card, but by watching a video, they can see how easily they can recreate your recipe or learn about health information. Also, a video allows your customer to see whom they are buying from--making the sale more personal.
Lauren Luke article
Have you used YouTube videos as a marketing technique? Have your videos helped you to strengthen your customer base?
Lauren Luke is a cosmetics entrepreneur. She is a self-taught makeup artist who has used YouTube videos to educate consumers on makeup application. Her videos include experimenting with bright colors and recreating celebrity looks. Why are her videos successful? Luke is a "girl-next-door" type who offers easy to understand, step-by-step instructions for her customers who have no technical cosmetology experience. Since her first video post 18 months ago, Luke's videos have been viewed over 40 million times.
What does makeup have to do with agriculture? You may have a great product or service, but if your customer doesn't know how to use it or doesn't understand how it can benefit their lives, you won't be successful. Many women are intimidated by the amount of colors and brands of makeup available and don't know how to apply it or what to use. Luke's videos help women learn what makeup is best for their skin and how to use it.
Let's use a home-based jelly business as an example. Customers already know what jelly is and how to use it (spread for toast and crackers), but where else can it be used? You could post a video on creating a marinade with an orange marmalade or mixing a strawberry jelly with a cake mix to create a homemade strawberry cake. Another video idea would be to talk about the ingredients in your products like blueberries which are high in antioxidants and can help protect the body from free radicals. A customer can read a recipe card, but by watching a video, they can see how easily they can recreate your recipe or learn about health information. Also, a video allows your customer to see whom they are buying from--making the sale more personal.
Lauren Luke article
Have you used YouTube videos as a marketing technique? Have your videos helped you to strengthen your customer base?
Tuesday, April 28, 2009
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