What Activities and Events Might Drive Customers to Your Tasting Room? Part 2

By Dr Kathy Kelley--Professor of Horticultural Marketing and Business Management, Abigail Miller--Master's student in the Penn State Plant Sciences Department, and Dana Ollendyke--Extension Associate


In part 1 of this series, we discussed survey results as to what activities and events respondents had the most interest. There are also other opportunities to make connections with local restaurants, cheese mongers, bakeries, chocolatiers, etc. For example, might one (or more) of these businesses create a small tasting plate that could be included in your “premier tasting option?” Or, could it be purchased separately for visitors to enjoy along with a glass of wine they purchase and consume at your tasting room? It is likely that some of your visitors would appreciate the opportunity to try a regional cheese with your wine.

 

Or, you could substitute the palate-cleansing crackers you provide to each taster with a few slices of bread from a local bakery. This is another great way to cross promote with other local businesses. While in Paris this last May, I participated in two separate tasting events at O-Chateau Wine Tasting & Wine Bar (o-chateau.com). Along with a breakdown of what my tasting fee would include (five still French wines and one Champagne, a two-hour session with an English speaking sommelier, and a private tasting room for no more than 12 participants), the description also alerted me that not only would bread be included, but that I would be tasting baguettes from the bakery that supplies items for the president of France. Though some participants might not consider this as being a benefit or anything special, others might find it appealing.

With 70.2% of our participants responding that they would be interested in visiting a winery that offered “holiday events,” consider occasions that might be a good fit with your wine. Commonly celebrated holidays such as Valentine’s Day, Thanksgiving, New Years, and religious holidays might come to mind quite easily, but don’t forget local holidays or events that may appeal to your tasting room visitors. For example, the neighborhood of Bloomfield (in Pittsburgh, PA) holds an annual Italian heritage festival called “Little Italy Days” (http://littleitalydays.com). A winery tasting room could partner with a local Italian bakery to pair wines with Italian pastries.

While a “painting party/class” and “book clubs” were of less interest to our participants, it is possible that such events and activities might still be of great interest to your visitors. As with any new marketing idea or change you make, it is essential to make sure that “it” is a good fit for your business, then trial “it,” and finally evaluate “it.”

Just a few things to think about as you plan your future winery tasting room activities and events. You may want to even consider planning an event to celebrate Wine Tourism Day on November 7th (http://www.winetourismday.org). In its third year, the day is planned to encourage wine tourism businesses, including hotels and restaurants, to offer events as a way “to celebrate the importance (and fun) of wine tourism.” Another opportunity to raise your glass and celebrate!





Additional Research & Thesis Advisory Team Members:

• Jeffrey Hyde, Professor, Agricultural Economics, The Pennsylvania State University

• Denise Gardener, Extension Enologist, Department of Food Science, The Pennsylvania State University

• Brad Rickard, Assistant Professor, Charles H. Dyson School of Applied Economics and Management, Cornell University

• Ramu Govindasamy, Professor, Department of Agricultural, Food and Resource Economics, Rutgers University

• Karl Storchmann, Clinical Professor, Economics Department, New York University; Managing Editor, Journal of Wine Economics

• Rob Crassweller, Professor, Professor of Tree Fruit, The Pennsylvania State

University


The project “Developing Wine Marketing Strategies for the Mid-Atlantic Region” (GRANT 11091317) is being funded by a USDA Federal-State Marketing Improvement Program grant, whose goal is “to assist in exploring new market opportunities for U.S. food and agricultural products and to encourage research and innovation aimed at improving the efficiency and performance of the marketing system.” For more information about the program, visit http://www.ams.usda.gov.

Internet Tools to Help You Learn About New Markets, Part 1

By Dr Kathy Kelley, Professor of Horticultural Marketing and Business Management, and Dana Ollendyke, Extension Associate

In the marketing world, we constantly discuss strategies to increase sales, and these conversations often focus on two options – sell more to your current customers or find new ones.

Most people would agree that it is much easier to meet current customers’ needs and demands because you already have a relationship with them. Therefore, your promotion and advertising “costs” (time and money) should be less than what you might need to acquire new customers.  For this post, we will be using wine as our example.

Imagine that you are looking for new markets to sell your wine to because:

• your wine production volume has increased. 
• you feel you have exhausted the local market and have done your best to attract visitors looking for a tasting room experience. 
• and/or it is essential to investigate new opportunities.

When you first developed your tasting room business plan, you probably gave some thought as to how you would market to consumers and how you would identify potential clientele. If it has been awhile since you’ve reviewed your business plan, you will likely need to update it since your business has probably changed over the years.

 

Customers visiting a winery's tasting room (Photo credit http://bit.ly/1AyDrbl)

Perhaps you not only thought about how you would attract and meet the needs of consumers based on their generation, consumption frequency, and when they drink wine (e.g. while cooking, watching sports, at restaurants, etc), but maybe you even gave some consideration to learning about how different cultures approach wine and include (or exclude) wine from their diets.

We subscribe to several different online newsletters and journals (some of which are international) and regardless of the newsletter/journal’s origin, there is often an article about how a large brand, wine company, or group of wineries are looking to export to emerging markets. Along with providing information about current wine consumption and predictions, wine preferences, and how wine should be presented in the marketing place (cork vs. screw cap, for example), these articles discuss the population of these foreign lands in terms of growth trends, major population centers, generational distribution, major ethnic groups and races, gender breakdown, employment rate, etc. — all of which can help a business determine the viability of the market and to whom/where to market the product.

Though the goal of these articles is to provide information for targeting wine consumers, the information provided can certainly be useful for targeting consumers of any product or service based on specific racial and ethnic heritages.

But how should you begin crafting a strategy to target these consumers?
Winery tasting room owners/operators may be familiar with “who” lives in their city or county, but if you need a refresher or have never really delved into the demographic makeup of these residents, information can be found online in multiple places.

Some of our top picks include:

• The US Census Bureau website.
• Easy Analytic Software Inc (EASI) Demographics tool.
• Small Business Development Center's Geographic Information Systems (GIS) reports.

We will discuss each of these tools in more detail in future posts.

Encouraging Consumer Purchasing, Part I

In past blogs, our group has discussed the importance of providing food samples, mass customization, benefits of offering value-added products, and other strategies to encourage customers to purchase your products.  Each of these is designed to alert and remind customers about what you sell and increase consumer purchases.   In today’s blog, I wanted to provide a few more ideas that can also help increase purchasing.

How many different ways can customers use your products?

Your customers probably have a pretty good idea of how to use most of your products.  Fresh fruit are eaten without any preparation or they can be used as an ingredient in more common dishes, the same with vegetables.  The value-added products that you offer, such as jams and chutneys, can be spread on toast or crackers. 

There is at least a primary and a secondary food use for everything you sell.  But, there are probably many more ways that your products could be used, and the more ways that a customer can use your products – the more products they might purchase.

You might have noticed this strategy on packages of products you buy for your own household or in magazine advertisements.  For example:

• A well-know brand of an instant coffee drink suggests using the powder as a creamer in other drinks.
• “Gourmet” jars of peanut butter suggest uses that go well beyond sandwiches.   Peanut butter is a perfect ingredient for Thai food, African peanut stew, and what would be better than a peanut butter and chocolate s’more (though expect it to be a bit more “gooey”)?  
• Cereals are no longer just from breakfast - they can be used in casseroles, as breading for meats, and so much more.  
• Maybe your soy sauce bottle has been in your pantry or fridge for quite a while and only gets used to flavor rice?  A more prominent soy sauce company developed magazines and online ads with Thanksgiving meal recipes that listed their product as one of the ingredients. 
  
  
  

Of course some of these ideas are not new and novel; and consumers probably have a similar recipe already saved.  But, many times consumers need to be reminded about the multiple uses that a product can provide, or the recipe needs to be promoted at the right time of the year.  Might the turkey basting recipe appeal to consumers during the summer?  Maybe or maybe not, but when a consumer (who is not a vegetarian/vegan or one who doesn’t like turkey) thinks about the meal they will have on Thanksgiving, a majority think of turkey and how to give it flavor and keep the meat moist.  Soy sauce, apparently, can do just that.  

So, how many different ways can a consumer use fresh produce and value-added products you sell?  A search on recipe websites, review of any recipes you may have provided customers in the past, or just brainstorming can provide a fair number of ideas.  Another approach is to look at more traditional recipes and substitute one or two of the ingredients listed with your products to change the flavor, texture, or other attribute. 

Once your list of ideas is complete, think about the timing of when you should promote them on your website, via social media, in newsletters, and using in-store signage.

Next week I will take about a couple of other ways that can increase consumer purchasing.

Emerging Food Trends--Peruvian Items Are On The Rise

If you're involved in the ethnic foods industry (whether that's growing, selling, education, or just plain consuming), I suggest joining the Ethnic Greens and Herbs Workshop Facebook group.  This group was formed to disseminate helpful research information and news regarding the ethnic produce industry to growers, wholesalers, retailers, Extension personnel, researchers, and association representatives.  


Fellow blogger Kathy Kelley recently posted a link to the article "From Aji peppers, amaranth and pichuberries to purple corn and quinoa, Peruvian cuisine is hot, says Packaged Facts".  In the article, results from the 'What's Hot in 2014' survey of American Culinary Federation chefs shows that 57% of respondents "voted Peruvian cuisine the top trend in the ethnic cuisines and flavors category".  The article also reports that "the UN declared 2013 the 'International Year of Quinoa' (a Peruvian staple) and the Culinary Institute of America has declared 2014 to be the year of Peruvian cuisine".

So what kind of foods are popular with Peruvians?

• Purple corn- most commonly used to make chicha morada (a drink) and mazamorra (a pudding). 

  

  Purple corn being sold at a farm market. Photo taken by Kathy Kelley on a 2013 trip to South America.

• Aji peppers- a species of chili pepper.  Aji Amarillo, Aji Panca, Aji Rocoto, Aji Mirasol, and Aji Limo are the most commonly used varieties of Aji peppers in Peruvian cooking.

  

  Aji panca pepper.  Photo from TheHotPepper.com.

• Amaranth- a grain with a high nutrition value; the seeds are consumed whole toasted or milled into flour. 

  

  Amaranth harvest.  Photo from NationalGeographic.com.

• Pichuberry- a polyphenol-rich fruit.

  

  Pichuberry. Photo from LAMag.com.

• Pisco- a grape brandy produced in Peru and Chile.

  

  Two different brands of Pisco.  Photo from wikipedia.com.

Why is this trend important to you, the food producer?  Hispanic and Latino populations in the United States are seeing dramatic increases.  According to the 2010 Census, 16% of the US population were of Hispanic or Latino origin.  (The US Census Bureau defines "Hispanic or Latino" as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.)  The Census also shows that between 2000 and 2010, the Hispanic population grew by 43%, which was four times the growth in the total population.  

With this tremendous growth, Hispanic and Latino customers are not to be ignored.  Are you looking to expand your product line and/or market to a new target audience?  This might be your answer, but as always, do your research to find out if you should start selling any new product or marketing to a new audience.  

Marketing "Sustainable Farming" to Consumers: A Research Review

A recent journal article by Hillary Sackett, Robert Shupp, and Glynn Tonsor includes results that may benefit some readers who are marketing products with a "sustainable" label.  I'll provide the short version here but you may be able to obtain a copy of the work from one of the authors.

Research Motivation & Background

Sustainable agriculture is often described as a farmer working to not only be profitable but also do no harm to the environment and the broader society.  This so-called "triple bottom line" is sometimes referred to as "Profit, People, Planet."  While many in the agriculture industry debate the term, sometimes strongly, it's clear that a segment of consumers make purchases based on their perceptions of sustainability and the practices that make a farm sustainable.  Food marketers need to understand these consumers in order to target promotional efforts accurately.

The researchers used an internet survey to gather feedback from 1,002 people in 2010.  There were two different versions of the survey; one for apples and one for beef.  For each, ten different characteristics of sustainability were defined.  These characteristics reflected 6 production practices, some of which were different between apples and beef.  (For example, one practice for beef was "prohibited use of antibiotics" and one practice for apples was "limited herbicide use.")  Using a method called "Best-Worst Scaling," the researchers repeatedly asked respondents to choose the most and least important options from a group that included six of the ten total characteristics.  By answering this type of question a number of times, with different groupings, the respondent's preferences become clear.

The researchers analyzed the data to determine the relative importance of each of these characteristics.  They did this first for the entire group of respondents and then they used a tool called "latent class cluster analysis" to group similar types of respondents.  The benefit of this type of tool is that the data naturally group themselves rather than the researchers providing their best judgment to group the respondents.  The researchers then explore the clusters to understand the factors that differentiate the clusters.  The results for both types of analysis are useful for marketers!

Primary Findings

Overall, the size of the farm was ranked significantly higher than any other characteristics for both apples and beef.  The factor related to "locally-grown" was ranked 2nd for beef and 4th for apples.  A full set of results is shown below.

Ranked preferences for measures of sustainability on apple and beef farms

The numbers in parentheses show the level of the preference among all respondents.  These can be compared against each other.  Therefore, small farms is nearly twice as important than the second option for both apples and beef.

The latent-class cluster analysis then provided four distinct groups of respondents for apples and five distinct groups for beef.  These are described below.

Apple Cluster Groups

1. Localvores - 14% of respondents fell into a grouping that heavily valued local production.  These also valued minimal herbicide use and preventive/cultural pest control.
2. Small Business Enthusiasts - 30% fell into a group that placed heavy value on farm size and financial stability of the farm.  These also valued several of the production practices roughly evenly.
3. Price-Savvy Shoppers - 10% were consistently most concerned with food prices.
4. Sustainably Indifferent - 46% placed roughly equal weight on the characteristics.  It is not possible to discern whether these respondents care little or greatly about these characteristics; only that they care roughly equally about them.

Beef Cluster Groups

1. Animal Rights Activists - 15% place a great amount of weight on animal safety and pasture-based feed.
2. Nutrition Buffs - 24% place a great deal of importance on limited antibiotic use, growth hormones, and pasture-based feed.
3. Price-Savvy Shoppers - 10% indicate that price is the leading concern.
4. Sustainably Indifferent - 41% fell into this group, as described above.
5. Say No to GMOs - 10% placed full weight on the prohibition of genetically modified livestock.

Putting These Results to Work

The results of this work provide a bit of insight for the food marketer.  Assuming the apple-related results are applicable to other fruits, or maybe produce in general, you can see that themes of "small farms," "Integrated Pest Management," "local," and other production-oriented descriptors could be used in your marketing and promotional materials/websites/social media outlets.  The same could be done for beef (and possibly other meats) based on the beef results.

The research also does a nice job of segmenting the markets.  Based on my readings, I suspect that most of those in the "Sustainably Indifferent" groups are not actively seeking sustainably-grown products.  Of course, the "Price-Savvy Shoppers" are also not in the target market.  Therefore, the article provides some insights into why the others are in the market for sustainably-produced foods.  For apples, some consumers are most interested in buying local.  Others want to support small businesses, whether local or not.  For beef, some are most concerned about animal rights or non-GMOs while others view sustainable products as more healthy.

Use these and other related phrases on your labels as well as your promotional materials.  It should help you connect more deeply with your customers as you hone in on what concerns them the most.  Good luck!

_______________________________________________________________________

"Consumer Perceptions of Sustainable Farming Practices: A Best-Worst Scenario." (2013) Agricultural and Resource Economics Review. 42(2) pp. 275-290.

Adding Value to Farm Food Production

by John Berry, Extension Educator, Lehigh County

Most farmers are on the lookout for ways to generate more net revenue. The question is something close to “What can we do to utilize our resources to their best advantage?” Many opportunities exist, but in order to be feasible they must match the values of the farm family. One common method is the move to identify farm crops as being sustainable. The challenge is how to verify claims and meet the documentation requirements to satisfy buyers. There are several competing verification systems in place that are trying to address this very concern. Some are driven by a singular philosophical mission and others are more inclusive of all those businesses along the chain from farm to fork.

As an example, individual farm operations within the specialty crop supply chain are experiencing increasing demands to demonstrate "sustainability" to their customers. These demands have resulted in a growing number of certification and/or supplier education programs and thus the potential for redundant or even conflicting requirements. Most of these programs focus on a niche market, a limited set of crops, and/or a specific link in the supply chain, and thus are not designed to provide the specialty crops industry as a whole with a comprehensive system for measuring sustainable performance. However, The Stewardship Index aims to provide such a system.

The StewardshipIndex for Specialty Crops project is a multi-stakeholder initiative developing a system for measuring sustainable performance throughout the specialty crop supply chain. The project offers a suite of outcomes-based metrics to enable operators at any point along the supply chain to benchmark, compare, and communicate their own performance. The Stewardship Index does not seek to provide standards, but instead provides a yardstick for measuring sustainable outcomes. In the future, the project may also provide tools and resources to help specialty crop companies advance sustainability goals.

For this project "specialty crops" is defined broadly to include fruits, vegetables, nuts, and horticulture. The founding members of the project regard sustainability as an ongoing process to advance environmental, socially responsible, and economic values. The project does not aim to identify a level of performance that is "sustainable," but instead to provide measures to help all participants implement sustainable values.

Quantitative sustainability metrics, developed collaboratively, can offer significant benefits to specialty crop industry participants, and the eventual consumer. As envisioned, this project will:

·         Help operations across the supply chain (farms, distributors, processors, retailers, etc) identify opportunities for increasing efficiency and reducing costs;

·         Provide a standardized system for measuring performance, thus reducing the potential for duplicate monitoring and reporting systems;

·         Allow individual operators to engage in the sustainability journey starting at (and regardless of) their current level of performance;

·         Address the unique needs of the specialty crop industry while demonstrably improving environmental and social impacts;

·         Enable verifiable marketing claims backed by measurable performance data;

·         Help reduce the likelihood of future industry regulation by solving problems and demonstrating improved performance to regulators.

What Purpose Does Packaging Serve?

Take a minute to think about the last packaged product you purchased.  Was there anything about the package that drew you to it?  Perhaps the size, shape, color, or story about the business on the label?  Or, perhaps you prefer glass to plastic.  I know that when I'm traveling and stop for a snack, I'm usually looking for something in a resealable package (I don't want my snack getting loose in my bag or car, after all!).

I look for resealable packages,
like this one, when traveling.

When it comes to a package, it serves four principal functions:

• Containment - Obviously, with multi-item products, such as my M&Ms, they need to be contained in some fashion.  As do food products such as juices, jams, sauces, etc.
• Protection - There are many reasons we want our food products protected through the use of packaging - protection from the elements, from possible tampering, from shock, vibration, etc.  Packaging helps to ensure that food items are in the same condition when the consumer purchases it as it was when produced.
• Information - Packaging serves as a convenient place to provide a variety of information to the consumer about the product itself, as well as the company that produces it.  Information can range from legal requirements, such as nutritional information and ingredients, to stories about the company background or founders.  Product packaging also conveys information in the form of "trade dress," or the set of visual characteristics that help the consumer identify products from the competition.
• Utility of Use - Let's face it, packaging makes life easier when it comes to using the product, whether it be pouring, dipping, or storing the item.  The right package can make a big difference.

However, packaging also helps with the mental placement of a product in peoples' minds.  I saw this quote in the book Successful Food Packaging Design and wanted to share it:

"Packaging is people's perception of the brand; it's that core....When people think of your product - whatever kind of food it may be - they picture the package it comes in" (Mark Greene, Pecos Design)

Every mix of packaging material(s), color(s), size, and other characteristics sends unspoken messages to your customers about your product.  I'll discuss some of these elements in coming posts.  However, food entrepreneurs should first be concerned about these four functional aspects of packaging.