OVERVIEW OF FARM DIRECT MARKETING INDUSTRY TRENDS

Abstract

BackgroundDuring the early part of this century, the US food production and distribution system was more regionally self-sufficient.After the second World War, production and distribution shifted from a regional to a national/global system.Improved transportation afforded buyers the opportunity to source supplies nationally becoming less dependent on local supplies from farms at terminal markets.Supermarket chains began coordinating purchases through a central warehouse.Consequently small producers unable to meet price, volume and delivery requirements, either went out of business or turned to direct marketing as a means of diversifying income and capturing a share of the consumer dollar.In response, pick-your-own operations and farm stands emerged in the late 50's and early 60's.In Massachusetts, farm marketers surveyed a year ago had an average tenure of 40 years in direct marketing.While it has the longest tenure in the northeast, farm direct marketing can now be found in every state.Farmers' markets in the USA have a similar history only their rebirth began a decade later in the 1970's.The central marketplace at the heart of cities at the turn of the century, nearly disappeared with the advent of supermarkets and suburbs.According to USDA-AMS, there were fewer than 100 farmers' markets two decades ago, compared to 2,675 farmers' markets nationwide today.The need for alternate marketing channels for farm goods, along with economic and social forces contributed to the rebirth of direct marketing in the 60's and 70's.Increasing gasoline and food prices made shopping at a farmers' market, farm stands or pick-your-own farms more economical for consumers.Consumers dissatisfied with picked-for-transit produce in supermarkets turned to local farms for in-season fresh quality.Concurrently, the back-to-the-land movement in the late 60's and early 70's produced a new generation of farmers who followed organic practices, and consumers who wanted healthy foods less dependent upon fossil fuel for production and transport.Producer motivation to retain a greater share of the consumer dollar and to earn an equitable wage that affords them the opportunity to stay in farming has not changed since the 1960's.What has changed in the last 40 years is the portion of the consumer dollar being captured.Expenditures for food consumed at home have increased less than 1% annually since 1970, while expenditures on travel and recreation have increased 5.5% per year.Farm direct marketers have moved from capturing a greater share of the consumer food dollar, to cashing in on entertainment dollars.Consumers have moved from a price/product orientation to a value/experience orientation.To remain viable, savvy farm direct marketers have changed in response to changing consumer interests and lifestyle.