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Small business at its roots

Wednesday, March 05, 2008

Statistics show two percent of the world’s population grows the majority of food items for themselves and the remaining 98 percent. While that tide isn’t turning very quickly, there is a move toward an increase in growers and direct marketing of food stuffs to consumers nationwide. The most obvious example of this new direction of agriculture production is a throwback to an old idea ... the farmers market.

A meeting was held recently in Fredericktown to discuss the growth of the Farmers Market craze. AgriMissouri® is a project of the Missouri Department of Agriculture. The goal is to promote Missouri-grown products directly to Missouri consumers. One way of reaching the goals of AgriMissouri® is to promote and foster farmers markets across the state.

About two dozen people attended the Fredericktown meeting, one of seven sessions held across the state over a couple month period. The focus of the informational meeting was to train growers on how best to establish a market, market and sell goods through an established market, and abide by the relative state and federal guidelines governing the sale of produce and farm products to the public in an open air market setting.

“We’ve long known that consumers want the local, high-quality, trusted brands that Missouri agriculture has to offer,” says Tony Stafford, director of the department’s Agriculture Business Development Division which administers the AgriMissouri™ Program, on the AgriMissouri® website. “Unfortunately, small producers and companies don’t always have the resources to reach the right consumers. That’s where AgriMissouri® comes in.”

According to Lane McConnell, Missouri Department of Agriculture marketing specialist, AgriMissouri® represents “food and non-food processed products including fresh fruits, vegetables, horticultural products and agritourism destinations throughout the state. The program identifies Missouri brands and destinations through marketing and communications assistance such as advertising, promotions and educational seminars.”

McConnell is overseeing the series of farmers market training sessions, and spends her days working to visit and promote farmer-operated markets, and constantly provide tools and training to allow local growers to improve their own markets ... and, subsequently, their profit margin.

BUT IS IT BUSINESS?

If done correctly, marketing home- or farm-grown or raised products directly to consumers is every bit as challenging as any other small business. Experts suggest the “hobby farmer” — the term often used for part-time, small scale producers — should write a comprehensive business plan similar to one written by a small business owner seeking startup or operating capital from a lender.

Furthermore, McConnell works hard to promote marketing skills among small farmers. Prior to taking her position with the state agriculture department, she earned a degree in marketing and worked for one of the nation’s largest agri-related radio networks.

McConnell says AgriMissouri’s staff works “hard to implement an aggressive marketing plan that focuses on retail, wholesale, food service and direct-to-consumer market channels. We also provide training to our members by offering educational opportunities and access to trade shows.

Ron Hale, of Farmington, serves as current vice-president of the Missouri Farmers’ Market Association. A retired military veteran who now enjoys growing and marketing countless varieties of tomatoes through a farm stand at his rural Farmington home and the local farmers market, Hale makes his case for farmers markets in a very professional, business-like manner. He travels the state attending seminars and addressing groups interested in turning their gardens and hobby farms into small business ventures through direct selling.

But Hale doesn’t stop with selling his wares from the bed of his pickup truck at the open air market either. He has sold directly to restaurants in the past, and recently received a visit from a Chicago restaurateur who had heard of his tasty tomatoes and flew in to sample some of his offerings. The businessman then set out to secure transportation to get Hale’s tomatoes to his Chicago eatery in as timely manner as possible.

Still, farmers markets is what Hale loves to talk about. He sees the significance in presenting himself well to the buying public on market days. His booth is always clean and organized. He takes time to talk with potential buyers, and says a reputation for having good products to sell and being helpful and informative are far better selling techniques than trying to undercut fellow market vendors on price or selling your products at a loss in an effort to compete with other sources of produce.

McConnell says people visit and shop at farmers markets for very specific reasons. They want the best, freshest produce available in their area. In many cases locally grown produce and value-added food products offer health benefits not seen with produce grown half a country, or half a world, away and picked prematurely to allow for ripening during transport to market. Thirdly, McConnell says, the customer who visits a farmers market often wants to identify with the farmer or gardener responsible for growing the food items.

VALUE ADDED

According to the Internet tool Wikipedia, “value added” refers to “the additional value created at a particular stage of production or through image and marketing.

“In modern neoclassical economics, especially in macroeconomics, it refers to the contribution of the factors of production, i.e., land, labor, and capital goods, to raising the value of a product and corresponds to the incomes received by the owners of these factors.”

Using the “value added” concept, producers and self-marketers of produce and other food-related goods can build respectable profits into their merchandise with a lot of research and creative thinking.

Growers can build added value into their products by different methods. An example of products sold “raw” or “as grown” at a farmers market might include cucumbers, blueberries, blackberries, tomatoes or apples. But by adding additional steps and processing those same products a vendor can sometimes increase profits considerably. Examples of “value added” products would be pickles, jams or jellies, salsa, pies, cakes or breads.

The producer simply wants to be diligent in doing his or her homework and accurately determining the additional expense involved in producing a “value added” product from their raw goods — to determine there is in fact additional profit to be made.

Items often found at farmers markets and sold as harvested include any number of heirloom or hybrid variations of cucumbers, squash, potatoes, beans, blueberries, blackberries, onions, beets, turnips, cabbage, tomatoes, corn, fresh flowers, plants, organic or range-fed chickens or eggs. Sometimes the goal of farmers market vendors is have forms of produce or other goods not otherwise available at the market or in the immediate region. Sometimes having one or two unique products — something different, or perhaps a product harvested either early or late into the season as to make it more rare — can be added to the usual seasonal garden crops to make a vendor’s booth more of an attraction for market shoppers.

Value added items can include jams, honey, maple syrup, cakes, pies, breads and other prepared or processed items. Some items require specific guidelines for preparation in accordance to state, county or city health codes. McConnell suggests contacting the local county health department or farmer’s market “master”, the person in charge of the market, to clarify any concerns prior to selling a new product.

Examples of ways a direct marketing farmer or gardener can enhance their products could also include: arranging garlic into decorative braids, putting fresh-cut flowers into bouquets, prewashing and bagging vegetables as opposed to selling them by the piece, or adding suggested recipes to accompany new varieties of produce. AgriMissouri® offers countless tips and tricks to increase profits for small direct market vendors.

As said before, the concept of farmers selling food products directly to consumers is nothing new. The majority of the world still gets its food from open air markets, roadside stands or grocers who sell locally-produced wares. In America the trend has moved toward large chain stores providing all goods, food products and services in centralized locations. But farmers markets are making a comeback as more discriminating consumers — both urban and rural — are choosing to return to their “roots” to find healthy, fresh food to nurture their bodies and minds.

THE NEAREST MARKET

This region boasts a long lists of farmers markets which are open anywhere from summer months only to year-round. Costs to participate and guidelines are varied. Here’s a comprehensive list of what is available at this time.

• Fredericktown — The farmers market in Madison County began in 2005 as an extension of 4-H projects. Students were competing and subsequently had products for sale. An informal “market” was set up near the old train depot and grew in popularity as time progressed. The market is overseen in part by Ivan and Donna Kranjec. The contact number is (573) 783-5526.

This year the market will meet at Madison County Farm Supply. Produce will be displayed and sold on the porch of the store. Small animals (chickens, rabbits, etc.) will be displayed nearby on the parking lot.

The market should open the first weekend in May. It will be open on Saturdays from 8 a.m. until about 1 p.m.

Cost for participating in the market is $2 per year per vendor. In addition to produce, fruit and small animals, the market also features baked goods and other value-added products.

This marks the first year the market is a member of the Missouri Farmers’ Market Association.

• Farmington — The Farmington Farmers’ Market is nearing a decade of providing fresh produce and farm-related products to consumers. The market is set up on the parking lot of the Farmington VFW Hall off Karsch Boulevard each Saturday morning from 7-11 a.m. from spring to fall, and on Wednesday afternoons from 2-5 p.m. during the busier growing season.

The market of operated by Ginny Smith (573-756-2284) and Becky Landrum (573-756-5876) with Hale serving as a founding member and one of the market’s most consistent vendors.

Landrum and Smith explain that everything is locally grown. “If you don’t grow it, you don’t sell it.” Exceptions to that rule include cantaloupe, watermelon, peaches and apples, which are more easily grown elsewhere in the state.

The cost for a farmer to participate in the local market is an initial $25 annual fee and then $5 for each time the farmer sells at the market.

• Park Hills Farmers Market — Also known as MCB Farmers Market, the market features two pavilions located near the Flat River Creek bridge on Business Route 32 near downtown Park Hills.

Lori Bolius serves as the contact person. Her number is (573) 431-3577.

The market was started in part by a USDA grant in 1998. It is open to farmers year-round at no cost. Hours of operation are Monday through Saturday during daytime hours.

The market was rebuilt in 2005 and features six covered stalls and additional covered area. There is no cost for using the stalls, and they are available on a first-come, first-serve basis. The market master asks that vendors limit themselves to one stall, and use no outside signage. Signs can be used within the confines of the booth area.

The market features agri-products only. No flea market or other open market activities.

• Washington County Farmers Market — The market features a 24-by-50 foot pavilion built on a raised concrete platform located on the Washington County Courthouse parking lot near the intersection of North Missouri and High streets.

The market is open during summer months on Saturdays from 8 a.m. to noon, and on Wednesdays from 7:30 a.m. to 2 p.m. at 520 Purcell Drive. The contact person is Frank Letzkus at (573) 438-2671.

An important asset to the residents of Washington and surrounding counties, the Washington County Health Department recently received a WIC Farmers Market grant which allowed them to distribute vouchers for free fruit and vegetables to women and children who participated in the WIC program. The grants show the importance of fresh fruit and produce found at the farmers market.

• Arcadia Valley Farmers Market — The Iron County market is held behind the Iron County Courthouse on Shepard Street in Ironton. The market is seasonal, running from June through October on Saturdays beginning at 7:30 a.m.

The market is overseen by the University Outreach and Extension. The contact number is (573) 546-7515.

• Ste. Genevieve County Farmers Market — The market in one of the state’s oldest communities is held from May through October on Saturdays from 7 a.m. to noon.

The market is located on the corner of Third and Jefferson streets.

The contact number is (573) 543-2562.

OTHER FIELDS

In addition to farmers markets, programs such as AgriMissouri®, the Mississippi River Hills Association® and Missouri Regional Cuisines Project® continue to provide Missouri growers and food producers with ways to market their goods in a business-like manner.

Mississippi River Hills Association was formed a couple years ago to help wine makers, artisans, farmers and agri-entrepreneurs in Jefferson, Ste. Genevieve, St. Francois, Cape Girardeau, Perry and Scott counties promote their wares. The goal of the group is to focus attention on a 90-mile long region known for a rich French and German heritage. One initial goal was to create a trademarked brand or logo to clearly identify all members’ products.

“Ultimately we would love to see the name Mississippi River Hills recognized globally as a name that means quality and good stuff,” said Tish Johnson of the University of Missouri Extension office in Ste. Genevieve, who is the coordinator for Mississippi River Hills. The idea started in 2003 with Dr. Elizabeth Barham, a professor of Rural Sociology for the University of Missouri. It was Barham who spearheaded the Missouri Regional Cuisines Project®.

The Missouri Regional Cuisines Project, or MRCP, was designed to market Missouri wine and food products using distinct labels of origin based on ecological regions of the state. “Labels of origin have been used for centuries in European countries to identify food and wine products based on the region in which they are produced -- allowing the consumer to distinguish among the unique tastes and attributes of products from different areas. This identification of Missouri products will mean greater recognition and economic opportunities for our state’s food producers, tourism industry, and rural communities,” states a Web site devoted to MRCP.

“Regionalization can be an important way to proactively counter impacts of globalization by building a critical mass of interconnected businesses that, together, can map a strategy for their future. While a single small or medium-sized business acting alone cannot put into motion the partnerships with government and education that can secure that future, a viable network of regional businesses connected across sectors can,” explained Barham.

Whether it be through the MRCP, AgriMissouri, an organized farmers market or a roadside produce stand, the fact is that marketing crops and other food-related items directly to the consumer is a small business concept whose time has come ... again. $$