This document summarizes a study on improving markets for small and mid-sized organic growers in California. The study found that marketing is a major challenge for most farmers, with issues like volume fluctuations, lack of price premiums, and accessing markets. Buyers also face challenges obtaining consistent supply from smaller farms. The document recommends farmers compete on values rather than price, diversify marketing channels, and improve quality and communication. It suggests buyers educate growers and coordinate supply. Policymakers could support organic programs and connect farmers and buyers online. Non-profits could provide farmer education and distribution infrastructure support.

1. Improving Markets for Small and Mid-sized Organic Growers Ron Strochlic “Growing the Organic Market” CCOF Conference February 19, 2011

2. Background Organic sales up 15-20% per year From $4b in 1997 to $25b in 2009 Organic historically considered a promising marketing niche for small and medium growers – has not been entirely the case Marketing is a key factor constraining the success of small and medium organic farmers

3. Research Questions What are the main marketing challenges facing small and mid-size organic growers in California? Grower and buyer perspectives What are policy & program recommendations to improve marketing for these growers?

4. About the study Interviews/survey with 35 Farmers 22 Buyers 21 Key Informants Survey - 103 farmers 3 Farmer Group Interviews Focus on fruit and vegetable growers

5. Overall findings Marketing is a challenge! For 80% of respondents “Major problem” for half 42% had sold organic product as conventional Most report multiple marketing channels Main channels Direct sales ~ 75% Farmers markets ~ 65% Wholesale ~ 60%

6. Organic Marketing Challenges Need to recoup higher production costs Growth of organic sector and loss of niche markets Certification costs and paperwork burden Competing attributes - “local,” “sustainable” and “no-spray.” Consumer concerns regarding safety of organic products Limited access to organic price information Limited university research and outreach for organic production and marketing Low demand for organic products in certain regions Other challenges are similar to those of all small farmers

7. Main Marketing Challenges Cited by Farmers Volume (too much or too little): 84% Lack of price premiums: 66% Accessing markets: 65% Competition: 55% Price information: 47% Meeting buyer requirements: 37% Language is a problem for most immigrant farmers

8. Buyer Challenges Price “Fair” price based on real production costs is too high for many buyers, esp. institutional settings Transaction costs & logistics Per unit costs are higher when buying smaller amounts from multiple farms Quality, appearance & packing “It’s difficult to get a clean, consistent pack from small growers.” Post-harvest handling is an issue – lack of coolers

9. Buyer Challenges Grower knowledge of business & markets Growers need to know market conditions, pricing & competition before planting Product consistency& availability Buyers need to be assured of certain volume at a certain time “Availability is less consistent and less predictable.” Communication Need for clear and frequent communication. Buyers need to know: What farmers have, how much, when available Need to know this before product is ripe!

10. Buyer Challenges Buyers seeking local organic products also cited challenges connecting with growers Disconnect  need for better systems to provide growers and buyers with information about each other

11. Opportunities Values-based marketing is key Small growers can compete on values, not price Building strong relationships Adaptive, flexible, creative marketing Onlinecommunications & social networking

12. Recommendations - Farmers Small and mid-sized organic farmers can improve their marketing opportunities by: Competing on values rather than price – “telling the story” of their farm Diversified production and marketing Accessing larger markets through coops, distribution hubs and bundled CSAs Wholesale:focusing on quality and appearance, packing, knowledge of the wholesale market, frequent communication

13. Recommendations - Buyers Buyers can improve their ability to source from small and mid-sized organic farms by: Educating growers on quality, communication and business standards Develop cropping plans with growers to coordinate supply and demand Communicating the importance of buying from small and mid-sized farms to customers Supporting marketing coops and consolidation points to reduce transaction costs

14. Recommendations- Policymakers Policymakers can support small and mid-sized organic farmers by: Support for programs supporting organic agriculture Connecting growers and buyers through the development of online databases Preferential purchase of local and organic food by public agencies Expanded land-grant university organic research and outreach Tailoring food safety and direct marketing regulations to the needs of small and medium organic farms

15. Recommendations – NGOs Organizations working with small and mid-sized organic farms can improve marketing opportunities by: Informational exchanges between farmers and buyers Centralized database of farmers and buyers Farmer education - marketing, telling the story, working with wholesalers, online/digital marketing, etc. Supporting distribution infrastructure Technical assistance for limited-English farmers; linking immigrant/minority farmers with their communities Consumer education on organic, food safety and the importance of buying from small and medium organic farms

16. Farmer Interest in Solutions

17. Specific Solutions