Marketing Local Beef in Tennessee: Producer Practices and Consumer Preferences
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1 Marketing Local Beef in Tennessee: Producer Practices and Consumer Preferences Results from producer focus groups conducted by: Megan Bruch, Susan Schexnayder, Margarita Velandia
2 Participant s Profiles Participants 18 Farms # of participants # of farms Murfreesboro Pleasant View Pigeon Forge
3 Participants Profile Characteristics Average Range Acres Farm: Lease (acres) (10 leased 0 acres) Own (acres) (1 owned 0 acres) Years Marketing Beef to Consumers Approx. Head of Cattle Marketed as Meat to Consumers in Last 12 Months months 50 years
4 Participants Profile Other products sell directly to consumers 5 only sold beef
5 Market Channels Farmers Markets ( 55%) From the farm (55%) Specialty Grocers Butcher Shops (22%) Restaurants (22%) CSAs (11%) LocalHarvest.org (5%) On-line Sales
6 Farmers Markets PROS Price set by farmer Builds a pool of repeat customers through building relationships Exposure/Opportunity to build relationships with other potential buyers (Restaurants, CSAs) Facilitates consumer education CONS Time consuming and time away from farm Farmers markets (FM) are seasonal/ FM season overlap not ideal with best slaughter time Logistics may be a challenge (loading/unloading, transportation, electricity sources, booth set up) Time investment in building buyers trust / Educating consumers on product safety Sales variability due to weather and demand
7 From the Farm PROS Good opportunity for producers with established customer base Good Margins - small transaction costs, price set by farmer Immediate payment Facilitate year-round sales Opportunity to sell other products and services Ability to plan a market day Ability to offer more variety of cuts Lower labor/time Ability to better set visit time, payment types, expectations of visit CONS May be difficult to acquire new customers Remote farm locations may diminish opportunities for on-farm sales May require large freezer storage space Additional investments to guarantee a positive customer experience (bathrooms, farm appearance) Liability of having customers on the farm Scheduling appointments may be challenging
8 On-line Sales PROS Potential to reach a large pool of potential customers Facilitates delivery information CONS Additional effort to maintain consistent customer base Expensive packing and shipping
9 Specialty Grocers/Butcher Shops PROS Potential for high volume/consistent sales Potential for winter sales Excellent exposure to the farm brand Butcher shop and some grocer stores provide processing, reducing cost CONS High volume requires high production Wholesale/discounted price Logistics may be a challenge (deliver to store) but less than other market outlets Establishing relationships with grocers and butcher shops
10 Restaurants PROS Potential for high volume of sales Consistent volumes/yearround (for some restaurants) Exposure of farm brand (if farm brand is identified) CONS May exclude small producers Inconsistent/ Unpredictable demand (for some restaurants) Price lower than retail/discounted price
11 CSAs PROS Costs covered up-front as consumers pre-pay Demand/production volume known Cuts not selling well may be moved through shares CONS Price fixed before production (lack of flexibility to adjust to cost changes)
12 LocalHarvest.Org Free access PROS Exposure to a large pool of customers looking for local products Price set by producer No cost associated with website management On-line store opportunity CONS Payments delayed Commission taken by the website/additional cost (if use store option)
13 Customer Characteristics Curious ask questions mostly about production methods. Females account for most buyers. Seem to be motivated by health. Male buyers may be more motivated by quality (marbling, etc.) Variety of income levels. Variety of income levels. Lower income customer buy ground beef and soup bones. Older customers looking for beef like they had when they were growing up. Younger customers looking for specific production practices (no added hormones). Customers with special health needs. Ethnic groups looking for special cuts (oxtail, tongue).
14 Promotion Strategies Website/blogs Facebook/Twitter Pick Tennessee Products Local Harvest Local Table Craigslist Donations (brand exposure and strategy to attract new customers) Newspapers Referrals Very few use discounts
15 Pricing Strategies Pricing for profit (knowing cost of production). Pricing based on competitors prices. Other producers Traditional and specialty retail stores Testing prices to identify consumer willingness to pay. Price differentiation by outlet (different prices at different farmers markets).
16 Questions Asked by Customers Is product Natural? Organic? Local? Grassfed? Grain fed what kind, source, GMO? Use pesticides? How finished? From your farm? In a pasture? Confined? About the farm
17 Other Information Needed How to Store Defrost/thaw Cook Recipes Cooking loss
18 Fresh vs. Frozen Most beef sold frozen. Fresh beef sales are to restaurants, butcher shops, and limited special orders. Customers misconceptions about quality of frozen beef/customer education about frozen products.
19 Most Popular Cuts New customers try ground beef then maybe steaks on next purchase. Steaks sell out first. Roasts by special order or during winter. Providing recipes may help
20 Quantity and Frequency of Purchases Repeat purchases dependent on taste and quality Likely dependent on freezer capacity and access to producer East TN farmers market customers purchase small amount weekly Middle and west may purchase larger quantities less frequently monthly for example
21 Packaging Vacuum sealed packing (customer wants to see the product). Costumers preferences: 1 lb ground beef package, single steak packages.
22 Payment Types Accepted Credit cards Those that do not accept have lost sales Cash Checks EBT When available through farmers market
23 Challenges Regulations intimidating but doable Time Start-up Build customer base Variability in production costs Distance to and availability of processors Regular and advance scheduling helps Limited labor, land and financing for scaling up
24 Marketing Local Beef in Tennessee: Producer Practices and Consumer Preferences Results from producer focus groups conducted by: Megan Bruch, Susan Schexnayder, Margarita Velandia
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