Characteristics of Farmer-To-Consumer Direct Market Customers: An Overview

Marketing is one of the greatest single problems facing Northeast farmers. Production of good quality produce is a necessary condition but not a sufficient criterion for profitability. Most agricultural products go through several hands before reaching the consumer. As a result, costs involved in handling, storing, transporting, and distributing food products also increases. It is often contemplated that some of these cost increases are unnecessary or that more of the middleman's profit should go to the farmer.

Farmer-to-consumer direct marketing is a way by which farmers sell their products directly to consumers (Henderson and Linstrom, 1982). Farmers sell their products directly to consumers through several outlets. The most familiar types of outlets are pick-your-own (PYO) farms, roadside stands, farmers' markets and direct farm markets. PYO operations are farms where retail customers harvest their own agricultural products. Roadside stands are mostly temporary structures erected by the farmer to sell his or her produce. Farmers' markets, on the other hand, are places where farmers bring their produce to be sold, while direct farm markets are structures located at the farm used to sell their own produce. Items frequently sold through direct marketing outlets are fruits, vegetables, flowers, nursery products, eggs, and dairy products (Nayga, Fabian, Thatch and Wanzala, 1994).

Farmers view direct marketing as an alternative market outlet to increase their income while consumers see it as a means of gaining access to fresher, higher quality foods at lower costs (Nayga et al., 1994). Consumers also derive cultural and social benefits from direct contacts with farmers, visits to farm and nature (Linstrom, 1978). There is a need to document various characteristics of direct marketing consumers to better serve the needs of the consumers efficiently.The needs of consumers can be met by analyzing the direct marketing consumer behavior and purchasing patterns. The purpose of this research is to determine how well farmer-to-consumer direct markets serve the needs of the consumer by providing an overview of characteristics of direct marketing patrons.

A survey of New Jersey direct marketing consumers was conducted in October of 1994 to collect information on characteristics. Questionnaires were mailed to 500 consumers of direct marketing facilities, identified by Rutgers Cooperative Extension. Of the 500 questionnaires, 198 were returned. Seventeen of these 198 were returned because of incorrect address, or the consumer moved with no forwarding address. Two other questionnaires were received after the compilation and analysis of the data had already begun and were not included. The number of usable questionnaires was 179.

Type of Facilities Utilized and Consumption of Variety of Fresh Fruits and /or Vegetables in Household

Consumers were asked to reveal what type of direct markets were visited to purchase fruits and/or vegetables in 1994 and in the past five years. Table 1 provides percent of respondents who visited various types of direct markets. In 1994, roadside stands rank first as the most visited direct market, followed by pick- your-own, then direct farm market, and, finally, farmers' markets. In the past five years, ranking of the direct markets in terms of number of visitations did not change compared to 1994. Percent of respondents who visited direct markets during the past five years was higher than those who visited in 1994. For those who did not shop at any of the four types of direct markets, "distance/not available" in the area was the most common reason cited for not shopping.

Over the past five years, consumption of fruits in the household has either increased or stayed the same for most respondents. Approximately 2% noted a decrease in consumption of fruits. Similarly, about two-third respondents indicated an increase in consumption of vegetables in the household in the past five years. About 26% indicated that they consumed the same amount as five years ago and 2% indicated a decline in their household consumption of vegetables. In regards to variety, 81% of respondents indicated that their family is consuming a wider variety of fruits and vegetables.

Number of Visits and Amount Spent at Direct Marketing Facilities

Respondents visited the direct marketing facility on an average of 1.46 times per month for a pick-your-own facility. On average, for roadside stands, farmers' markets and direct farm markets, respondents visited 2.16, 1.68, and 1.85 times per month, respectively. More than two-thirds of the pick-your-own respondents implied that they had visited a PYO facility at least once per month. Approximately, half of the respondents visited the roadside stand facility at least once during the month, and one-fifth visited twice. More than half of farmers' market patrons said they visited approximately one time during the month, and more than one-fifth visited the facility twice. More than half of direct farm market respondents indicated visiting the facility once a month. Approximately one-fifth of the respondents visited twice, and more than one-fourth visited at least three times.

For pick-your-own operation, one-third of the respondents stated that their number of visits had increased from the previous year. Approximately half indicated that their number of visits had stayed the same, while 14% indicated a decrease in visits to pick-your-own facilities. Likewise, one-third of the respondents indicated an increase, 15% indicated a decrease and 50% indicated no change in the number of visits to roadside stands. Again approximately one-third of the respondents of farmers' markets and direct farm markets facilities indicated an increase in the number of visits compared to the previous year. Roughly half of the respondents indicated that their number of visits stayed the same and 14% and 11% indicated a decrease in the number of visits to farmers' markets and direct farm markets. In summary, majority of the respondents visited direct markets either one or two times per month. Roadside stands were visited most frequently compared to other outlets. About half of the respondents indicate that their number of visits to direct markets will be unchanged.

The average dollar amount spent at direct marketing facilities ranged from $11 to $19. PYO consumers who responded spent the most with an average of $15.81, followed by an average of $15.48 spent by farmers' market respondents. Direct farm market patrons and roadside stand patrons spent an average of $13.93 and $11.01, respectively.

Expectations of Quality, Variety and Price As Compared to Supermarkets

In regards to quality, 92% of respondents expected better quality produce at direct markets than at supermarkets, while 2% count on worse and 6% expect the same as supermarkets. About half of respondents anticipate more variety of produce at direct market facilities than at supermarkets, while 35% expect less and 16% count on the same amount of variety as supermarket. Prices are anticipated to be lower at direct markets according to 74% of consumers who responded. About 15% of the respondents expect higher prices at direct market facilities than at supermarkets and 11% do not expect any difference between direct markets and supermarkets.

Uses of Produce, Consumer Intentions to Visit Direct Markets and Methods of Recognition

Of the respondents who described their uses of produce, 96% indicated using it for fresh consumption, 12% froze their produce, 13% canned it, 7% preserved it, and 37% had other uses. It should be noted that some respondents had more than one use of produce purchased from direct markets. Of the nine other uses for their produce, the following were indicated: cooking, drying herbs, and saving. When asked if they intended to visit New Jersey direct markets in 1995, 73% of the respondents replied yes. The primary sources of information reported to locate direct markets were Rutgers Cooperative Extension leaflet, passing by, newspaper, and word of mouth. Other sources of direct markets reported were book, New Jersey State Agriculture Department, Town Landmark, and New Jersey Tourism Board.

Common fruits purchased at direct markets were apples, peaches, strawberries and blueberries. Other fruits mentioned were melons, watermelons grapes, plums, bananas, nectarines, grapefruits, cherries, blackberries and pears. Common vegetables purchased at direct markets were sweet corn, tomatoes, peppers, and broccoli. The other vegetables mentioned were snap beans, carrots, potatoes, lettuce, eggplant, cauliflower, zucchini, squash, cucumbers, green beans, lima beans and spinach.

Majority of the respondents fell under the age category of 36-50 years old. This was followed by the 21-35 age group, the 51 -65 age group, and the over 65 age group. Of the respondents who revealed their gender, approximately 77% were female. Most of respondents either had some college, a bachelor's degree, some graduate/professional school or graduate/professional degree. The ethnicity of 80% of the respondents was Caucasian. The remaining 20% was made up of Hispanics, African Americans, Asian/Pacific Islanders, American Indian and other ethnicity. The respondents households mostly consisted of two adults and one or two children. The ages of the adults ranged from 19 to 95. The annual household income of 32% of the respondents was at least $70,000, while 15% was between $60,000 - $69,999 and 16% indicated their income was between $50,000 - $59,999. Twelve percent of the respondents had household incomes between $40,000 - $49,999 and 14% of the respondents had household incomes between $30,000 - $39,999. Only 10% of the respondents indicated that their incomes below $30,000. The majority of the respondents consider their neighborhood to be suburban. Only 17% think of their neighborhood as an urban area and 9% regard their neighborhood a rural community.

Direct marketing of agricultural products helps producers increase net returns in addition to retaining agricultural lands in or near suburban and urban areas. Farmers view direct marketing as an alternative way to capture more of the consumer's dollar, while consumers welcome the opportunity to get fresh, high quality produce at lower costs. A mail survey of direct marketing consumers was conducted in 1994 to document the characteristics of customers.

The survey indicates that more than 60% of respondents visited one of the four direct marketing facilities in 1994 with roadside stands being visited most often. Similarly, more than three-quarters of respondents had visited direct marketing facilities in the past five years. The average consumer visited the roadside stand 2.16 times per month, direct farm market 1.85 times, farmers' markets 1.68 times, and pick-your-own facility 1.46 times per month. The average amount spent per visit was $11.01 at roadside stand, $13.93 at direct farm markets, $15.48 at farmers' markets and $18.81 at pick-your-own facilities.

These results identify several avenues for Extension programming to potentially improve both the profitability of direct marketing operations and the quality of service to their customers. For instance, the number of visits made by the consumers to a direct market facility can be improved by strategically locating the operation. Extension educators may work with the marketer to identify a suitable location for a direct marketing facility. Provision of a wider variety of fruits and vegetables may not only increase the demand on the consumer side but also increase the profitability of the operation. Consumers are interested in "one-stop" shopping for most of their needs. Extension educators may also help direct marketers identify the needs of consumers. The quality of the produce provided by the direct marketing operations play an important role in attracting customers. The number of visits to direct markets can also be improved by the provision of most commonly demanded fruits and vegetables such as apples, peaches, strawberries, tomato, pepper and sweet corn.

Henderson, P.L., & Linstrom, H.R. (1982). Farmer to Consumer Direct Marketing: Selected States, 1979-80 (Statistical Bulletin No. 681). Washington, D.C.: United States Department of Agriculture, Economic Research Service.

Linstrom, H.R.(1978). Farmer to Consumer Marketing, (Report No. ESCS-01). Washington, D.C.: U.S. Department of Agriculture, Economics, Statistics, and Cooperative Service.

Nayga Jr., R.M., Fabian, M.S., Thatch, D.W., & Wanzala, W.N. (1994). Farmer-to-Consumer Direct Marketing: Characteristics of New Jersey Operations (Publication No. P-02453-1-94). New Brunswick: Rutgers University, New Jersey Agricultural Experiment Station.