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[20 comments]

Demand grows for farmers' markets

August 6, 2014

Farmers' markets are popping up all over America. According to the U.S. Department of Agriculture (USDA), there are more than 8,200 farmers' markets operating in the country today, a 76 percent increase since 2008.

Growth of the markets is happening all over the U.S. with every geographic region seeing an increase. California, with 764 markets, has the greatest number of any state, followed by New York (638), Michigan (339), Ohio (311), Illinois (309), Massachusetts (306), Pennsylvania (297), Wisconsin (295), Virginia (249) and Missouri (245).

States seeing the greatest growth in farmers' markets are Tennessee, Louisiana, Texas, Hawaii, Massachusetts, Arkansas, North Carolina, Montana, Florida and Nebraska.

Farmers markets are increasingly being viewed as an affordable option for low-income consumers to get access to more nutritious foods. According to an article on the Smithsonian Magazine website, one in four markets accept SNAP (Supplemental Nutrition Assistance Program) benefits. The 2014 Farm Bill allocated $4 million to be used for farmers' markets to add equipment needed for accepting SNAP payments.

The New York Times Magazine's lead food columnist, Mark Bittman, wrote that markets are now participating in programs like Wholesome Wave, which provides eligible customers a double value coupon incentive to buy fruits and vegetables. According to the Wholesome Wave website, the program, which began in California, Connecticut and Massachusetts in 2008, has since expanded to 350 farmers' markets in 21 states and Washington, D.C.

Discussion Questions:

Why do you think there is such a demand for farmers' markets in so many states around the U.S.? Do these markets pose a competitive threat to produce sales at nearby grocery stores?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much of a competitive threat do farmers' markets pose to grocers' produce business?

Comments:

Many would say that they shop farmers' markets because of price. And there are some good deals to be had when there is abundant seasonal supply.

Others would state their reasons as freshness and quality. Farmers' markets are typically local, so the produce is typically much fresher than that shipped thousands of miles to grocery stores.

I truly believe that the biggest draw to farmers' markets is the EXPERIENCE. Many of the farmers' markets have done a good job of merchandising a festival-like environment. In addition to fresh produce, there are food stands, crafts and events complimenting the produce on sale. Being able to talk with the farmers who actually grow the produce is a unique experience that you can't get in-store or from Amazon Prime.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

Of course the farmers' markets are a threat to produce at nearby grocery stores. Between an increased demand for organic products, an increased demand for using local products to decrease the carbon footprint, and the popularity of "buy local" with Millennials and environmentalists, farmers' markets provide a shopping experience for those needs. Some grocery stores are promoting locally-grown products to try to compete with farmers' markets.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

In a word: Authenticity. That's hard to find these days.

Of course the whole "local first" movement is gaining momentum too, but really it gets down to our (life's) most fundamental tethering point—the earth itself. Creation itself; to be a little dramatic. We don't usually get the same warm feeling when we think about the "local" used car dealer, for example. And "Monsanto Fresh Produce" doesn't quite do it either. We want our natural "roots" re-established, figuratively and literally. We want to go home.

It's rather strange that we immediately attach the concept of "threat" to what has kept humans alive since the beginning of time.

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Ian Percy, President, The Ian Percy Corporation

  1. They're fun to shop.
  2. They give you the feeling that you are doing something healthy.
  3. Quality and freshness of the product.
  4. Dealing with people one on one.
  5. Last but not least (and not always true), price.

Do you need more reasons?

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Mel Kleiman, President, Humetrics

There was a recent article in the Chicago Tribune that stated that farmers' markets had become so popular that they were having trouble finding enough farmers to participate. Some were even offering free space as an enticement. Customers are seeking fresh, and nothing creates the impression of fresh like buying it directly from the farmer. Besides, shopping at one can be seen as something different.

Can they impact a local supermarket? Certainly. However, I don't expect to read any articles that indicate a supermarket went out of business due to farmers' markets.

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Steve Montgomery, President, b2b Solutions, LLC

The produce in the grocery stores says fresh, but the farmers' markets ARE fresh. It is a perception on the part of the shopper that the product is better if purchased directly from the farmer. The price is better too. Too many grocery chains have lost their product touch; not many good hands are left in the industry and the larger the chain, the worst the selection and quality. Profits seem to have taken the front seat over quality, from what I have seen.

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Frank Riso, Principal, Frank Riso Associates, LLC

Several factors have impacted the growth in numbers of farmers' markets around the U.S.: supporting local growers, perception of healthier food alternatives, lower prices as compared to supermarkets, live interactions with the farmer and being able to share a fun experience with like-minded shoppers in the community.

Are they a competitive threat to supermarkets? Yes but not a major impact—economically they mimic an 8,000 store chain that's only open one or two days a week for a limited number of hours. But that doesn't mean that in some neighborhoods the impact isn't felt in the produce departments of the local supermarkets. Odds are, with the slowing down of the number of new farmers' markets (a 3.6 percent increase from 2012 to 2013 according to USDA), that these markets are beginning to compete more and more against each other in existing cities.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

As a loyal farmers' market customer, let me say it is a combination of quality, price, some peoples' interest in organic and/or heirloom products, part "support your local economy" and—oh yes—a high entertainment value.

I think the answer to the second question is "no" for several reasons. First, many Americans want all fruits and vegetables available all year long, and that just doesn't happen in farmers' markets. Second, many shoppers like their food a little less, well, food-like—washed and packaged and displayed neatly on a shelf or in a cooler.

Third, a farmers' market is generally an additional stop, and lots of folks aren't cooking enough to justify the loss of time.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

The biggest demand drivers today are go local, farm-to-table and environmentally-friendly. I'm not sure they are a threat to grocery stores in the current format, and find it hard to believe that the growth equates to shoppers and significant revenue loss for grocery stores.

Another driver could be nostalgia. I'm from Massachusetts, one of the states with the greatest growth of farmers' markets. I remember them as a kid and see them now as an adult. When folks went years ago it was "Stop at Harper's Farm on the way home and get corn, tomatoes and zucchini." Not sure that was categorized as a farmers' market back then. Everyone knew when the harvest was and they would sell out.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Farmers' markets satisfy many consumer needs: support of local businesses, fresh product, perceived as more sustainable and often perceived as organically produced. In addition, farmers are the number one most respected occupation in America.

The key for neighboring grocery stores is not to fight farmers' markets. Instead form bases for collaboration. For example, have a produce display featuring products from the local farm, including farm pictures and a story. How about inviting farmers and other local artisans to sell their goods one day a week (non-prime day) in a section of their parking lot?

All of the attributes associated with farmers can extend to grocery stores if the strategy is properly designed and smartly executed.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Depending upon the volumes of product transacted at these farmers' market events, local merchants can begin to feel a negative impact. The more innovative merchants are leveraging these farmers' markets as an additional outlet of their stores by having a presence at the markets themselves. I personally feel that these farmers' markets are great opportunities for small store and large chain operators to leverage the "local" flavor and create a tighter connection with their shoppers.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

There are quite a few farmers' markets in the Seattle area, however their prices are generally close to, and sometimes higher than, most stores. Presumably the produce is picked ripe or closer to ripeness. The definition of local seems to be broad since anything grown in Washington state is marketed as local.

I think the real draw is the sense of community people get from supporting local farmers and businesses. Many farmers' markets also have a variety of vendors selling arts and crafts, kettle corn, and jarred honey and jams you can't get at stores. There are often musicians playing live music, which helps add to the festive atmosphere.

'RetailRetell'

Because prices are usually higher, there is minimal threat to supermarkets. I rarely see low-income people at a farmers' market. One vendor I work with was recently expelled from a farmers' market for selling products too low. It was undermining the other vendors making them look like gougers. They were selling their excess that supermarkets did not buy from them. Some of these vendors are well organized. At one farmers' market I know one family that has about 50 percent of the produce stands, placed at various points, appearing to be competing but they arrive and leave in the same truck. They repeat this every weekend at several other farmers' markets bringing in over $2 million a year to be shared with large extended family. The demand is not so much healthy food but it's a form of entertainment. It's also a good way to be able to negotiate for your food. I'm still amazed at how many people will actually pay what the vendors ask. I like to go to farmers' market about 15 minutes before closing when they are practically giving away perishable products. They can be affordable if you time your visit and are a good negotiator.

David Livingston, Principal, DJL Research

In my area the farmers' market is a source of reasonably-priced decent fresh produce. I can get red tomatoes that taste like tomatoes instead of the "cardboard-flavored" ones constantly being sold by the local chain supermarkets for twice as much. I would hope that the competitive threat to the chains would encourage them to do a better job of sourcing. While this is difficult due to GOVERNMENTAL health regulations, many produce items can be sourced locally with a little effort. I would expect that sourcing locally would cost much less that operating a "loyalty program" and produce much more consumer satisfaction.

Ed Dennis, Sales, Dennis Enterprises

My wife and I live in a rural area with a rather large working farm right next door. In the surrounding area there are two of the largest farmers' markets in the state. The markets have indoor and outdoor vendors with the bulk of their trade being done on Thursday, Friday, Saturday and Sunday throughout the year. The non-food vendors are becoming more and more scarce as time goes by and we remain in this awful economy. The crowd sizes for the farmers' market produce, poultry, dairy and meat vendors are increasing, and their day is often done before noon because they are out of stock for the day.

Local farm food products of all kinds are selling at increasing rates in spite of pressure from the grocers and farm stands. As for the farm next door, customers arrive at daybreak and during the afternoon rush hours in crowd sizes that have continuously increased over these past four-to-five years. The morning crowd comes in trucks and vans, purchasing whole crates, and the afternoon crowd is mostly commuters off of the beaten path on their way home from work or whatever. Our home is positioned as it normally would be in a completely residential neighborhood sitting about 70 feet from the road. We are sometimes mistaken for the farm owners and asked a lot of questions about the fertilizers and insecticides used for the large selection of produce. My listening experience is that the consumers for these products will pay more for these goods that are raised within the guidelines of what is considered to be organic product. It is amazing what these consumers of all ages know about the things used to produce and process food of all categories. I also find that they travel not just to save a few dollars, but to be assured freshness and the qualities they seek. This is also true for the grocers, restaurants, hotels and prepared food supply businesses that come in the morning. So while things could be better for most Americans, it appears that the farmers in this area are seeing a little bit of good times after decades of hard times and harder work.

'gjarnoldjr'

If I'm looking for the best price, I go to the international market. The farmers' market is all about the "experience," IMHO. Always a nice way to spend a Saturday morning when the weather is good. Talk to the farmers, build loyalty, learn about new things, enjoy the great outdoors!

Only time we buy produce from the local grocery store; when we need it now!

In my area, farmers markets and international markets have posed somewhat of a threat to grocery for quite a while, but grocery is far more convenient for many. How big a card is the convenience card? Don't know the answer to that, however I encourage grocery to make it their business to know.

and that's my two cents!

Lee Kent, Encourages retailers to meet share and learn, YourRetailAuthority

Farmers' markets are a topic we seem to discuss every summer for obvious reasons. Yes, they are going to grow and hopefully prosper because we like to stop and shop there. We know the produce is the freshest we can get. So why not be among the many shoppers giving their families the best available fruits and vegetables. I am leaving for Maryland tomorrow, and can't wait to stop for some delicious freshly-picked white corn and farm-ripe tomatoes. Can't beat that for a summer dinner.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

I'm impressed with the number of farmers' markets and the realization that consumers are still interested and willing to go out of their way for the experience and satisfaction of shopping in person. Of course the quality, price and freshness of the fruits and vegetables are motivation for many, but clearly whatever the drivers...enough consumers get there to make it worthwhile for the farmers. So I'm encouraged to believe that retailers have an opportunity to drive business to their stores if they just figure out how to maximize that experience and personal satisfaction.

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Joan Treistman, President, The Treistman Group LLC

There is a feeling of authenticity at a farmers market where the producer stands behind the produce. For a certain demographic, it's also a nostalgic experience to be able to participate in an open market. But I think the reason so many farmers' markets are springing up is because of the fair-like atmosphere—kettle corn vendor, fresh baked goods, unusual crafts, and stalls of fresh-scented produce. This type of shopping experience is desirable and entertaining and has many lessons for today's grocery retailers.

I don't think the individual farmers' market is a threat (most are open a few hours once a week or month) but a retailer that can replicate the market could have some impact on grocery. Certainly Sprouts is trying and there are a number of local market formats that are quite effective.

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Larry Negrich, Vice President, Marketing, nGage Labs

Farmers' markets are a great shopping experience all around. Easy to shop, good quality, you know it's fresh, and good value. Talking to the growers who can answer questions about storage and cooking tips makes it fun to prepare healthier meals. Beyond this, it's a sense of community and supporting local farmers. Grocery stores will feel the impact of this growing trend, as the the farmers' markets increase and offer more.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

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