Adapting to the Changing Landscapes for Food Markets Western Colorado Food and Farm Forum Dawn Thilmany,
[email protected] Colorado State University Food Systems Extension Team
Feeding the World Combined sales of Colorado’s agricultural commodities and manufactured foods and beverages are estimated at $13.3 billion. Of that, an estimated – $2.2 billion (17%) is exported from the US, – $6.3 billion (47%) is sold out of state, – $4.8 billion (36%) is sold within CO.
$2.4 billion
$0.9 billion
Mapping the Value Chain of Colorado Agriculture $10.7 billion
$3.0 billion $4.0 billion
$4.8 billion
$27.5 billion Source: Graff et al, The Value Chain of Colorado Agriculture, CSU, 2013
1. Snacks, the Modern Meal? 2. Social Media Disrupt Food Culture 3. Online Grocery, Still Coming 4. It’s Not About the Coffee 5. Food Competition Everywhere 6. Beating Fast Food at Its Own Game 7. Sustainability and the Good Company OR FARM/RANCH
The Hartman Group, 2013
• Consumer Motivations and Choices – Values, Time and Food Dollars
• Changing Market Drivers – Supply-New and Transitioning Farmers/Ranchers – Demand-Shifting Food Dollars – Markets-Food Dollar “Portfolios”
• Community Driven Food Systems – Increasing Influence of Consumers, NonProfits and Public Institutions April 2013
• But when are we eating? • Where are we eating? Shopping? • Who is making our food choices?
Food Away from Home
The Trends Illustrate the Need
Consumer Behavior • Consumers are more savvy in using their money to make a public statement of activism and pursue “sustainable” consumption – Vermeir and Verbeke (2006), among others
• Farmers Markets role in enhancing “perceived consumer effectiveness” (PCE) – Extent to which the consumer believes that their personal efforts can contribute to the solution of a problem
$1.2 or 4.8 billion?
FOOD AS A WICKED PROBLEM WE WANT OUR FOOD TO BE: Inexpensive
Delicious
Safe Fresh
Convenient (Accessible, Easy to prepare)
Long lasting
Nutritious
Sustainably grown Supportive of local agriculture Supportive of local economy
Support for ag and local economy seems most important. Food miles does not seem to be driving locavores
Theory of Planned Behavior (TPB) • Fishbein and Ajzen 1975; Conner and Armitage 2002 Attitudes Perceived Social Norm
Perceived Behavioral Control Perceived Availability Perceived Consumer Effectiveness
Purchase Behavior
What Does Consumer Psychology Say? Attitude
Dimension
Mean
Health
5.43
.12**
Perceived Social Norms
.13**
Current Purchase Behavior (WTP)
.09*
Perceived Consumer Effectivenes s Perceived Behavior Control
.06
Availability
Impact local 5.08 economy Positive effect on 4.74 society
Positive impact on environment Statement for social fairness
4.33 4.09
Sample Choice Set Apple 1
$2.69/lb Product of Chile
Apple 2
$3.49/lb Locally Grown
Carbon
Fair
Carbon
60g/lb
Trade
120g/lb
I will buy this apple.
I will buy this apple.
Neither.
Median WTP Comparisons (Tomatoes)
Consumer Perceptions of Labels Outcome
Label
Air Pollution Animal Welfare Community Involvement
Product Perception
Employee Welfare Energy Consumption Locally produced Sustainable Agriculture Waste Management Water Management Taste Food Safety Nutrition
Perceptual Profiles Air Pollution Multidimensional labels :Organic 3.5
Nutrition
Organic CI_lower
3
Animal Wefare
2.5
CI_upper
2
Safety
Community
1.5 1 0.5
Taste
Employees
0
Water
Energy
Waste
Local
Sustainable Ag
Perceptual Profiles Multidimensional labels :Colorado Proud Air Pollution 4
Nutrition
3.5
Animal Wefare
3
2.5
Safety
Community
2 1.5 1 0.5
Taste
Employees
0
Water
Energy
Waste
Local Sustainable Ag
Tensions among Sustainable Segments? • Organic vs. Local • Small Organic vs. Corporate Organic? • Animal Welfare vs. Organic Certification in Animal Products?
Comparison of most trustworthy sources of information about food quality, nutrition and safety and source on agriculture (2011 Colorado Public Attitudes Survey) Information source most likely to be trusted University and research organizations Colorado Department of Agriculture Farmers and ranchers themselves US Department of Agriculture Farm and ranch organizations Other federal government agencies Environmental organizations Food industry News reports in the media Social media
Other
% respondents for information on food quality, nutrition and safety
% respondents for information on agriculture
35% 32% 30% 24% 21% 15% 10% 6% 6% 2% 2%
45% 38% 37% 25% 29% 20% 15% 5% 4% 3% 3%
A Community Approach • Translating what we know to the changing landscape of the Western Colorado region……
CSU Food Systems Mission Areas • Facilitators of Community Discussions around Food • Building Community through Building Farmers • Food Safety and Diverse Market Channels • Food Systems in Community and Economic Development Initiatives
Core Objective: Recruit, create, and retain food and ag businesses Key issues for creating and retaining food and ag businesses: Availability of land and water Transportation infrastructure Quality of life / Quality of workforce A business culture where “small is beautiful” (esp. for creating) Leveraging natural concentrations of regional specialization: Northern Colorado / South Platte River commodity crop and livestock San Luis Valley potato and grains cluster Western Slope / Tri-Valley fruit and vegetables Northern Front Range natural, organic, and local foods
A Scan of Colorado-CSU Linkages • Value-Based Market Development – Farm to School and Farm to Seniors – Value Chains and Food Hubs
• Technical Assistance and Partnerships – Colorado Farm to Market and Cottage Foods Project – Colorado MarketMaker
• Food Assessments to Inform Policy/Econ Dev. – Northern Colorado, Pueblo, La Plata, Chaffee, Denver, Routt Counties
A Typology of Farms Direct Marketing
Value Food Chains
• Very Small • High Value added
• Higher Volume • High Value
Trouble Zone
Commodity
• Lower Volume • Low Value Added
• High Volume • Low Value Added
Modified from Stephenson, Ag of the Middle
Colorado Homestead Ranches • 5 ranches started selling freezer beef in 1997 • Product attributes: local, naturally grazed beef, no feedlot antibiotics or hormones • Now part of region’s Value Chain
•Engage more farmers and ranchers in selling to restaurants *Promote Montrose area as a great local food scene providing fresh Healthy options grounded in our strong agricultural heritage *Engage more restaurants in Serving locally Produced foods •Market participating restaurants as “Eat Local, Eat Healthy” options •Promote and market this effort via the OBT visitors center, • Leverage restaurant program with other agri-‐tourism activities
FARM TO SCHOOL IN COLORADO
District 6 Local Purchases
District 6 Local Purchases Anticipated Purchases 2012-2013 SY
Dairy Products 86% $600,000.00
22% of all food purchases from local sources!
The Burrito Story… Before: 35+ ingredients 532 MG of Sodium
After: 12 ingredients 406mg NA
FTS Efforts 2010 or Earlier
FTS Efforts 2011
FTS Efforts as of 2012
Fruit and Vegetable Sales, 2007
Below Average
Direct Sales, 2007
County Average: $10.289M
Average to 1 St. Dev above
County Average: $0.373M
Standard Deviation $82.043M
1-2 St. Dev above average
Standard Deviation: $0.965M
>2 St Dev above average
Ca rd m iova or s ta cu lit la y rd ra is te ea se
of ad ul ts be s it
y, % Direct Sales* Number of CSAs* Number of Farmers' Markets Fruit and vegetable sales over total farm sales*
O
Pearson correlation coefficient US County Totals
-0.21 -0.19 -0.27 -0.18
-0.15 -0.16 -0.14 -0.09
Sources: * data from Census of Agriculture (2007) Number of farmers' markets from USDA-ERS Food Environment Atlas (2010) Obesity rate from CDC (2006-2008) Cardiovascular mortality calculated using CDC Mortality Tape (98-00 and 03-05) Note: Correlations for 2990 US counties for which data were available
Building Farmers in the West and Colorado Building Farmers Dawn Thilmany, Martha Sullins, Adrian Card Colorado State University Extension Washington, Utah, Idaho, Oregon, New Mexico, Wyoming, Arizona, Montana
Funded by USDA Beginning Farmers and Ranchers Development Program (grant award number 2009-49400-05877 and 2012-00712).
90% would recommend the program to others 87% increased their farming 79% have a network of farmers with whom to work
Our farmer/rancher participants said:
• • • •
After the program, participants with a:
Financial plan Marketing plan Business plan Production plan
Our participants will produce new products and Dairy products, 11% Eggs, 31% Other, 26%
Meat/animal products, 27% Herbs, 45% Fruit, 48%
use new markets
Wholesale, 13% Individuals, 14% Farmers’ Market, 35% Farm/Road Stand, 16%
Other, 17%
Value-added products, 29% Flowers, 34%
Vegetables, 69%
grew by
89% 85% 78% 70%
CSA, 26%
Restaurant, 34%
CBF Linkages to the Food System
• Fort Lewis College Farm Incubator
– May be an Anchor region for Colorado Land Link
• Extended Leasing of Boulder Open Space to Small Specialty producers – Larimer County/Fort Collins exploring similar options
• Colorado Veterans to Farmers • Northern Colorado Winters Markets – FMPP
From Farm to Plate • Colorado MarketMaker Builds an information network to help farmers access domestic and international markets Helps consumers find Colorado products
www.comarketmaker.com
• CMM is a free online tool designed to connect buyers & sellers of Colorado food products through an information network • Started in 2008; tremendous, and growing, producer/seller participation! Type of business Agritourism Buyer Eating & Drinking Farmer/Rancher Farmers Markets Fishery Food Bank Food Retailer Processor Wholesaler Wineries
www.comarketmaker.com Total
Feb 2010
3,920 1,385 909 99
August 2013 193 26 15,498 582 123 10 5 7,526 2,088 1,351 85
18,900
27,487
11,961 506 120
Colorado Farm to Market http://cofarmtomarket.com 47
– This site was developed to familiarize Colorado food producers and food product manufacturers with federal, state and local food licensing regulations and to help ensure that the path food travels from farm to fork is safe.
Market Development and Applied Research Colorado Dept of Ag Specialty Crops CSU Program for Smaller Projects Rural Development: Value Added Producer Grants Ag Marketing Service: Farmers Market Promotion Program Federal State Marketing Improvement NIFA Economic Viability of Small & Mid-sized Farms SARE and WCRME regional grants Community Food Projects Beginning Farmer and Rancher Development
Upcoming Opportunity!
Dawn Thilmany 970-491-7220
[email protected]
Appendix
Acknowledgments and Contacts • CSU Food Systems Work Team and Dept of Ag and Resource Econ faculty • Colorado Dept of Ag, Livewell, and community partners • USDA funding for research and programming • More info? •
[email protected]
Valuing Food Labels LEVELS ATTRIBUTES Product Origin
Certified Organic Certified Fair Trade Carbon Footprint
Unit Price
Gala Apples Locally Grown Grown in Washington Product of Chile Uncertified USDA Organic Uncertified Certified Fair Trade 60g/lb 120g/lb 180g/lb $1.49, $1.89, $2.29, $2.69, $3.09, $3.49
Red Round Tomatoes Locally Grown Grown in CA/FL Product of Canada Product of Mexico Uncertified USDA Organic Uncertified Certified Fair Trade 100g/lb 800g/lb 1500g/lb $1.49, $1.89, $2.29, $2.69, $3.09, $3.49
Significant TPB Coefficients (Tomatoes) Direct
SuperDirect
SuperHealth
Others
Organic x PCE
.63
.21
.55
.23
Fair Trade x PCE
.38
.38
-.13
.29
Carbon x PCE
-.10
.03
.03
-.04
Local x Availability
-.01
-.05
.25
.32
p