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ALTERNATIVES
TERNATIVES
MARKETING AND BUSINESS GUIDE
National Sustainable Agriculture Information Service
www.attra.ncat.org
Abstract: This publication suggests that sustainable hog producers consider alternative marketing approaches for their
pork. Sustainable hog producers are creating products that many consumers can’t find in their grocery stores, but want to
buy. Consumers perceive sustainably raised pork to be healthier to eat. They are willing to pay hog producers more for
raising pigs in a manner that is humane, helps sustain family farms, and is more environmentally friendly than conventional
production methods. Direct marketing and niche markets are among the alternative marketing strategies discussed. Legal
considerations, labels, trademarks, processing regulations, and obstacles are addressed. Sources of additional information
are also provided.
By Lance Gegner
NCAT Agriculture Specialist Related ATTRA publications
April 2004
©2004 NCAT • Considerations in Organic Hog
Production
Table of Contents • Sustainable Hog Production Overview
• Profitable Pork: Strategies for Pork
Introduction ................................. 1 Producers (SAN publication)
Commodity vs. Niche • Alternative Meat Marketing
Marketing ................................. 2 • Direct Marketing
• Farmers’ Markets
What Is Direct Marketing? ....... 2
Where Are the Niche
Markets? .................................... 3
Niche Marketing
Introduction
Opportunities ........................... 4 Successful marketing is a necessary part of any
Niche Marketing With profitable enterprise, and alternative marketing
Others ........................................ 6 is often necessary for sustainable hog produc-
Individual Direct Marketing ers to survive. Unfortunately, farmers who prac-
tice sustainable and humane hog production
Opportunities ........................... 9 often neglect marketing. Sustainable hog pro-
Developing a Clientele ducers need to realize that successful market-
Base .......................................... 14 ing efforts will likely be as management-inten-
sive as their production systems and that those
Marketing Channels ................ 14
efforts will be directed toward specialty and
Carcass Cutout and Pricing .... 17 niche markets, not the conventional commod-
Failure ........................................ 21 ity market and distribution network. There is
Summary ................................... 21 an opportunity for producers of value-added
and premium pork products to realize sustain-
References .................................. 22 able profits, but only if they are willing to de-
Further Resources .................... 23 velop the necessary marketing skills.
ATTRA is the national sustainable agriculture information service operated by the National Center
for Appropriate Technology, through a grant from the Rural Business-Cooperative Service, U.S.
Department of Agriculture. These organizations do not recommend or endorse products,
companies, or individuals. NCAT has offices in Fayetteville, Arkansas (P.O. Box 3657, Fayetteville,
AR 72702), Butte, Montana, and Davis, California.
Kelly Klober, author of Storey’s Guide to Raising In the U.S., consumers expect an attitude of defer-
Pigs and himself a farmer and value-added ence and responsiveness to their wants and needs.
marketer, believes that farmers in the future If you are unable or unwilling to develop—or con-
should not expect to support a farming opera- vincingly fake—such an attitude, stay in commod-
ity-priced agriculture. However, if you see service
tion with a 100 to 200 sow herd. Klober says,
to others as a noble calling, don’t let the lack of
“A lot of folks are seeing a time and means to fit specific marketing or production skills deter you.
a few hogs into their farming mix. Hogs will be Aptitudes are rather easily learned. It is our atti-
taken up by producers wanting to work with tudes that are difficult to change and that most
modest numbers and also wanting to market often determine our fate (Nation, 1999).
them all across the swine production spec-
trum…. To succeed on the small farm, a sow
herd will have to be quite small, fewer than 25— What Is Direct Marketing?
and perhaps as few as 3-5. Even from small
numbers, however, you will have to pursue as
many marketing opportunities as possible.” Direct marketing involves selling products di-
(Klober, 2000) rectly to consumers, thus allowing the producer
the chance to receive a better price. This in-
volves making a direct connection with consum-
In an article in the Milwaukee Journal Senti- ers, determining their wants or needs, and pro-
nel, Mike Marr—who raises and markets ducing the products that meet these needs.
beef near Mineral Point, Wisconsin—com-
ments, “Historically, we take what some- Joel Salatin, a Virginia pastured-beef and -poul-
one is willing to give us. Business sense tells try producer, who has written several books on
you that they’re not going to give you any this subject, suggests some factors to help de-
more than they have to.” (Daykin, 2001) termine your sustainable pork pricing.
One of the largest and most widely recognized While the study did not look into actual premi-
niche markets is for organically grown products. ums received by producers, Wheatley says that
Despite the fact that “organic” is a process “in the fall of 2000, one processor/marketing
claim, not a product or health claim, the grow- firm paid $6 per hundred over the mean mar-
ing demand for organic foods is driven prima- ket price for Iowa/Southern Minnesota with a
rily by consumers’ belief in the higher quality minimum price of $40 per hundred. The same
and safety of these foods, and their awareness firm will pay $65 per hundred live weight for
of the positive environmental, animal welfare, organic pork. Another national cooperative was
and social impacts of organic agriculture prac- paying an average of about $50 per hundred
tices. This growth in demand is expected to live weight for organic pork.” He also states,
continue in the foreseeable future. (Anon., 2000) “These premiums don’t seem substantial—given
that market prices per hundred pounds live
Organic pork, like all other organic products, weight ranged between $40 and $50 in 2000.
has to perform commercially alongside conven- However, the premiums existed even when
tional products. Organic pork should not be prices were lower in 1998 and 1999, and pro-
considered a threat to conventional production, vided some stability to these producers’ income.”
but as a complementary alternative for those The publication is available at <http://
who demand choice. Organic pork can be dif- www.misa.umn.edu/programs/altswine/
litreview.html> or by requesting a copy from:
Kelly Klober, author, farmer and value-added • Most big cities have health and/or
marketer, makes the following suggestions for environmentally oriented publica-
anyone interested in direct marketing of value- tions where ads for “humanely
added pork. He notes that producers usually reared,” “additive-free,” or “free-
start marketing to people they know: “Your range” meat are sure to
mechanic, your barber, your insurance agent, draw a response.
*Retail cuts on semi-boneless basis. Fully boneless would show lower retail weights.
Source: NPPC, Purdue University and Texas A & M University, 1994.
(National Pork Board, 2003)
©
2004
2004clipart.com
Local consumers liked our quality and selection. What lessons can be learned from this experience?
We promoted the pork through advertising and Is there a place for direct marketing? I think so. But
word of mouth. We had bus tours stop to check the both the location and the right kind of individual
operation and make purchases. Several local busi- must be found. A large population area is a major
nesses used our pork in their customer dinners. consideration. The marketers must accept the fact
that it will take years to build the business volume
In spite of these promotions and the significant that will return profits. This means that their ef-
success of local sales, the Fresh Air direct pork mar- fort will have to be subsidized in the beginning
keting will end on April 1, 2002. The sales volume (Frantzen, 2002).
never reached a profitable level in three years.
What went wrong? With so much done right, was
there something out of place?
Summar
Summaryy
I led the initiative to try to sell our pork to two tar- The failure of Fresh Air Pork is a lesson: Mar-
geted institutions. We made “professional” ap- keting alternative pork at prices higher than
proaches to the food service managers. We do-
those of commodity priced pork will be a chal-
nated and cooked meals for the advisory councils
that advise the food service. We were well received,
lenge and will require exceptional marketing
and when the required product specifications were talent and perseverance. In addition, selling
detailed we met them. For example, these services pork successfully in a niche market may require
Nation, Allan. 1999. Allan’s observations. The Practical Farmers of Iowa Pork Niche Market
Stockman Grass Farmer. May. p. 13. Working Group
http://www.agmrc.org/pork/pnmwg.html
National Pork Board. 2003. Pork Facts 2002/
2003. 34 p. Supports the development of niche markets for
http://www.porkboard.org/docs/2002- pork. Has on-line newsletters, news releases,
3%20PORK%20FACTS%20BK.pdf contact information, and project descriptions.
Can also contact:
Salatin, Joel. 1992. Relationship marketing: Five
advantages—consumer education and loyalty, Gary Huber, PNMWG Coordinator
product quality, lifestyle, sales balance. The Box 349
Stockman Grass Farmer. September. p. 19, 22- Ames, IA 50010
23. 515-232–5661, ext. 103
[email protected]
Salatin, Joel. 1994. Sales can fail. The Stock-
man Grass Farmer. June. p. 31 USDA’s Farmer Direct Marketing
http://www.ams.usda.gov/directmarketing/
Salatin, Joel. 1995. Developing a clientele. The
Stockman Grass Farmer. November. p. 7-8, 11. Provides on-line National Farmers’ Market Di-
rectory, on-line listing of Direct Marketing Re-
Schafer, Paula J. 2001. Successful direct mar- sources by state, and many links to general di-
keting of livestock. 4 p. rect marketing publications and other USDA
http://www.cce.cornell.edu/washington/ programs related to direct marketing.
aedp/articles/marklivestock.html
Books
Silverman, Aaron. 2003. Selling meat at mar-
ket. Growing for Market. April. p. 1, 4-6. Farm Fresh Direct Marketing Meat & Milk.
2002. By Allan Nation. 251 p.
Slattery, Patrick. 1999. Farm-direct catering &
direct-marketed packaged meat...Making natu- $30 plus shipping and handling. Contains in-
ral meat pay. Acres U.S.A. April. p. 20. formation on preparing business and market-
ing plans, naming products, setting prices, and
finding and keeping customers.
Collaborative Marketing, A Roadmap & Re- Cost: $10.00 each for producers or $15.00
source Guide for Farmers. 2000. By R. King. each for nonproducers
Small Farm Cooperative: Quality and Innova- Direct Marketing Well-raised Hogs Takes
tion Special Finesse: Fair Partnering with Market-
North Central Initiative for Small Farm Profit- ers Would Allow Farmers to Farm
ability The New Farm from Rodale Institute
http://www.farmprofitability.org/research/ http://www.newfarm.org/features/0902/
smallfarm/smallfarm.pdf iowa_letter/index.shtml
Attracting Consumers with Locally Grown A Pig’s Tale: Marketing Stories for New Value
Products Chains from “Niche and Value Added Mar-
North Central Initiative for Small Farm Profit- keting: What’s in it for you?” 2001 Conference
ability Leopold Center for Sustainable
http://www.farmprofitability.org/local.pdf http://www.leopold.iastate.edu/pubs/
speech/files/091801_p.pdf
Publication, a study of consumer attributes and
purchasing patterns in four Midwestern states. Keynote address
Family Farms and Ranches Can Benefit from Pasture Raised Products Messages and
Niche Markets Strategy
Center for Rural Affairs Food Routes and Midwest Collaborators
http://www.cfra.org/newsletter/ http://www.foodroutes.org/doclib/167/
2003_03.htm#Feature Pasture+Raised+FRN+project+Final+report.doc
Direct Marketing Pork – A Report from the Comparing Swine Niche Market Opportuni-
Field ties
Practical Farmers of Iowa Iowa State University Iowa Pork Industry
http://www.pfi.iastate.edu/Local_Food_Syst/ Center
Fresh_Air_Pork_Frantzen.htm http://www.extension.iastate.edu/ipic/infor-
mation/IowaPorkNiche.pdf
Article
2001 on-line publication
Pennsylvania Farmers Consider New System
for Happy Hogs Market, To Market, To Sell a Fat Hen: How
The New Farm from Rodale Institute to Grow Your Business from Idea to Success-
http://www.newfarm.org/depts/pig_page/ ful Company
pig_alliance/index.shtml Iowa State University Geography of Rural Fi-
nancial Intermediation
Article http://www.wallacefdn.org/
chickenandtheegg1.pdf
On-line publication