Effectiveness and Impact of State-Grown Promotion Programs

Dr. Wen-fei Uva

Senior Extension Associate

Department of Agricultural, Resource, and Managerial Economics

Cornell UniversitySeptember 1999

Modified by Georgia Agriculture Education Curriculum Office

June, 2002

Current Situation:

• Food travels an average of 1,300 miles before reaching the consumer’s table in the U.S.

• More than 20 state-grown promotion programs in place

• Administration typically rests with the state’s Department of Agriculture

• Funds from state sources often combined with funds from licensing fees and private sector contributions.

State-Grown Promotion Programs

Common Objectives:

• Promoting broad groups of food and agricultural products produced within the state.

• Support the local economy

• Agricultural market expansion and development

Marketing Concept

Differentiate Locally-Grown Products

-- Building a “BRAND” Loyalty

To increase sales at any price

-- Reduce consumers’ sensitivity to price change

Some Research Results Related to Product Origin Promotion Programs:

References:

• Brooker et al. 1988, Pick Tennessee Product

• Cambell and Feenstra 1998, The Case of PlacerGROWN (CA)

• Jones et al. 1990, Ohio Fruit Producer Survey

• Lockeretz 1986, Urban Consumers’ Attitude towards Locally Grown Produce

• Michigan Dept. of Agriculture, 1989, Yes! Michigan

• Patterson et al. 1999, A Case Study of Arizona Grown

• Ramu et al. 1998, The Case of Jersey Fresh

• Stern and Douglas 1999, Western Massachusetts CISA Study

• Skinner et al. 1999, What does the ‘Made in Vermont’ Label Mean to Consumers?

Attributes of Locally-Grown Products Valued by Consumers

Top of mind beliefs:• Quality• Freshness• Taste• Healthfulness• Positive experience

Other positive messages• Sustainable community development• Contribution to local economies• Community connection• Environment quality

• Produce display and TV were the most effective for building awareness

• Think local produce in the summertime

• Prefer to buy local products if given the choice

• Expect good quality from locally-grown products

• Branding of locally-grown products could not substitute for quality

• Consumers who were biased towards the locally grown products were most influenced by the logo.

• Messages at a direct marketing environment are more effective

Consumer Responses

Whether or not consumers express preference for locally produced foods, their buying behavior will depend upon

availability of local products at competitive prices and acceptable quality.

• Liked attractive price tags and produce display with the logo

• Disliked the additional brochures given in the store

• Higher educated people were less affected by the logo

• Processed and convenient food buyers were less likely to look for products with the locally-grown logo

• Majority (3/4) will NOT change stores to buy local

• Most (90%) will prefer the grocery store to have a greater selection of local produce.

• Repetition of the messages in different forms

Supermarket Customers

• Consumers are facing information-overload by in-store promotion when shopping at grocery stores

• in-store promotion alone is not effective

• Consumer loyalty cannot be built through logo alone; communicating information of additional benefits is needed.

Producers/Farmers Response

• More likely to participate if they are informed of the consumers’ awareness of the program

• 1/2 will participate in the program if it is free.

• Most commonly use the logo on price cards, posters and banners, and produce displays.

• The general state-grown promotion program is more popular than quality-control program.

• Larger farms and older producers are less likely to participate in the state-grown promotion program

Retailer and Wholesaler Aspects

• Responded the state/locally grown logo added “value & freshness” to their produce

• Liked the materials the most and media promotion

• Retailers are more likely to participate in the program than wholesalers

• Primary wholesalers (>75%) are less likely to participate in the program

• Producer-wholesalers are more likely to participate than non-producer-wholesalers.

• Promotion always has positive effect on sales

• Premium local products can demand a premium price when treated as a different product from non-local products.

• Ensuring quality is more important than price

• Program visibility and continuity is important

Program Evaluation Results

•“Jersey Fresh”:

> Each $1 spent on the program resulted in a return of $46.90 to NJ Agriculture

> For every $1 spent on the program the local farmers earned an additional $15.20 in net farm income

Program Evaluation - continued

Campaign Components

• Designated Management

• A Promotional CampaignLogo, Slogan, POP materials, Posters, Signs, Stickers, Educational Materials

• InformationFarm Map/Directory, Harvest Calendar, Regional Food/Nutrition Guides, Features of Participants

• Promotional VehiclesNewspaper, Radio, Cable TV, Billboards, Public Media, POP materials, Local Partnership

• Education Program for Participants

Effective Promotion Messages

• A single promotion campaign

• Messages of quality and freshness

• Clear labels

• Increase convenience and availability to buy

• Contributions to the local economy and community

• Use local farmers to communicate; health and education professionals as support

• Messages for non-local groups - tourists, out-of-state

Keys to the Success of a State-Grown Promotion Program

• A vision

• Seed funding

• A champion to carry through

• A program supported by different sectors of the community, not just the ag. sector

• A sense of immediate threat sufficient to motivate action among community groups

• Political leadership and technical support

Challenges

• Maintain interests among producers, businesses and consumers

• Continuity -- The 5-year rule of thumb

• Identify funding sources for long-term sustainability

Evaluation Questions

• Whether consumers are aware of the promotion

• Whether the origin of food products matters to the consumers

• Whether the promotion influences their preferences & buying behavior

• The effects of promotion on product sales & farm incomes