Unleashing the Magic of Direct Marketing

Larry Lev

When it comes to food, U.S. consumers seem to be pulling in opposite directions. Overall they cook less and less (restaurant purchases now represent 47% of all food spending). Even when eating at home, many consumers seem willing to sacrifice both money and quality for convenience. But at the same time there has been an explosion of interest in higher quality food. Restaurants have become more adventurous and the gourmet aisle of even the most mainstream supermarket has expanded. Organic food sales have been growing at 20% a year. Clearly some consumers are choosing to spend more time and money on better food.

Where does direct marketing of agricultural products fit into all of this? Direct sales are exploding (farmers markets have grown from fewer than 100 to more than 2600 over the last 25 years, community supported agriculture farms have grown from zero to over 1000 farms during that same period). Still, many in the general agricultural community believe that "real men don't eat quiche" and real producers don't direct market. Direct marketing, in this view, is a hobby pursued by weekend gardeners. And the role of direct marketing in the overall food system remains tiny. In the 1997 census of Agriculture, direct marketing represented only 0.3% of all farmer receipts and less than only 0.1 % of all consumer expenditures (less than $1 out of every $1000 spent on food). By comparison, French consumers spend 15 times as much on a percentage basis for direct farm purchases.

Yet despite direct marketing's small stature, it can still exert an important and even magical influence on the quality of life in America. Direct marketing provides an alternative to a food distribution system in the U.S. that has been driven by efficiencies in production and distribution. Crops have been bred for standardization, storability, and mass market appeal. Flavor and uniqueness have fallen by the wayside. Food has been divorced from where and how it has been produced. Direct marketing provides numerous attractions and benefits:

• In my community of Corvallis, Oregon, the weekly Saturday Market routinely attracts 2,000 adults, or more than 5% of the population.
• In the age of e-commerce, farmers markets have become a key element in maintaining the viability of local business districts by providing products not available on the Web (and FM shoppers spend nearly as much in surrounding businesses as they do in the market itself).
• Farms that direct market provide jobs and keep urban fringe land in agriculture.
• There is also an important demonstration effect going on – innovative and superior quality goods sold through direct marketing channels are being copied by mainstream distribution channels (salad mixes are an example).

To succeed, direct marketers have to aim high, really high – their products must be works of art, not just food. The shopping experiences they provide must celebrate human interactions rather than just monetary transactions. The overall goal should be to weave direct marketing into the very fabric of society; make direct marketing a valued ritual and habit. Achieving this stature requires competing not only with supermarkets but also with all of the diverse uses that consumers have for their time and attention – soccer matches, television, gardening – the list goes on and on.

Direct marketing based on run-of-the-mill products will not do because the dominant food distribution system can not be beat in terms of cost or convenience for mediocre products. They need to provide superb products and remarkable experiences.

If direct marketed products aren't flat-out better than what comes through the conventional distribution system, they will not succeed. Direct marketers must take advantage of their proximity to consumers to better target the products, to select varieties and breeds for quality characteristics (rather than for uniformity, storage or shipping characteristics), and to harvest/slaughter at the perfect moment.

Direct sales should be based on high quality communication and interaction. For some consumers the "story" they get along with the product is just as important. Individual marketers must recognize that in the long run their own success depends on the overall quality of the market and the direct marketing sector. The neighboring stand or farm may play a critical element in maintaining their own customer base ("a rising tide raises all ships" philosophy). The community aspect of the direct marketing movement cannot be neglected.

Larry Lev
Extension Economist Agricultural and Resource Economics
213 Ballard Extension Hall
Oregon State University
Corvallis, Oregon 97331-3601
Tel: (541) 737-1417
larry.s.lev@orst.edu

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