by Chris Lewis and Gail Feenstra, SAREP
Early on a Friday morning several years ago, Trini Campbell and Tim Mueller showed up at their first farmers’ market in St. Helena, Calif. They brought with them produce from their nearby acre-and-a-half market garden and left that afternoon with $30 in gross sales. Within a few years their market garden business has expanded to become Riverdog Farm, with more than40 acres in cultivation, a restaurant and wholesale accounts, a community supported agriculture project (CSA or subscription farm) with over 100subscribers and, of course, participation in several farmers’ markets.
This is only one example of the many business success stories brought to life through farmers’ markets. Across the country, many of the over 2500 farmers’ markets appear to act as informal "business incubators" for farm, food processing and craft businesses. In 1998, Gail Feenstra, SAREP nutrition and food systems coordinator, and Chris Lewis, postgraduate researcher, were funded along with researchers from Cornell University in New York and Iowa State University to conduct a three-year study of the ways in which farmers’ markets stimulate businesses and contribute to community economic development. While each group is conducting the research in its home state, and will provide analysis independently for their own states, a final report will be made based on the findings from all three states. We hope to document the features of farmers’ markets and the initiatives taken by managers and vendors that support small business growth. Since most previous studies of farmers’ markets have focused on consumer opinions, rather than management and vendor issues, the results of this study will provide valuable new information to those interested in starting or strengthening farmers’ markets as well as to those involved with small business and community development.
The California Study
To identify important factors that contribute to "business incubation" at farmers’ markets, all states are collaborating to conduct uniform surveys of farmers’ market managers and their vendors. In addition, each state will develop six case studies of vendors or markets to provide more in-depth information. For the purpose of this update, we will focus on the progress of our group here in California.
Working with the two largest farmers’ market organizations in California, the Southland Farmers’ Market Association and the California Federation of Certified Farmers’ Markets, we compiled a list of approximately 335 certified markets in California. This list was stratified using 1990 census data into three categories based on the population of the market host communities: rural(populations under 10,000), urban (populations between 10,000 and 50,000)and metropolitan (populations over 50,000). Figure 1 shows how farmers’ markets in California are distributed based on these criteria.
Phase 1: Farmers’ market manager survey. From the three categories in our list, we have proportionally sampled 60 markets at random and begun conducting telephone interviews. In addition to the basic operating characteristics, we are asking managers about their market’s rapport with other businesses in the community, what kinds of things they do to promote their markets and vendors’ products and what they view as the main supports and obstacles to entrepreneurial development. This phase of the project is nearly complete.
Phase 2: Vendor survey. In this phase of the project, we will choose 20 markets from the original 60and send a mail survey to 20 vendors from each of those markets. Some of the elements we hope to explore here are: What markets make good starter markets? How important are markets to a business once it’s off the ground? What are some of the non-financial benefits (such as information sharing, networking, etc.) gained from participating in farmers’ markets? How many jobs are generated from farmers’ markets? How have farmers’ markets contributed to developing value-added products?
Phase 3: Case studies. The last phase of our project will consist of six detailed case studies highlighting the most interesting and creative markets and vendors as well as some of the more problematic ones. The detailed attention provided by case studies will let us more fully explore the findings from the earlier sections.
Preliminary results from the market manager survey
Although all the data has not been analyzed from the market manager survey, we are seeing some interesting trends. Preliminary results reported here are only a small sampling of the rich information we have gathered. The results we have seen so far suggest that about one third of all farmers’ markets have experienced a "slow down" due to rainy days and vendor losses associated with the El Niņo weather conditions. Only markets from the urban category report any significant growth in the last three years in terms of the number of vendors who participate. Despite this slow down, about one half of all managers state that their markets are full with respect to the number of vendors they can accommodate.
Gross sales figures on a per market basis are clearly positively correlated with the population of the host community, but on a per capita basis, rural communities far out-spend larger populations at their farmers’ markets. While they also only represent 18percent of the farmers’ markets in California, rural markets may act as an important first step for many agricultural-based businesses. These markets often place a stronger preference on local produce and are situated in close proximity to many other ag-related resources. The information we gain from vendors in Phase 2 will explore the role of rural markets in more detail.
All of the managers surveyed gave examples of vendor businesses that have grown beyond their farmers’ markets in the last three years. Examples of such growth include selling at additional farmers’ markets, developing a CSA or expanding to include retail and/or wholesale accounts. Most managers also feel their markets have had an effect on other local businesses in their communities. Restaurants seem to benefit most from the increased customer traffic on market days, but a number of examples show that even large grocery stores gain customers. In one community, the local chain grocery store was so impressed, they now sponsor an annual benefit for the farmers’ market and contribute the proceeds back to the market’s operating fund.
Other strategies for integrating a farmers’ market into the larger business community include free ad space for local merchants and non-profits at the market; raffles and contests involving both farmers’ market products as well as merchandise and services from local business; and direct sales to local florists, restaurants and grocers of market vendor products.
Parking remains one of the most ubiquitous concerns around farmers’ markets. One strategy some managers have suggested to deal with parking problems is a drive-up table for phone orders and handicap access. Scheduling markets during non-peak hours on non-peak days helps to mediate parking problems, as well as provide an incentive for some businesses to stay open longer hours.
While this project is only about one-third complete, it looks quite promising. The study is already providing new and useful information about the basic operation of farmers’ markets and their potential for supporting small businesses. The research also presents a clearer picture of the larger issues facing managers, vendors and market communities. Throughout the project, our results and analysis will be shared widely through publications and meetings, with the hope that they will strengthen farmers’ markets in communities throughout California and nationwide.
For more information, contact Gail Feenstra at (530) 752-8408, gwfeenstra@ucdavis.edu or Chris Lewis at (530) 752-7541, cjlewis@ucdavis.edu
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