Marketing Strategies for Pasture-Based Animal Products David S. Conner, Ph.D. Research Specialist C.S. Mott Group for Sustainable Food Systems Michigan.

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Marketing Strategies for Pasture-Based Animal Products

Presentation transcript:

Marketing Strategies for Pasture-Based Animal Products David S. Conner, Ph.D. Research Specialist C.S. Mott Group for Sustainable Food Systems Michigan State University

Overview  Introduction: Commodity versus Niche Markets  “Food with a Story”  MI farmers’ stories  What Do Consumers Want? Results from other states Results from Michigan  Implications  Conclusions

Introduction Two basic markets: Commodity versus Niche CommodityNiche Pricing“Price-taker”“Price-maker” Competitive Strategy Low Cost Producer Product Differentiation Market Comparison

Introduction Bottom Line: If you want the higher price, you’ve got to offer something special or different! And… you’ve got to be able to tell your consumers why your product is special

“Food with a Story” SYSCO CEO Rick Schneiders says his company’s marketing strategy is based on: Memory Romance Trust “Romance is the story behind the food’s production.” Again…it’s not just producing good food – it’s about telling its story!

Michigan Farmers’ Stories What stories are Michigan pasture-based farmers telling about themselves, their farms and their products? How do they describe themselves to consumers? Interviews with 24 farmers from 16 farms throughout Michigan (south, west, north, UP) Conducted fall 2004 and spring 2005 Broad array of products and species

Michigan Farmers’ Stories Common Themes: Animal Welfare (11/16): humane treatment, decreasing stress Ecological Stewardship (9/16) Natural Products (11/16): no hormones, antibiotics, additives; “we eat it too” Family Farm Ethic (13/16): quality of life, affordable price, good relations with neighbors

Michigan Farmers’ Stories 3/4 of these themes concern HOW the product was raised (the process) as opposed to WHO raised it But… Are these the right selling points? What do consumers want? What will they pay for?

What do Consumers Want? Results from other states… Consumers have expressed willingness to pay a premium for pork products with the following attributes: “Pasture-raised” (AR) “Environmentally Sustainable” (IA) “Natural” (CO)

What do Consumers Want? Results from other states… Internet survey by Kerr Center (OK) Respondents from 4 states: NE, MO, WI, IA Almost half say they would pay 10% more for locally grown meat and chicken Large numbers also willing to pay more for pastured poultry Caveat: what they say they’ll pay may not equal what they’ll really pay!

What do Consumers Want? Results from Michigan Data Source: The State of the State Survey, administered by Michigan State University’s Institute for Public Policy and Social Research Representative sample of Michigan residents (N=988) Objective: Identify consumer demand for and attitudes about animal product attributes

What do Consumers Want? Survey Results from Michigan Questions included: Importance of the following attributes: Humane Animal Treatment Antibiotic and Hormone Free Raised in Environmentally Friendly Way Raised in Michigan Raised on Family Farm Knowing Farmer

Survey Results from Michigan Other questions:  Frequency of Purchase of Pasture Raised (PR) products  Reasons for never buying or not buying more PR  Belief that PR products are healthier for consumer  Demographics: age, income, race, gender, marital, politics, education, urban

Survey Results from Michigan What attributes are important to purchase decisions: measured on five point scale. 1=very important 2=somewhat 3=neither 4=not very important 5=not important

Survey Results from Michigan AttributeVery Important (%) Somewhat Important (%) Humanely Raised No antibiotics or hormones: Environmentally Friendly MI raised Family Farm Knowing Farmer

Other Findings… Frequency of Purchase PR products Always or most times: 38.7% Some of time: 35.1% Rarely + Never: 26.2% Also, 86 cases of “do not know” People think they are buying PR products…but are they?

Other Findings… Agree that PR products are healthier for consumers than confinement-based Strongly Agree: 41.0% Somewhat Agree: 40.4%

Survey Results from Michigan Summary of Findings: How products are raised is more important then Who raises them People think they are buying PR products Healthy perceptions

Implications: what does it all mean? MI consumers care more about “how” than “who” Humane Healthy or Natural Environment Pasture-Raised Products have these attributes MI Pasture-based Farmers include these attributes in their stories Lots of potential for education and communication Caveat: This is a mass, random sample; knowing your particular consumers and their preferences is vital

Conclusions “Niche” implies product differentiation: need to produce high quality goods and tell the story How products were raised may be an important part of your story Caveat: make sure you make truthful claims: focus on how it was produced (process) rather than outcomes (product). Health claims may get you in trouble. Get in touch with me if you have any questions, comments, etc. I want to learn more and help if I can!

Thank You! David S. Conner, Ph.D. C.S. Mott Group for Sustainable Food Systems 303 Natural Resources Building Michigan State University East Lansing, MI (517)