| Title |
Investigators | Department | Objectives | Approach Keywords | Progress Reports | Impact Statements | Publications | |
Project * COL00296 | |
| Title | Fruit and Vegetable Marketing Innovations and Demand Assessment |
| Investigator(s) | Thilmany, DD; |
| Department | Agricultural and Resource Economics |
| Objectives | 1) To assess the evolution of Supply-Chain Management in the fruit and vegetable sector, identifying strategic organizational and marketing implications for diverse firms and specific commodity sub-sectors. 2) To analyze the relative costs and competitiveness of fruit and vegetable sub-sectors, either regionally, nationally, and/or globally, using new and established analytical paradigms which incorporate theories from business schools and other fields. 3) Develop demand models for the produce sector that can be used to evaluate trade, commodity marketing programs, labeling programs, traceability systems, and structural changes in the U.S. produce markets. |
| Approach | Past work on tomato market integration, trade and policies that use weekly terminal market data with multivariate regressions, time series methods and parity bounds models will continue and be applied to other major Colorado commodities, including potatoes and tree fruit crops. Implications of market power, seasonal variations and demand and targeted marketing strategies by producers will be explored. The PI will also continue her past research on niche markets to explore growth in direct marketing channels for fruits and vegetables through consumer surveys, using factor and cluster analysis as well as probit and multivariate analysis of willingness to pay and pricing points. Work may be extended to explore the nutraceutical properties of different cultivars, and the implications that consumer interest in nutritionally-enhanced has on marketing strategies. |
| Keywords | market integration, direct markets, targeted consumer segments, consumer demand for food attributes |
| Progress Reports | |
| 2005 | Many of the marketing and consumer analysis methods used for other products are being applied to fruit and vegetable crops, with new projects in the wine industry, specialty crops and with alternative marketing channels. Funding was secured to do a marketing analysis for the Colorado wine industry that will continue through 2006, and may grow into a USDA Value-Added Grant project. A Small Farms NRI grant was secured with faculty in Horticulture and Food Science and Human Nutrition to assess market potential for nutritionally superior cultivars of various fruits and vegetables, as well as those grown with alternative production processes (organic). Both projects also integrate some focus on the marketing channels used by producers to sell their products. More applied projects will focus on specific products and producer groups, including specialty potato consumer analysis and market planning, a marketing study for onion nuggets with a USDA Value Added feasibility grant and a continued effort with the Colorado wine constituents. One project and paper estimated the willingness of consumers in New England to pay a premium for local specialty food products as opposed to a perfect substitute imported from out of state. A small premium of 9-20 percent of the base price was identified for the local trait in each of three states (ME, VT, and NH), which could be used by the local labeling programs to recoup program expenses. Although the premia did not differ statistically between the study regions, there is anecdotal evidence suggesting that differing marketing programs affect the magnitude and distribution of the additional willingness to pay. In the future, we hope to conduct similar analyses will be conducted in Colorado and the Intermountain West. |
| 2006 | The Small Farms NRI with faculty in Horticulture and Food Science and Human Nutrition completed its focus groups and national survey, and in addition to numerous presentations of initial results, an article was already accepted for late 2006 publication, and proceedings from another conference will be published in early 2007. Several fact sheets and publications are in development and another grant proposal is being planned. There are several consumer segments that show great potential with respect to their willingness to pay for organic, locally sourced or nutritionally superior produce. Complementary work on natural meat markets are important to show whether consumer behavior is consistent across food products. The Colorado wine study was finished in the summer of 2006 and results were presented to funding groups in December 2006. The report found that the economic contribution related to the small but growing Colorado wine industry totaled $41.7 million, of which $11.2 million came from direct sales of wine products by Colorado producers, and another $11.8 million in indirect effects was related to the purchases of inputs and labor by Wine producers. Nearly half of the total impact came from tourist revenues from wine festivals through the state, which amounted to $20.8 million. It appears that there is a small, albeit, growing number of Colorado consumers who have interest in Colorado wines, and if the industry continues to develop, there is potential to double sales between 2005 and 2010. Plans for future work with wineries in their business planning is under discussion |
| Impact | |
| 2005 | Research for the wine industry will be used to assess the feasibility of cooperative crush facilities on the Western slope, guide business planning by wineries and help with strategic market planning for the whole industry. This type of analysis should allow them to continue with the 100% growth in market share the industry has experienced in past years. The research and information provided by the research on state labeling programs can increase the perceived market convenience of purchasing locally made specialty foods and lower the transaction costs of searching for such products. Similar analyses in this state could help the promotional monies allocated to Colorado Proud to be more effectively used. Targeted marketing analyses represent a high profile impact to producers and industry associations (wine) throughout the state. This form of business technical assistance to agribusiness partners has led to our being invited to be part of the Market Maker project initiated in the Midwest, and led to discussions with Larimer County's Economic Gardening project being developed in conjunction with CSUs Office of Economic Development. |
| 2006 | Research for the wine industry will be used to guide business planning by wineries and help with strategic market planning for the whole industry. However, there continue to be significant distribution issues that may motivate the need for future research as the industry grows out of the size of a niche market. This type of analysis should allow them to better manage the 100% growth in market share the industry has experienced in past years. My work with various businesses to assess the market opportunities, and to a lesser degree, explore the financial feasibility of differentiated meats, produce and wine continues to gain us positive feedback from our constituents. In addition to guiding specific businesses, this research is becoming more cited at the National level for its implications for the national marketplace. My current position with USDA working on Organics, and what I have learned in the position, would lead me to believe we are one of 3-5 lead institutions exploring alternative markets in the US. |
| Publications | |
| 2005 |
Giraud, K.L., Bond, C.A. and Bond, J.J. 2005. Consumer Preferences for Locally Made Specialty Food Products across Northern New England. Agricultural and Resource Economics Review, 34(2), 1-14. Thilmany, D. 2005. Market and Cooperative Crush Feasibility Analysis for Colorado Wines. Project Report and Update to the Western Colorado Business Development Corporation, Colorado Wine Industry Development Board and Debra Ray. December. Unpublished. Thilmany, D. 2005. Planning and Developing a Farmers Market: Marketing, Organizational and Regulatory Issues to Consider. Agribusiness Management Report 05-01. February. 8 pp. |
| 2006 |
Keeling-Bond, J, D. Thilmany and C. Bond. 2006. Direct Marketing of Fresh Produce: Understanding Consumer Purchasing Decisions. CHOICES. 21(4) Fall 2006. 1-6. Online at http://www.choicesmagazine.org/2006-4/ Pritchett, J., D. Thilmany and K. Johnson. 2006. Consumer Responses to Recent BSE Events. Forthcoming, Journal of Food Distribution Research. Thilmany, D. 2006. Integrating Organics into CSREES and Broader USDA Programs: Organizational and Leadership Alternatives. White paper for the USDA-CSREES. Spring 2006. Unpub Thilmany, D., J. Wilson and P. Ritten. 2006. Market and Cooperative Crush Feasibility Analysis for Colorado Wines. Coorado Department of Agriculture Value-Added Feasability Report to Western Colorado Business Development Corporation and Debra Ray. June 2006. Unpub Thilmany, D., W. Umberger and A. Ziehl. 2006. Strategic market planning for value-added natural beef products: a cluster analysis of Colorado consumers. Renewable Agriculture and Food Systems, 21(September 2006): 192-203. |