Cooperative Marketing | Buy-Local Campaigns
|The Mountain Tailgate Market Association unites a number of small farmers markets representing 150 small farms in western North Carolina, funding a multi-media promotional campaign, among other ventures. – Photo by Charlie Jackson|
Some direct marketers go it alone, but many Find that teaming up with others shares skills and abilities, moderates the workload and minimizes hassles.
After Terry and LaRhea Pepper’s single buyer reneged on a contract to buy their entire crop of organic cotton near O’Donnell, Texas, they found themselves with bales of raw cotton and no buyer. Scrambling for an alternative, the Peppers decided to try converting the raw product into denim. LaRhea Pepper, who had majored in fashion merchandising in college, contacted companies interested in finished fabrics and secured a new buyer.
“We realized, then and there, that security and profitability depended on our assuming responsibility for processing and marketing our cotton,” La Rhea Pepper says. “We don’t rely on anyone else.”
The Peppers joined forces with other organic and transitional cotton growers to form the Texas Organic Cotton Marketing Cooperative. Through the co-op, they shared marketing expenses and risks, then dealt with buyers as a team.
“We were realistic,” LaRhea Pepper says. “We realized we couldn’t deliver a consistent supply as the only producer.”
When the cooperative was formed in 1991, it brought together 40 farm families who sought to market their organic and transitional cotton. The cotton co-op sells raw, baled cotton or an array of processed products such as personal hygiene aids and a diversity of fabrics through their Website.
As more members of the co-op were drawn into marketing decisions, they also saw the need to create new products, expand markets and promote themselves. They diversified the product line to include chambray, flannel, twill and knits. Lower grade, shorter staple cotton, not suited to clothing, is used to make blankets and throws. Most recently, an “Organic Essentials” division was created to manufacture facial pads, cotton balls and tampons. The co-op board continues to look for other opportunities to add value to their cotton, and for partners in the industry who are willing to share the cost and risk.
The benefits of marketing agricultural products with others also appealed to Janie Burns of Nampa, Idaho, who raises sheep, chickens and assorted vegetables on 10 acres. A relatively small farmer, she is a large-scale promoter of local food systems. With a SARE grant, Burns investigated whether a growers’ cooperative would help area farmers become more efficient and profitable, while offering their community access to fresh, sustainably grown vegetables.
“We went to every list of people involved in direct marketing,” Burns recalls. They surveyed 150 people within the Boise/Twin Falls area, which shares a similar climate and crops, about their interest and capabilities. Then, they identified markets, such as restaurants, natural food stores, a cafeteria, a hospital and a school.
The Boise-area farmers agreed to form their own co-op under the name Idaho Organics Cooperative, Inc. Now, the group has it down to a science. Every Sunday, co-op growers send lists of what they will have for delivery that week, including quantity, description and price, via fax, to their customers. Based on responses, the farmers harvest, then pool produce at a central location for boxing and delivery.
In Tennessee, in a similar venture with a value-adding twist, farmers who wanted to convert their harvest into high-value products formed a marketing cooperative called Appalachian Spring. With a SARE grant, Steve Hodges and the Jubilee Project investigated the feasibility of using a community kitchen in the nearby town of Treadway, then co-marketing their products -- a variety of salsas, fruit spreads and personal care goods. Once they crunched the numbers and saw a positive prognosis, they began selling the items through the co-op’s Website as well as through retail locations such as a regional airport gift shop.
The group also sells seasonal gift baskets to area church groups, a terrific way to highlight local products. “We tried wholesaling at first,” Hodges says, “but we found that small processors just can’t compete against big companies, even with a co-op.” In addition to joint marketing, co-op membership offers other benefits, like sharing equipment and bulk ordering supplies.
Cooperative marketing can be a great opportunity – or a headache. Here are some tips on how to make it work for you:
The USDA Rural Development Business & Cooperative program offers information and assistance in setting up and managing a cooperative marketing effort. It’s a great place to start (Resources).
Consider a marketing club, an informal cooperative that relies on using member marketing skills. Many extension offices offer training programs and assistance in setting up marketing clubs.
Join a nonprofit farmer network group to share ideas and inspiration.
Adequate market research and business planning are keys to successful cooperative marketing.