April 2020 - 40

FARM MARKET & AGRITOURISM
Collaborative marketing an option for pursuing expansion
So, what is a collaborative
BRIAN MOYER
Penn State Extension
bfm3@psu.edu
At a recent grower meeting, I gave a
presentation on collaborative marketing.
Out of that meeting, a group of about
eight farms decided they have an
opportunity to do something together
that they couldn't do individually.
These farms have CSA's (community
supported agriculture) as their primary
business model during the growing
season. They do not have the capacity
to grow enough storage crops to offer
their customers a winter CSA share but
collectively they can. They are currently
working out the details such as who will
grow what? How many shares to offer?
What are the costs? Who will manage
the money?
The attractive thing about collaborative
marketing is you are not forming a
business entity to start. It is an agreement
on a project that can be measured over a
limited time period at the end of which,
decisions can be made on whether to
continue or not. It's probably one of the
least risky things you can do to expand
your marketing channels.
marketing agreement? Cornell has a
great publication on this:
www.smallfarms.cornell.edu/
wp-content/uploads/2012/05/
Collaborative-Marketing-for-Small-Farms10385vc.pdf.
It is well worth taking a look
if you are considering this opportunity.
According to the fact sheet,
" Collaborative marketing is a realistic
solution for small- to mid-size farms
that are seeking access to larger
markets but are unable to individually
serve such accounts. In collaborative
marketing, several likeminded producers
join together formally to market and
distribute farm products, but not
necessarily under the governance or
control of a cooperative. "
Once a group of farms decide
they want to collaborate, they
usually assume they need to form a
cooperative, but that isn't always best
way to move forward. The fact sheet
highlights several ways that farms can
collaborate, but I will focus on one
which is a joint venture agreement.
A joint venture agreement is usually
a limited term project as with the case
of the CSA farms I'm working with.
In their situation, they've identified
the potential need. Their customers
A summer CSA share from the Michigan
State University Student Organic Farm.
Photo: Denae Friedheim
currently aren't buying from them in
the winter. With a winter CSA, they
can market to an existing customer
base and won't need to attract new
customers. They've set a time period
for the project that will run from
November through March. At the end
of that time, they can evaluate how
well it did or didn't work. If it works
well, they can consider forming a
business entity such as a cooperative
or continue with a joint venture
agreement. They've also started to
discuss the potential of small-scale
wholesale opportunities.
Some key things need to be
considered with a joint venture
agreement. You need to identify the
producers who will participate. You
will need clearly define objectives.
Who are the customers currently
not being served? You will need to
maintain product availability across
several farms. The rationale for
collaboration should be clear.
If you are considering a wholesale
project, start small with a limited
number of products. The expectations
need to clear and understood by
everyone involved. What is the
quantity of product? What grade?
How many units? How will it be
packaged? This will create a uniform
standard for all participants and
consistency for the customer.
Take a good look around you and
see where the opportunities are. If
you can't address them by yourself,
see where you can partner and grow
your market. FGN
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April 2020

Table of Contents for the Digital Edition of April 2020
