Marketing organic products

Extracted from COG's

Organic Livestock Handbook

IS THERE A MARKET OR ISN'T THERE? Many producers are frustrated when they hear
that demand for ‘organic’ meat, eggs and dairy products is high and apparently increasing
dramatically, but they still do not seem to be able to sell their products for a good price.

If that applies to you, it is time to look seriously at the question of marketing. Remember that
there is a big difference between marketing and just selling a product. If you want to be one
of the success stories, a well thought-out marketing plan is essential.

While the demand has been growing, the marketing of ‘organic’ livestock products over the
past decade in Canada has proved challenging. The perseverance and entrepreneurial spirit
of a few organic farmers has paved the way for increasing numbers of producers to follow.

Cooperation and commitment, rather than competition, seems to be one of the keys to
success and is a fact worth remembering when trying to determine the marketing options for
your enterprise.

Constraints to be overcome
• Regulations: Quota restrictions for the poultry and dairy industries and tight
regulations about how meat is slaughtered and handled currently limit production and
marketing options in Canada. A willingness to persevere to get through all the hoops
seems to be essential. Regulations vary from province to province so make sure you
are informed about the current situation.
• Immature markets: Unless you are one of the lucky ones where there are already
established marketing cooperatives looking for more members, you will have to do
some basic market research.
• Consumer lack of understanding of ‘organic’: Many consumers assume that
‘natural’ means animals have been raised without growth hormones or routine
antibiotic use. This makes it difficult to differentiate ‘organic’ in the marketplace. Use
of terms such as ‘grass fed’, ‘free range’ or ‘humanely raised’ adds to the confusion.
Major changes can be expected now that the USDA has removed the prohibition on
the use of the word ‘organic’ on retail meat labels (as of January 1999). More
aggressive marketing of the organic label in the U.S. will likely benefit producers on
both sides of the border.
• Distance from large urban centres and lack of infrastructure: Local markets can
be very limited, which means distribution infrastructure is important.
• Lack of slaughter and processing facilities registered or suitable for organic
livestock.
Marketing your products
1. Plan carefully and well in advance; do not assume that the marketing will take care of
itself just because you have an organic product to sell. Establish goals and
understand the steps that must be taken to reach those goals before you embark on
a new enterprise. Be prepared to develop your market slowly and carefully.

2. Make sure you can produce a consistent quality product — if the meat is tough you
will not get repeat customers even if it is organic. If you are producing for the retail or
mainstream food store market, uniformity of product and the ability to maintain supply
are important factors.

Your product must justify the premium. Adding value to low end cuts by producing
sausages or meat pies, for example, may be critical to success.

3. Beware of charging excessive premiums or expecting large premiums just because

your product is ‘organic’, but do not underprice and try to compete with supermarket
prices. Many livestock products are already expensive and additional markups may
limit your market, requiring extra effort to find the customers that appreciate the
value.

You should aim for a fair price for a quality product. Figure out your cost of
production, adding in trucking, storage, marketing and certification costs.

You cannot assume that any additional costs associated with organic production will
be offset by premium prices, for it may not necessarily be the case.

It is reassuring, however, to know organic methods can cut production costs. For
example, in a 1994 study, Dr. Peter Stonehouse of Guelph University showed that
switching to organic methods significantly cut production costs on dairy farms,
resulting in an average increase of 62% to net farm income.

But had these farms been buying large amounts of expensive feed grains for their
livestock instead of growing it themselves, the economic picture would have been
very different.

4. Educate the consumer. Informative labelling, point of purchase literature, recipe

cards, free samples or tasting sessions, and articles in the newspaper are all tools for
reaching potential customers.

Look for opportunities to explain to consumers the benefits of supporting organic

farmers with their purchases. Respond to consumers who have environmental and
ethical concerns. Explain to them they can become part of the solution by buying
organic products that come from a humane and non-polluting environment, and that
animals are raised without the use of synthetic chemicals, antibiotics and growth
hormones.

5. Consider all the options — direct marketing to consumers, retail outlets or

restaurants, cooperative marketing ventures, through distributors and so on.
Local marketing
Direct marketing can add value with limited capital input.

• Marketing direct to consumers. Sometimes called relationship marketing, this

method is usually based on word-of-mouth recommendations and developing
customer loyalty. It offers advantages to both the farmer and the consumer. You,
not the livestock markets, determine the prices and it provides an opportunity to
educate consumers and to sell to those who really appreciate the product.

• Via local delivery programs or CSA (Community Shared Agriculture) type

operations. There may be an opportunity to offer additional product lines such as
meat and eggs to consumers already involved in a vegetable box delivery system.
Consider the possibility of working with other organic farmers in your area to develop
such a program if one does not exist already.

• Local retail through butchers and specialty stores. If you want to market the product
as ‘organic’ certification is recommended. It provides the guarantee in place of the
trust established in the direct consumer-producer relationship.

• Supplying the restaurant trade. With meat it is usually only high-end cuts that are in
demand so more than one market will have to be developed.

More distant markets

Cooperative marketing of organic meat and dairy products has proven to be a good way to
reach larger, more distant markets and to overcome marketing board constraints.

The pooling of resources and production allows for the hiring of consultants to help with
market research and development, and makes applying for grants easier. It also improves
consistency of supply and provides the volumes necessary for the larger markets while
maintaining family farm quality and control.

In 1998 an Organic Meat Marketing Project in the northern U.S. identified eighteen possible
areas for cooperation ranging from joint marketing to retailer education and identifying fair
pricing at the farm gate.

A growing interest in processing facilities for specialized meats could help the organic
industry. Currently there are discussions between a cooperative of producer groups and a
European investor on the feasibility of establishing a multi-species plant in Manitoba for
processing specialty types of livestock such as ratites (emu, ostrich), deer, wildboar or bison.

A stated goal is to have, within five years, every animal that goes through the plant certified
organic. Most of the product from the plant would be exported to Europe but it could also
serve the domestic market.

Successful marketing ventures are not, of course, limited to marketing cooperatives.

Farmers or ranchers can contract with companies to supply animals as with Coleman Natural
Meats in the U.S. or market their own products across the country as some organic yogurt
producers have done.
This text is extracted from COG's Organic Livestock Handbook. The book goes on to
discuss the marketing of specific products in the organic market. For the full text, and much
more information on organic livestock farming, you can order this outstanding book at the
COG website (www.cog.ca).