Marketing Niche Pork

PORK: MARKETING ALTERNATIVES MARKETING AND BUSINESS GUIDE National Sustainable Agriculture Information Service www.attra.ncat.org Abstract: This publication suggests that sustainable hog producers consider alternative marketing approaches for their pork. Sustainable hog producers are creating products that many consumers can’t find in their grocery stores, but want to buy. Consumers perceive sustainably raised pork to be healthier to eat. They are willing to pay hog producers more for raising pigs in a manner that is humane, helps sustain family farms, and is more environmentally friendly than conventional production methods. Direct marketing and niche markets are among the alternative marketing strategies discussed. Legal considerations, labels, trademarks, processing regulations, and obstacles are addressed. Sources of additional information are also provided. By Lance Gegner NCAT Agriculture Specialist Related ATTRA publications April 2004 ©2004 NCAT • Considerations in Organic Hog Production Table of Contents • Sustainable Hog Production Overview • Profitable Pork: Strategies for Pork Introduction................................. 1 Producers (SAN publication) Commodity vs. Niche • Alternative Meat Marketing Marketing ................................. 2 • Direct Marketing What Is Direct Marketing? ....... 2 • Farmers’ Markets Where Are the Niche Markets? .................................... 3 Introduction Niche Marketing Opportunities ........................... 4 Successful marketing is a necessary part of any Niche Marketing With profitable enterprise, and alternative marketing Others ........................................ 6 is often necessary for sustainable hog produc- Individual Direct Marketing ers to survive. Unfortunately, farmers who prac- tice sustainable and humane hog production Opportunities ........................... 9 often neglect marketing. Sustainable hog pro- Developing a Clientele ducers need to realize that successful market- Base .......................................... 14 ing efforts will likely be as management-inten- Marketing Channels ................ 14 sive as their production systems and that those efforts will be directed toward specialty and Carcass Cutout and Pricing.... 17 niche markets, not the conventional commod- Failure ........................................ 21 ity market and distribution network. There is Summary ................................... 21 an opportunity for producers of value-added References .................................. 22 and premium pork products to realize sustainable profits, but only if they are willing to de- Further Resources .................... 23 velop the necessary marketing skills. ATTRA is the national sustainable agriculture information service operated by the National Center for Appropriate Technology, through a grant from the Rural Business-Cooperative Service, U.S. Department of Agriculture. These organizations do not recommend or endorse products, companies, or individuals. NCAT has offices in Fayetteville, Arkansas (P.O. Box 3657, Fayetteville, AR 72702), Butte, Montana, and Davis, California. Kelly Klober, author of Storey’s Guide to Raising In the U.S., consumers expect an attitude of defer- Pigs and himself a farmer and value-added ence and responsiveness to their wants and needs. marketer, believes that farmers in the future If you are unable or unwilling to develop—or con- should not expect to support a farming opera- vincingly fake—such an attitude, stay in commodity-priced agriculture. However, if you see service tion with a 100 to 200 sow herd. Klober says, to others as a noble calling, don’t let the lack of “A lot of folks are seeing a time and means to fit specific marketing or production skills deter you. a few hogs into their farming mix. Hogs will be Aptitudes are rather easily learned. It is our atti- taken up by producers wanting to work with tudes that are difficult to change and that most modest numbers and also wanting to market often determine our fate (Nation, 1999). them all across the swine production spec- trum…. To succeed on the small farm, a sow herd will have to be quite small, fewer than 25— What Is Direct Marketing? and perhaps as few as 3-5. Even from small numbers, however, you will have to pursue as many marketing opportunities as possible.” Direct marketing involves selling products di- (Klober, 2000) rectly to consumers, thus allowing the producer the chance to receive a better price. This involves making a direct connection with consum- In an article in the Milwaukee Journal Senti- ers, determining their wants or needs, and pro- nel, Mike Marr—who raises and markets ducing the products that meet these needs. beef near Mineral Point, Wisconsin—com- ments, “Historically, we take what some- Joel Salatin, a Virginia pastured-beef and -poul- one is willing to give us. Business sense tells try producer, who has written several books on you that they’re not going to give you any this subject, suggests some factors to help de- more than they have to.” (Daykin, 2001) termine your sustainable pork pricing. First, don’t underprice your product. Sustainably produced pork products are supe- Commodity vs. Niche rior because they are more environmentally Commodity vs. Niche friendly, are humanely produced, and are pro- Marketing duced on family farms. Patronizing local farmers ensures that the local economy is stimulated. Before sustainable hog producers decide to pur- Salatin suggests that producers set a rewarding sue alternative marketing, they need to under- and satisfying gross margin and then stick to it. stand the differences between commodity and This will allow the producer to build a customer niche marketing. Commodity marketing is base with clients who appreciate the product marketing hogs that are undifferentiated from for what it is, not for what it costs. (Salatin, 1994) other hogs in the mass market. Niche marketing is differentiating your pork product to a Second, don’t try to satisfy all customers’ needs. market that wants a unique or superior prod- Take into account your time and the extra ef- uct. fort that is needed to accommodate their re- quests. Salatin says, “We must appreciate that Allan Nation, editor of Stockman Grass Farmer, we cannot compete with the big operators at has stated, “A commodity orientation means every level, and learn to stop our production or that as long as you meet the specs and can stand processing at the point where our quality/price the price you pretty much tell everyone else to enhancement can’t compete with the conven- go fly a kite. Such a selfish attitude absolutely tional alternatives.” (Salatin, 1994) will not work in direct marketing.” Nation further explains that direct niche marketing is more Finally, keep accounts receivable low. Operate about providing services to others by helping on a cash and carry basis as much as possible. them get what they want. He says: Salatin concludes, “There you have it. Set your prices so that no matter what your volume, your return is both emotionally and financially re- PAGE 2 //PORK: MARKETING ALTERNATIVES warding; steer clear of the temptation to do ev- the pressures I encounter as a small po- erything the customer wants; and let cash be tato and the pressures encountered by your business byword. By following these rules, the big potatoes is the amount of control your direct marketing endeavor can be satisfy- we have over the situations that cause ing.” (Salatin, 1994) pressure. No one can escape from the pressures of life, whether they are finan- cial, emotional, physical, or spiritual. But “You may as well do nothing for nothing as the chances of our affecting those pres- something for nothing.” sures, of dealing with them, of solving —Joel Salatin those problems, make the difference between an enjoyable lifestyle and a ter- rible lifestyle.” Direct marketing has unique characteristics that • Balance This helps to equalize the rela- depend on building relationships with the cus- tionship between producer and con- tomers. In fact, the term “relationship market- sumer. The producer has to remember ing” has been used to describe the best methods that the first rule of business is that the of direct marketing for family farmers. In an consumer is always right, but in some article in The Stockman Grass Farmer, Salatin cases a sale might actually cause a nega- describes the five advantages of relationship tive gross margin. If the consumer is not marketing. a good patron, the producer does not need to continue marketing to him or • Consumer Education Producers have her. Salatin says about taking someone to tell the consumers why their sustain- off of his customer list, “This helps to able pork products are different from the balance the producer-consumer relation- pork that can be bought in the grocery ship, so that we concentrate on profit- stores. This will involve explaining that able sales, appreciative customers, the pork comes from hogs raised more people who ‘get with the program.’“ humanely on a sustainable family farm, (Salatin, 1992) not by giant corporations, and that the pork is raised in a more environmentally friendly manner. This is not only good Where Are the Niche for business, it is also a small step toward Markets? the development of consumers’ aware- ness about farm, social, and health is- sues that affect their lives. An important part of direct marketing is identi- • Product Quality When the producer fying and targeting a market niche. A market- maintains control of the hogs and raises ing

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