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Farmers Market Federation of New York

Farmers Market Federation of New York. Estimating the Economic Impact of Farmers Markets March 4, 2011. Estimating the economic impact of a Market in the community is an inexact science at best. Vendors, by nature, are reluctant to release sales information.

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Farmers Market Federation of New York

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  1. Farmers Market Federation of New York Estimating the Economic Impact of Farmers Markets March 4, 2011

  2. Estimating the economic impact of a Market in the community is an inexact science at best. Vendors, by nature, are reluctant to release sales information. The total impact of the Market does not stop at the market gate but extends into the community in the form of increased traffic and sales at adjacent businesses, increase in property values and improvements in livability ratings. Also the multiplier effect resulting from the dollars circulating in the local community must be considered.

  3. In 1996, Nutter and Associates put together a master plan for the Rochester Public Market. Part of this study included an estimation of total sales derived from; • Interviews with vendors and customers • Sales at comparable retail outlets • Information supplied by wholesalers and businesses on the market • Police estimates of attendance • They estimated the total Market retail sales at around $8,000,000 and the sales of the wholesale outlets at the Market at $30,000,000.

  4. In the fall of 2010 a group of students from the University of Rochester utilizing a tool developed by the University of Iowa, executed another study of the Market’s economic impact as well as the effectiveness of our marketing efforts and some of their suggestions for improvements. What follows is the presentation that the students developed.

  5. What does the Rochester Public Market mean to Rochester? December 9, 2010 Local and Global Market Research Class Department of Anthropology University of Rochester

  6. Objectives • To assess the impact of the RPM on the local economy. • To understand the value of the RPM for shoppers, vendors, business owners. • To identify marketing messages and venues for reaching new customers.

  7. Methods What we did: • Interviewed • 48 shoppers • 13 vendors •  6 business owners • Conducted an online survey with 565 people

  8. Measuring Impact of the RPMon the Local Economy

  9. Our approach To measure the impact of the RPM on the local economy: We estimated spending and sales based on information obtained from customers and vendors during our interviews. 2. We multiplied the dollar amounts for customer spending and vendor sales by the number of customers and vendors using figures supplied by the RPM.  3. Following the model used in a study of Iowa farmers markets, we estimated the total effects of RPM activity on the local Rochester economy.

  10. Customer spending According to shoppers: $393 average annual spending, or $7.75 per week. $7.75  X  2,043,000 customer attendance = Estimated Total Customer Spending $15,833,250 Problematic issue in calculating customer spending: the 2+ million figure for number of customers reflects attendance by day (Tuesday, Thursday, Saturday, special events), not separate individual shoppers. There may be some overlap.

  11. Vendor sales     Estimated Annual  Sales / Vendor $52,000.00, $52,000.00, $130,000.00, $52,000.00, $250,000.00,  $2,990.00, $28,000.00, $58,000.00, $39,000.00, $52,000.00, $250,000.00. Number of Stall  Licenses / Month January-March           180 April                          210 May-September          290 October-December     210 Estimated Total Annual Vendor Sales  $21,076,145.50 (The average was calculated by factoring in the 11 vendors that  did give sales information out of 13 vendors interviewed)  Average    =      ~240         X          $87,817.27

  12. Customer vs. vendor estimates Recap on RPM annual gross sales: Customer spending = $15,833,250 Vendor sales = $21,076,080

  13. Measuring total effects Models of economic impact include not only direct effects (sales as estimated above) but also indirect and induced effects. This provides total effects on the local economy. Indirect effects in the farming industry involve purchases of seed, fertilizer and other items that are part of producing crops. Induced effects reflect spending from earnings (profit) by farmers and businesses from whom they buy the items for production. Based on the Iowa study, a multiplier of 1.58 applied to the estimate of gross sales provides a measure for total effects.

  14. Total effects of RPM Customer estimate Direct sales of $15,833,250 x 1.58 = $25,016,535 total effects of RPM on local economy. Vendor estimate Direct sales of $21,076,080 x 1.58 = $33,300,206 total effects of RPM on local economy. Source of economic model and total effects multiplier: “Consumers, Vendors, and the Economic Importance of Iowa Farmers’ Markets: An Economic Impact Survey Analysis”, Daniel Otto, 2005. Article is available online (Google author’s name and article title). We spoke with Dr. Otto and he believes that the multiplier is a very reasonable tool for the Rochester metro area economy.

  15. Comparative contexts • EBT sales at RPM • $237,904 • (1st year, July 2008-June 2009) • Oregon token sales • (statewide 2009) • $261,229 Total effects RPM $33,300,206 Iowa farmers markets (statewide 2004) $31,507,717

  16. Customers By: Caitlin Simpson, Elizabeth Riedman, Emma Rainwater, Miles Booth

  17. Customer Demographics • Gender • Female: 28 • Male: 16 • Couples: 5 • Household members          • (1)    12 • (2-3)  26 • (4-6)  11 Age (18-24) 13 (25-29) 11 (30-39) 5 (40-49) 8 (50-59) 9 (60+) 4 Interviewed 48 people

  18. Frequency of Market Visits Monthly

  19. Seasonal Attendance

  20. Special Events

  21. Businesses Attended

  22. Reasons For Attending

  23. Annual Spending

  24. Zip Code Distribution

  25. Customer Prototypes Product Based Experience Based

  26. Product Focused Price Quality Weekly meals Errands Origin of product Spending Habits Frequent Visits (except special events)

  27. Experience Based Of the people interviewed, the most highly valued experiences were as followed: Diversity- Words to describe the market included ethnic, different, cultural, and eclectic  Support local farms Community- Part of a greater whole Interacting and getting together with friends and family Atmosphere- Many said that "there is nothing else like the market in Rochester" Walking encourages exercise Upon evaluating the overlapping reasons for coming to the market, it it clear that for many customers, the market represents and facilitates the idea of community

  28. But What About People in Both Categories? While some people fall into both categories marketing specifically to either group will effectively encourage the people in both groups to come to the market. Further, we would like to point to the fact that the market is unique in the sense that it offers both low prices and a quality experience.

  29. Suggestions For Change Parking Vendors reluctant to take tokens Facade of businesses Better organization  More organic food Differentiate between farm grown and wholesale goods

  30. Vendors By: Stephania Romaniuk, Eliza Friedman, Susanna Virgilio, Von Holguin

  31. Life Lessons • Commitment to customers • Career is first and foremost • Vendors are successful when they’re fair to themselves first, then their customers • Know products inside and out • Character and integrity are vital as a business person • It’s impossible to get along with everyone, but cherish the fact that people from all walks of life come to the RPM • General business lessons: marketing, pricing, accounting, etc.

  32. Where Vendors come from

  33. How long they’ve been in RPM/business • RPM: limited amount of responses • Range: 4-70 years • Mean: 23 • 4, 4, 12, 15, 24, 26, 37, 65 • In the business: limited amount of responses • Range: 30-70 years • Mean: 51 years • 42, 32, 55, 60, 49, 68

  34. Where the Vendors Sell in Addition to the RPM • ~67% of vendor surveyed said they ONLY sell at the RPM • Outside of Buffalo • Roadside stands near farm • Other public markets and wholesale • Store in Albion • Markets across NY, PA, and FL

  35. Relations with Customers • Relations are casual and friendly • Steady and returning customers • Vendors: • are attentive but firm • stay current in news relating to products • inform customers about products. Many customers ask questions • realize the importance of having good relations with customers • listen to customers’ needs • hold a sense of pride of good customer relations • Sense of community

  36. Thoughts on vendors’ RPM involvement • Opportunity to learn • Profit/livelihood • Desirable place to work • Exposure to customers • Personal history and family involvement • Pride in product quality and personal integrity • Relationships with customers • “It’s a lifestyle”

  37. Thoughts on Winter Shed • Many were ambivalent or not interested • Suggestions • Deeper stalls and more loading area space • More effective way of heating • “Make it more open” • Doors which are easier to open • Glass windows • Consistent cleanliness • Detractions • Too hot for certain products • Not enough space for customers • Current one is not filled to capacity • Rent is too expensive

  38. Suggestions for Improvement • Advertising • Parking • Rent • Repairs/ cleanliness • Receptive to vendors concerns

  39. Businesses By: Emily Adams, Kristina Diaz and Kevin Zheng

  40. Businesses • 11 Businesses within and adjoining the market • 3 categories: • Stand - Juan & Maria’s Empanadas, Scott’s, Cherry’s European, Zimmerman’s Hots • Coffee/Bakery – Java’s, The Little Bakery, Union Street Bakery, Boulder, Lena’s Bake Shoppe • Specialty shop – Giordano’s European Cheese, Fare Game

  41. Bakery and Coffee Shops Union Street Bakery Java’s • Several locations in Rochester, NY • Majority of revenue at the RPM location comes from bean sales to businesses in Rochester area • Open 7 days a week • Week days primarily for bean sales • Business started 5 years ago • Open 7 days a week • Greater proportion of sales happen during days when public market is open

  42. Stands Juan and Maria’s Empanadas Scott’s • Family owned business • At market for 19 years • Public market since 2003 • Public market is only location • Originally from Chile and liked the idea of an open air market • Advertise on radio, in newspapers and on facebook • Family owned business • Owned for 5 years Cherry’s European The average estimated number of customers for all 3 stands on a Saturday is 400

  43. Giordano Import Inc. European Cheese Shop Specialty Shops Family business Began importing olive oil from Italy and expanded to cheese, olives and other imported specialty items Imports directly from Europe

  44. Conclusions • Majority are family run and exist only at the market • Stands and coffee shops/bakeries are more popular • Most businesses rely on customer loyalty and word of mouth advertising • Pride in quality and affordability of products • “I don’t have enough room or resources to advertise” • Many believe that the RPM should do more to advertise businesses • Some stands would like to be open during the special events held at the RPM but feel the cost to be open is to high

  45. Rochester Public MarketOnline Survey By: Katherine Burnham, Edward Chi, Arielle Friedlander, Elizabeth Kim, Joshua Stillman, Scott Strenger and Benjamin Witten

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