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Strategies for Mid-Scale Food Value Chains in Distribution and Marketing

This conference presentation explores the dynamics of mid-scale food value chains, emphasizing strategic alliances that prioritize farmers as partners. It outlines innovative approaches to marketing, including direct marketing and commodity strategies, while addressing the challenges faced by mid-scale commodity producers. Case studies from organizations like Country Natural Beef and Organic Valley exemplify successful models of ethical and smart business practices. The session highlights the importance of fair agreements, brand identity control, and the significance of storytelling in food distribution.

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Strategies for Mid-Scale Food Value Chains in Distribution and Marketing

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  1. Mid-Scale Food Value Chains Food Distribution Research Society Conference Broomfield, CO November 3, 2009 Steve Stevenson (gwsteven@wisc.edu)

  2. Business & Marketing Options Value- Added 1. Direct Marketing • Opportunity Area Strategic Alliances & Food Value Chains Farmers’ Markets CSA’s Internet Sales Very Small Very Large 3. Commodity Marketing 4. Troubled Zone Mid-scale Commodity Producers Large-scale commodity Producers Commodity

  3. Strategies for “The Middle” Value- Added 1. Direct Marketing 2. Opportunity Area • Differentiate with Value-added Attributes • Aggregate for necessary volume • New kinds of business rules Very Small Very Large 3. Commodity Marketing 4. Troubled Zone Mid-scale Commodity Producers Commodity

  4. Mid-Scale Food Value Chains are Strategic Business Alliances that: • Deal in significant volumes of high-quality, differentiated food products; • Treat farmers as strategic partners, not as interchangeable input suppliers; • Distribute rewards and responsibilities equitably across the supply chain; • Emphasize strategic interests in the well-being of all partners; • Build value beyond the product to include the story of the people and the business practices; and • Operate effectively at regional levels.

  5. Agreements Among Value Chain Partners Ensure that: • Prices are negotiated on the basis of production and transaction costs; • Agreements are fair and for appropriate time frames; • Opportunities exist for farmers and ranchers to own and/or control their brand identity up the supply chain; and • Co-branding with supply chain partners is a strategic option.

  6. Case Studies • Country Natural Beef [www.oregoncountrybeef.com] • Shepherd’s Grain [www.shepherdsgrain.com] • Organic Valley Family of Farms [www.organicvalley.coop] • Red Tomato [www.redtomato.org]

  7. Big Theme • Value Chains Can Be Both “Smart” and “Right” 1) Smart Business: strategic partnerships (social capital) replace economic capital and expertise; nimbleness in the market; quality control efficiencies; food miles and food safety efficiencies; geographical identities 2) Ethical Business: equitable distributions; participatory organizations and alliances; ethical differentiations

  8. Other References • www.agofthemiddle.org • Thomas Lyson, G.W. Stevenson, and Rick Welsh, eds. 2008. Food and the Mid-Level Farm: Renewing an Agriculture of the Middle. The MIT Press: Cambridge MA.

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