Estimating the Economic Impact of Farmers Markets - Farmers

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					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.

 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.
 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.
 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.
 What does the Rochester
  Public Market mean to
       Rochester?

        DE CE MBE R 9 , 2 0 1 0
  LO CAL AND G LO BAL M A R K E T
         RE S E ARCH CLAS S
DE PARTME NT O F ANTHRO P O L O G Y
   UNI V E RS I TY O F RO CH E S T E R
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.
Methods

What we did:

•   Interviewed

    o   48 shoppers
    o   13 vendors
    o   6 business owners

•   Conducted an online survey with 565 people
Measuring Impact of the RPM
   on the Local Economy
Our approach
To measure the impact of the RPM on the local economy:




1.   W E E S T I M AT E D S P E N D I N G A N D S A L E S B A S E D O N
     I N F O R M AT I O N O B TA I N E D F R O M C U S T O M E R S A N D
     VENDORS DURING OUR INTERVIEWS.

2.    W E M U LT I P L I E D T H E D O L L A R A M O U N T S F O R
     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
     I O WA FA R M E R S M A R K E T S , W E E S T I M AT E D T H E
     T O TA L E F F E C T S O F R P M A C T I V I T Y O N T H E L O C A L
     R O C H E S T E R E C O N O M Y.
    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
P R O B L E M AT I C I S S U E I N C A L C U L AT I N G C U S T O M E R S P E N D I N G : T H E
2+ MILLION FIGURE FOR NUMBER OF CUSTOMERS REFLECTS
AT T E N D A N C E B Y D AY ( T U E S D AY, T H U R S D AY, S AT U R D AY, S P E C I A L
E V E N T S ) , N O T S E PA R AT E I N D I V I D U A L S H O P P E R S . T H E R E M AY B E
S O M E O V E R L A P.
    Vendor sales
     Number of Stall                           Estimated Annual
     Licenses / Month                          Sales / Vendor

     January-March         180            $52,000.00, $52,000.00, $130,000.00,
     April                 210            $52,000.00, $250,000.00, $2,990.00,
     May-September          290           $28,000.00, $58,000.00, $39,000.00,
     October-December       210           $52,000.00, $250,000.00.

      Average       =      ~240            X          $87,817.27
             E S T I M AT E D T O TA L A N N U A L V E N D O R S A L E S

                          $21,076,145.50
( T H E AV E R A G E WA S C A L C U L AT E D B Y FA C T O R I N G I N T H E 11
                                V E N D O R S T H AT
      D I D G I V E S A L E S I N F O R M AT I O N O U T O F 1 3 V E N D O R S
                                 INTERVIEWED)
Customer vs. vendor estimates


RECAP ON RPM ANNUAL GROSS
          SALES:

CUSTOMER SPENDING = $15,833,250
      Vendor sales = $21,076,080
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.
 Total effects of RPM
     V E N D O R E S T I M AT E                               Customer estimate

      DIRECT SALES OF                                   Direct sales of $15,833,250
         $21,076,080                                              x 1.58 =
           X 1.58 =
                                                         $25,016,535 total effects
       $33,300,206 total effects                        of RPM on local economy.
       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.
Comparative contexts
 TOTAL EFFECTS                   EBT sales at RPM

           RP M                          $237,904
                                (1st year, July 2008-June 2009)
    $33,300,206

  I O WA FARME RS                 Oregon token sales
      MARKE TS                         (statewide 2009)
  ( S TAT E W I D E 2 0 0 4 )
                                         $261,229
    $31,507,717
       Customers




By: Caitlin Simpson, Elizabeth Riedman,
     Emma Rainwater, Miles Booth
Customer Demographics
•   Age                 • Gender
      (18-24) 13            Female: 28
      (25-29) 11            Male: 16
      (30-39) 5             Couples: 5
      (40-49) 8
      (50-59) 9         • Household members
                             (1) 12
      (60+) 4
                            (2-3) 26
                            (4-6) 11
    Interviewed 48 people
Frequency of Market
   Visits Monthly
Seasonal Attendance
Special Events
Businesses Attended
Reasons For Attending
Annual Spending
Zip Code Distribution
 Customer Prototypes

 PRODUCT BASED

EXPERIENCE BASED
             Product Focused
•   Price
•   Quality
•   Weekly meals
•   Errands
•   Origin of product
•   Spending Habits
•   Frequent Visits (except special events)
             Experience Based

•   Of the people interviewed, the most highly valued experiences
    were as followed:
    o   Diversity- Words to describe the market included ethnic, different,
        cultural, and eclectic
    o    Support local farms
    o   Community- Part of a greater whole
    o   Interacting and getting together with friends and family
    o   Atmosphere- Many said that "there is nothing else like the market in
        Rochester"
    o   Walking encourages exercise
  U P O N E VA L U AT I N G T H E O V E R L A P P I N G R E A S O N S
  F O R C O M I N G TO T H E M A R K E T, I T I T C L E A R T H AT
F O R M A N Y C U S TO M E R S , T H E M A R K E T R E P R E S E N T S
     A N D FA C I L I TAT E S T H E I D E A O F C O M M U N I T Y
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.
    Suggestions For Change

•   Parking
•   Vendors reluctant to take tokens
•   Facade of businesses
•   Better organization
•   More organic food
•   Differentiate between farm grown and wholesale goods
     Vendors


BY: STEPHANIA ROMANIUK,
ELIZA FRIEDMAN, SUSANNA
 VIRGILIO, VON HOLGUIN
                 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.
Where Vendors come from
            How long they’ve been in
                RPM/business

• RPM: limited amount of responses
  o   Range: 4-70 years
  o   Mean: 23
  o   4, 4, 12, 15, 24, 26, 37, 65

• In the business: limited amount of
  responses
  o   Range: 30-70 years
  o   Mean: 51 years
  o   42, 32, 55, 60, 49, 68
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
        Relations with Customers
• Relations are casual and friendly
• Steady and returning customers
• Vendors:
  o are attentive but firm
  o stay current in news relating to products
  o inform customers about products. Many customers ask
    questions
  o realize the importance of having good relations with
    customers
  o listen to customers’ needs
  o hold a sense of pride of good customer relations
• Sense of community
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”
Thoughts on Winter Shed
• Many were ambivalent or not interested
• Suggestions
  o   Deeper stalls and more loading area space
  o   More effective way of heating
  o   “Make it more open”
  o   Doors which are easier to open
  o   Glass windows
  o   Consistent cleanliness
• Detractions
  o   Too hot for certain products
  o   Not enough space for customers
  o   Current one is not filled to capacity
  o   Rent is too expensive
    Suggestions for Improvement


•   Advertising
•   Parking
•   Rent
•   Repairs/ cleanliness
•   Receptive to vendors concerns
          Businesses


By: Emily Adams, Kristina Diaz and Kevin Zheng
                    Businesses


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

JAVA’ S                           Union Street Bakery
• Several locations in          • Business started 5 years
  Rochester, NY                   ago
• Majority of revenue at        • Open 7 days a week
  the RPM location              • Greater proportion of
  comes from bean sales           sales happen during days
  to businesses in                when public market is
  Rochester area                  open
• Open 7 days a week
  o   Week days primarily for
      bean sales
                          Stands
 C H E R RY ’ S                                Juan and Maria’s
 EUROPEAN              Scott’s                 Empanadas
                     • Family owned          • Public market since
• Family owned                                 2003
  business             business              • Public market is only
• Owned for 5        • At market for 19        location
                       years                 • Originally from Chile
  years                                        and liked the idea of an
                                               open air market
                                             • Advertise on radio, in
                                               newspapers and on
                                               facebook


 The average estimated number of customers for all 3
             stands on a Saturday is 400
                   Specialty Shops
           Giordano Import Inc. European Cheese Shop



•   Family business

•   Began importing olive oil from Italy and expanded to cheese,
    olives and other imported specialty items

    o   Imports directly from Europe
                  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
   o Pride in quality and affordability of products
   o “I don’t have enough room or resources to advertise”
   o 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
Rochester Public Market
    Online Survey


 BY: KATHERINE BURNHAM, EDWARD
     CHI, ARIELLE FRIEDLANDER,
 ELIZABETH KIM, JOSHUA STILLMAN,
          SCOTT STRENGER
       AND BENJAMIN WITTEN
     Our Survey on
  SurveyMonkey.Com!
http://www.surveymonkey.com/s/6VYRJ5M
          Survey Questions
1. Are you aware of the Rochester Public Market?
2. How did you first hear about the Rochester Public
Market?
3. Are you aware of the following special events that
occur at the Market?
4. How useful do you think these special events are in
attracting customers to the market?
5. In your opinion, what does the Rochester Public
Market offer that other stores do not?
6. Where do you shop to purchase the following goods?
[RPM, Other Stores/Supermarkets, Other Farmers'
Markets]
7. Demographic Information - Age, Gender, Zip Code
8. How did you hear about our survey?
                  "Logistics"

•   Collected 565 Responses
•   Out of those 565, 512 participants completed
    the entire survey
•   Distributed Survey through:
     o Facebook Event
     o Friends of the Market
     o Weekly Buzz
     o @Rochester
Are You Aware of the RPM?
How did you hear about the Market?
Demographics
                Demographics


Why such a significant
difference?
 • Women more likely to
   take surveys than men
 • Women more often shop
   for food
Who Comes to the Market?
   How Did You Hear About The Survey?




                                                                       "From my niece who is a
                                                                          student at U of R"

"I work for the Culver Medical Group (part of Highland Hospital and under the U of R. "umbrella")
and found in my email."
"Work at URMC. I've shopped at the Market weekly for 30 years.”
"Isn't anyone interested in why I don't shop at the Public Market? I heard about the survey from
@Rochester, the UR daily e-newsletter."
What Do People Like To Buy
  At The Public Market?
Special Events
Are you Aware of Special Events?
Responses: No; Yes, but have not attended; Yes, have attended

Ordered Least Attended Event to Most Attended
Harvest Jamboree Ex. 61.3% 30.0% 8.8%
Artist Row
Savor Rochester
Christmas Holidays
Concerts & Night Market
Community Garage Sale
Flower Days 34.3% 31.0% 34.7%

Factors:
        Students were high percent of participants (not local);
        Some events only occur once a year, while others happen frequently
     Are the Special Events Useful in
          Attracting Customers?
Never heard of Market N/A: 27/4 - 42.4%

Not Useful: <4.1%

Somewhat Useful: 20.1- 32.1%

Very Useful: 29.1- 49.9%
           What does the RPM offer?
- Categorization of responses
                          Responses

"The public market offers great prices on fresh locally grown
products. I think it is beneficial because you get a lot for your dollar
while supporting local Rochester Area businesses."

"The opportunity to buy local, and to shop in a real market
atmosphere. It makes buying needed things more fun and interesting.
And it's more personal, more in touch with the community, since you
are interacting with the people who actually grow and produce the
merchandise."

"Fresh fruit for cheaper, and the experience is always fun.
Oh yea, the AMISH PEOPLE MAKE THE BEST BREAD EVER."

"The freshest produce. Makes 'Eat Local' an easy reality. A feel for
how cosmopolitan our city is."
                    Responses, cont.


"Necessary items at bargain prices all at the same location. Also, the
feeling of a more direct and ancient form of commerce. What I enjoy
the most is purchasing directly from local farmers and feeling part of
the community at large. Although I have heard that many vendors
are distributors or other forms of middlemen (i.e. not necessarily
farmers) and I think this may be misleading to many."

 "Lively wonderful healthy mix of people from all the cultures and
neighborhoods in Rochester. The ONLY place where this happens.
local produce, in season foods, places to sit and watch the crowds,
drink coffee, Italian cheese shop."
 Suggested Ways to Further Advertise
            and Expand
Facebook: Advertisements/Events/Group
  -Expand and Update

"Local Foods Week" at University of Rochester
  -Contribute and advertise

Bike-Friendly (Could reduce parking problem possibly too)

Come to campus
  -Leftover produce Tues/Thurs?

Reusable Bags and RPM Pins
   Further Ways to Advertise cont.

GroupOn Deals?

Feature information in @Rochester and the Weekly Buzz

Ask vendors how they would prefer to be advertised

Frequent feedback
  -Customers and vendors
Contact Information

Local Foods Week:
  Dining Services, Campus Dish,
  University Council on Environmental Sustainability

http://www.rochester.edu/sustainability/dining.html

Bring Market to Campus:
  Celia Palmer, Director of Conference & Events Office
  ext. 3-4571

  www.conferences.rochester.edu
  (585) 275-4111