Collaborative Marketing

At a recent grower meeting, Extension Educator Brian Moyer gave a presentation on Collaborative Marketing. Out of that meeting, a group of about 8 farms decided they have an opportunity to do something together that they couldn't do individually. These farms have CSA's (community supported agriculture) as their primary business model during the growing season. They do not have the capacity to grow enough storage crops to offer their customers a winter CSA share, but collectively they can. They are currently working out the details such as: Who will grow what? How many shares to offer? What are the costs? Who will manage the money?

The attractive thing about collaborative marketing is you are not forming a business entity to start. It is an agreement on a project that can be measured over a limited time period at the end of which decisions can be made on whether to continue or not. It's probably one of the least risky things you can do to expand your marketing channels.

So, what is a collaborative marketing agreement? In the Cornell University Extension publication "Collaborative Marketing for Small Farms", the authors define collaborative marketing as "a realistic solution for small- to mid-size farms that are seeking access to larger markets but are unable to individually serve such accounts. In collaborative marketing, several like-minded producers join together formally to market and distribute farm products, but not necessarily under the governance or control of a cooperative."

Once a group of farms decide they want to collaborate, they usually assume they need to form a cooperative, but that isn't always best way to move forward. This article highlights several ways that farms can collaborate, but we will focus on a joint venture agreement.

A joint venture agreement is usually a limited term project. As an example, Farm X has identified the potential need. Their customers currently aren't buying from them in the winter. With a winter CSA, they can market to an existing customer base and won't have to attract new customers. They've set a time period for the project which will run from November through March. At the end of that time, they can evaluate how well it did or didn't work. If it works well, they can consider forming a business entity such as a cooperative or continue with a joint venture agreement. They've also started to discuss the potential of small-scale wholesale opportunities.

Some key things need to be considered with a joint venture agreement. You need to identify the producers who will participate. You will need clearly define objectives. Who are the customers currently not being served? You will need to maintain product availability across several farms.

If you are considering a wholesale project, start small with a limited number of products. The expectations need to clear and understood by everyone involved. What is the quantity of product? What grade? How many units? How will it be packaged? This will create a uniform standard for all participants and consistency for the customer.

Take a good look around you and see where the opportunities are. If you can't address them by yourself, see where you can partner and grow your market.