Direct marketing: A growing opportunity for Alberta farms

Alberta Agriculture and Forestry
May 02, 2018
By Alberta Agriculture and Forestry
Direct marketing: A growing opportunity for Alberta farms
Alberta Agriculture and Forestry
Alberta farms are seeing more opportunities to sell their products directly to consumers, as more people want to know where their food comes from and how it is produced.

Alberta Agriculture and Forestry (AF) has been tracking local food demand trends in various direct to consumer market channels, including on-farm retail, farmers’ markets, and community supported agriculture (CSA) since 2004.

“Local food sales through direct to consumer market channels have more than doubled since 2008,” says Christine Anderson, local foods specialist with AF. “We are expecting sales from this past year to reach $1.2 billion.”

The Study of Local Food Demand in Alberta 2016 found that food spending at farmers’ markets, farm retail, and restaurants serving local food in Alberta exceeded $1.5 billion in that year.

The 2016 Census of Agriculture included a question about farms selling food directly to consumers. It found that about five per cent, or 2,062 farms in Alberta, sold food directly to consumers, below the national average of 12.6 per cent.

“That breaks down to one Alberta farm selling directly to consumers for every 1,972 Albertans,” says Anderson. “When compared to the national average of one direct to consumer farm for every 1,434 people, there is a clear opportunity for new farms to enter the direct sales market in Alberta.”

Of those 2,062 Alberta farms selling directly to consumers, 35 per cent were new entrants to direct to consumer market channels. Beef cattle farms represented the highest proportion of new entrants at 21 per cent, followed by apiculture at 12 per cent, and animal combination farming at 11 per cent.

More than two-thirds of the new entrants were small farms with annual sales less than $50,000, 18 per cent were medium-sized, and 10 per cent were large with sales in excess of $250,000.

Most farms, or 85 per cent, sold food and products directly to consumers either at a farm gate, stand, kiosk, or U-pick operation. About 20 per cent sold their product at farmers’ markets, and six per cent through CSA.

“Census data indicates that direct marketing farms yielded higher than average profitability compared to farms that did not sell directly to consumers,” explains Anderson. “The profitability ratios of some direct marketing farms were further improved if they sold value-added products through farmers’ markets or CSAs.”

Farms marketing directly to consumers also showed a higher average of gross farm receipts to farm area at $442 per acre, compared to farms that did not sell directly to consumers with $349 per acre.

“Direct marketing farms also revealed a higher percentage of female operators, at 38 per cent, than other types of farms, at 31 per cent,” notes Anderson. “Interestingly, Alberta has more female direct marketing farm operators than the national average, which is 36 per cent.”

The data also showed that young operators who were under the age of 35 were more involved in farm direct marketing in Alberta: Nine per cent compared to eight per cent province-wide in all agriculture operations.

For a more information on opportunities in direct to consumer marketing, visit Explore Local or contact Christine Anderson local foods specialist with Alberta Agriculture and Forestry.

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