Profile revised April 2008 by Diane Huntrods, AgMRC, Iowa State University.
Overview
Direct marketing is selling food and farm products directly to consumers without using an intermediary. This may include direct sales to grocery stores and restaurants; door-to-door sales; freezer sales; and Internet marketing.
Direct marketing of livestock products is not as common as direct marketing of vegetables and melons, for example, because livestock require further processing. The percentage of farms with direct sales was higher in more urbanized counties.
However, direct marketing can provide prices for producers higher than typical wholesale prices, yet below supermarket prices. Interest in food safety, the environment, people wishing to purchase local products and alternative agriculture have also supported this growth. Consumers enjoy dealing face-to-face with the producers of the products they are purchasing. This trend relates to traceability and accountability. The ability to trace a product to the original source is a critical food safety issue and provides consumers assurance that their food is safe and wholesome because they know the individual who produced it for them.
Increasing numbers of producers and producer groups are reaching new consumers using the Internet. With widespread sales of home computers, an estimated 60 percent of the U.S. population has Internet access. More consumers are shopping over the Internet. According to the U.S. Census Bureau, total e-commerce sales during 2007 were estimated at $136.4 billion, an increase of 19 percent over 2006.
Beef that is sold over the Internet must be processed in federally inspected plants. If the meat is processed in a state-inspected facility, it is only legal to sell meat within that state.
Farmers’ markets continue to grow in the United States. According to the USDA, there were more than 4,385 farmers’ markets in 2006, up from 3,700 in 2004. Farmers’ markets are beneficial to farm operations that have less than $250,000 in annual receipts.
Direct marketed beef will be affected by the growing trend of more meals consumed outside of the home. Expenditures on away-from-home food now account for about 47 percent of total U.S. food expenditures. Possible implications and opportunities could be further explored. Perhaps producer groups will want to consider providing pre-cooked, easy-to-reheat meat products or develop other products that can meet the needs of consumers.