Page 1 of 2 New Food and Farming Ventures - Resource Manual Sept. 2003
Chapter 3  Marketing
Place (Distribution) Narrative and Guidelines for
Facilitators
Place (distribution) includes activities that make purchasing products convenient for target
customers. Examples include farmers’ markets, roadside stands, restaurants, or grocery stores.
Place involves the geographic area to be covered. Place also involves the number and types of
markets served. Both impact a key aspect of marketing, which is physically transporting product
from where it is produced to locations where customers make purchases. Transportation of
products utilizes what are known as distribution channels. The three common distribution
channels include consumer direct, retail, and foodservice.
Consumer Direct Distribution
Consumer direct channels include selling to the customer at a farm, at a farmers market, through
mail distribution via catalog sales, or through other avenues such as weekly produce deliveries
during the growing season (known as Community Supported Agriculture).
The advantage of selling direct to consumers is that profits are not split with anyone outside the
business. The farmer controls who they market to and how. They are able to tell their story on
how the product was produced to each customer via their interactions and their promotions.
The disadvantage of selling direct is that the farmer is responsible for all of the marketing,
invoice collection, advertising, and transportation functions. The growth of the business is
dependent on how much time they can put into marketing their product.
Retail Distribution
Retail distribution involves various types of retail stores that sell products for home use. Retail
stores vary greatly in the flexibility they have in selecting products to carry. With some retailers,
decisions are made at corporate headquarters where buyers, merchandisers, and category
managers make all decisions, which are passed down to the individual stores. In these situations,
suppliers attempting to gain entry into the market must work directly with the corporate office.
Other retailers give individual stores a great deal of autonomy in making decisions relative to
product selection, pricing, and promotion. A supplier attempting to gain entry into this type of
retail market would work with individual stores on product introductions. After a product has
established a successful track record at the individual store level, then corporate may take an
interest and work with the supplier.
Foodservice Distribution
Foodservice distribution involves any facility that serves food to people. The foodservice
industry is extremely fragmented, with each segment filling different consumer needs. In
Page 2 of 2 New Food and Farming Ventures - Resource Manual Sept. 2003
Chapter 3  Marketing
general, foodservice can be partitioned into two sectors: the commercial sector and the noncommercial sector.
The commercial sector includes independent and chain restaurants, delis, hotels and professional
catering. Menus in these facilities are shaped by the fact that consumers can choose where to eat
and what to purchase, which means these facilities are more responsive to consumer demands.
The result is that the commercial foodservice sector may be the most lucrative non-direct market
for specialty products. Indeed, there has been an increase in the use of these products by
restaurant chefs, especially those working in independently owned high-end restaurants.
The non-commercial (institutional) segment includes hospitals, nursing homes, schools, and
prisons. This is a “captive” market where consumers typically have limited choice in menu
selection. Because this is a captive market, they can be less interested in specialty products,
although there has been some success in selling products to colleges and universities.
Guidelines for the Materials in this Section of the Manual
The materials in this section begin with three simple worksheets to help clients think about
distribution options, plus one designed to record information on potential retail and foodservice
customers. A two-page article that emphasizes the importance of place in the marketing mix
follows these worksheets.
The remaining publications are broken into two types. The first set begin with a publication that
gives an overview of consumer direct marketing options, which is followed by the best
publications we could find on these types of consumer direct distribution avenues:





Roadside Stands
Community Supported Agriculture
U-Pick
Farmers’ Markets
Internet Sales
The second set of publications cover retail and foodservice distribution options. Most are short
pieces that provide suggestions for success. After these is a publication on using a broker, and
the materials in the section of the manual end with lists of Iowa brokers and distributors. The CD
contains additional publications that go into more depth. These can be very useful for people
who are looking for more information on the specific topics discussed in these publications.
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color,
national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited
bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of
discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW,
Washington, DC 20250-9410 or call 202-720-5964.