Good Food, Good Economics

farmersmarket

Farmers’ Markets: Good Food and Good Economics

Devin Morgan, Knull Group

Everyone knows that farmers’ markets are a great place to get fresh, locally grown food.  Most markets include not only fresh produce, meat, and eggs, but value added products like cheese, jams & jellies, baked goods, and other hand-crafted products.  They may include other local artisans selling unique, functional, and artistic wares with a local connection.  The opportunity to buy conventional, organic, heirloom, and humane products directly from the people who produce them gives real meaning to knowing your farmer and knowing your food.  As customers of farmers’ markets, we are the beneficiaries of all of this great food and the joy and health it brings us and our families.  But have you given much thought to the economic impact of farmers’ markets?  Is there more to them than just a place to pick up hot dogs made with grass fed organic beef?

I am an economic development geek, so I am very interested in these questions.  Working with business incubators in the D.C.-Baltimore area, I stumbled into the community of people interested in how you encourage the growth of jobs, investment, and supportive business environments on a local, regional, and national level.  Economic developers are amazing folks who have dedicated their lives to figuring out how to help entrepreneurs and communities succeed, while they stay in the background and leave the glory to the politicians and successful ventures.  Most of them are underappreciated for the Sisyphean task they have undertaken, but they keep at it.

I was delighted when Lyn Weir, Cooperstown Farmers Market manager shared an article from Farmers’ Markets Today called “The Economic Impact of Farmers Markets”.  The study looked at three urban farmers’ markets and calculated their economic impact based on vendor sales through the market, increased sales from adjacent businesses, and the surrounding area.  The smallest market they looked at had vendor sales of $52,000 per year, but that lead to nearly $20,000 to nearby businesses, and $72,000 to the broader community.  That means for every dollar spent at the market, close to another $2 were generated locally.  The largest market they looked at had more than $40,000,000 in vendor sales, but the same multiplier effect was there.  But more important than the numbers, it shows that a good market works like an anchor store in a mall.  It brings people into an area with money and the desire to spend it.  This is a great thing for a local businesses and the community at large, even if they don’t shop at the farmers’ market themselves.  And, because the recipients of this money are local businesses and area farmers, chances are good that they will in turn spend much of it locally, setting up a virtuous cycle that keeps spending local.

But I think there is another huge aspect of the economic impact of farmers’ markets that was beyond the scope of this study.  Farmers’ markets can be a critical first step in bootstrapping a successful business.  A maker of cheese can get their start, get to know their customers, and hone their products and message at the market.  Participating in farmers’ markets has a much lower startup cost than opening a full-fledged retail store and it can combine nicely with online marketing and social media.  Many small vendors manage to find a number of markets in their region to participate in, which can allow them to get more experience and start to scale their sales with different customer groups.  Farmers’ markets can act as a kind of small retail business incubator for local businesses and this kind of opportunity can be critical to the early stage of many businesses, particularly value-added specialty foods.

Encouraging the successful growth of small businesses and thriving business ecosystems is a passion of mine.  It certainly relates to my job as a business attorney focused on intellectual property and the innovation that generates it, but it also gets to my fundamental belief in grassroots entrepreneurship as the best way for individuals and communities to help themselves.  Farmers’ markets can be a critical link in helping local businesses get their start.  And once an entrepreneur gets started, the sky is the limit.  Your favorite product at the farmers’ market this year could be on grocery store shelves next year and providing job growth and community development as it achieves national distribution the next.

About the Author
Devin Morgan is Co-founder and Of Counsel to Knull Group (www.eatdrinklaw.com), a firm for food-obsessed business and intellectual property lawyers in Cooperstown, NY.  He is focused on the growth of the craft food and beverage industry in New York State and is the primary author of the Eat. Drink. Law. blog.  Click here to receive a free report from Devin on growing a distinctive food or beverage business.  He is also a big fan of the Cooperstown Farmers’ Market.