1	Alternative and Niche Crops as Commercial Ventures Bill Jester Extension Associate, Horticulturist Department of Horticultural Science North Carolina State University
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3	Why Alternative “s”? No one crop will replace the impact of tobacco. Specialty Crops and value-added offer 1000’s of different possibility.
4	Why New Crops? 20,000 known edible plants in the world (Babb, EM 1990). Many of these grown in North Carolina. Smaller farms versus larger farms. Farm financial stress and the income potential. Consumers demand for new foods and products.
5	What is a Alternative Crop? An “Alternative crop” is a high-value niche market crop, or a crop not commonly produced in a particular region that can be produced for a profit in that region.
6	Niche Crop A crop satisfying a unique, specialized segment of the market.
7	Specialty Trends
8	What have we done to help farmers diversify into niche opportunities in NC ?
9	Specialty Crops Program
10	Specialty Crops Program The N.C. Specialty Crops Program was initiated in 1997 to identify and develop new crops and value-added products for the 13 county Global Transpark Zone. In 2001 the program went state-wide. “Market driven research” aimed at developing new products and markets for Eastern NC farmers.
11	Why? Growers and business persons identified this as an need. With declining tobacco and commodity prices there was a need for a formalized approach to diversification. Reduce the risk to the farmer.
12	"NCSU agricultural researchers" NCSU agricultural researchers. Cooperative Extension Service agricultural agents and specialists. NCDA marketing specialists.
13	Risk Management Strategy
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19	Field Days
20	"On-farm trials conducted while markets..." On-farm trials conducted while markets are developed and promotional materials are created. County agents trained. Growers educated.
21	On-Farm Test Marketing
22	Sampling & Survey
23	Comments from Consumer Surveys: Raleigh Farmer’s Market June 22, 2001 All look good Try to concentrate more on flavor than size Too large All very good-seem a little tangy The seeds are smaller than expected Rated as best: Kiowa: 30.3% Navaho 28.1% Chickasaw 24.7% Shawnee 16.9%
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25	I am not going to tell you what to plant, but I will give you some ideas of how to develop another crop based enterprise.
26	Characteristics of most new crops Reliable information not available Supply – demand information Cultural practices Market development required Risk is high Lack venture capital Difficult to measure potential (black hole effect)
27	Answer Key Questions prior to Jumping
28	Lets talk about Marketing
29	What is Marketing First, it is not just sales. Developing a demand for your product. Creating a image of your product. Developing distribution channels. Developing buyer confidence.
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31	Types of markets Commodities - futures,etc Nonperishable Crops Produce- Perishable Crops Direct Market Roadside U-Pick Types of Markets Terminal Retail Food Service
32	Roadside Markets
33	Direct Marketing to the Consumer Pluses Customer comes to you CASH Less outlay for postharvest Lower farm overhead Farmer receives a retail price Customer gets a field fresh product Potential for value –added great Tax advantages in many states
34	Direct Marketing to the Consumer Negatives Inadequate volume Location can be important Customers can be a source of frustration May not fit the farmer’s personality Liability potential great
35	U -Pick
36	Chain Stores, Food Service and Commercial Retailers Distribution system delivery; few DSD Grower never see end customer Postharvest handling important Volume and consistent supply necessary GAPS and GMP certified 30 to 60 day payoff
37	Terminal Market A central site that serves as an assembly and trading place for agricultural commodities. Terminal markets are usually at or near major transportation hubs.
38	Terminal Market
39	Retail Chain
40	Food Service
41	Restaurants and other innovators
42	Restaurants and chefs Often will take direct delivery Pay out of cash register Often the originators of new niche products
43	Niche Marketing “Niche” = French for nest. Targets a product or service to a small portion of a market not being served by the mainstream suppliers. It is the process of marketing a unique product or service to a specific group of customers
44	Niche Marketing Niche Marketing also includes analyzing the competition, positioning your product (finding your market niche), pricing your products and services, and promoting them through continued advertising, promotions, public relations and sales.
45	Agricultural Niche Marketing Small or moderate size businesses or farms that produce a specialty product or service for a limited segment of the market. Geographic areas A specialty industry Groups of people (ethnic,age etc) Variation of a common product
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47	Niches Crop àCommodity Many former niche crops have evolved into major commodities such as with Christmas trees, trellised tomatoes and native landscape plants.
48	Strategies Lets talk about specifics.
49	Strategies Add a specialties as a new crop to an existing business. Provide service to your customer, Agritourism Start a new business based around the new niche or service.
50	Answer key questions for each project
51	Issues for Growers Can it be grown? Markets and economics? Is it worth it? Resources? Business plan – will it work on paper? Motivation? Cultural issues? Unknowns?
52	Economics and Marketing of Alternatives or Niche Crops. Is it worth it? Does it require innovative packaging or presentation? The value of the product is in the eye of your consumer …know your customer. Consumer may demand a certain product but it may not be profitable to grow in certain areas of the state. Eg: cherries, pears, japanese persimmons. …or the volume may not justify the specialized investment. Eg: peaches. Profit is linked to marketing skills of the individual grower.
53	Business & Marketing Plan Components A general description of the venture Qualifications Reasons for starting the business
54	Business & Marketing Plan Components A market analysis—a statement Description of the product or service Estimated size of the market The segment of the market served market you expect to serve, and the geographic area served
55	Business & Marketing Plan Components Develop a marketing plan A description of the operational aspects of the business Projected sales and volumes
56	Business & Marketing Plan Components A financing plan A sensitivity or risk analysis Resources needed
57	Motivation? Do you have the energy and motivation ? Do you need to increase your income and your work?
58	Resources If you are broke you have no margin for error. Trying new crops is a high risk venture. You must be able to cope with a failure.
59	PROCESS OF Selection and Adoption - “A Prototype” Do initial marketing surveys..contact your potential buyers. Identify the specific market to be served. Consult all resources. Are your goals and the opportunity compatible? Look at innovative growers in other areas.
60	PROCESS OF Selection and Adoption - “A Prototype” Start small and develop a production system. Use your initial small scale production for test marketing and developing a business plan. This includes budgets, risk, potential returns and payback. Limit your risk. Survey your buyers and modify project component based on their feedback. You should give the enterprise time. Reevaluate after each year. If it hasn’t shown some progress after three seasons it probably isn’t for you.
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62	Some agricultural successes of the N.C. Specialty Crops Program.
63	Boniatos
64	Blackberry Cultivar Evaluation
65	On –Farm Successes Edamame Blackberries SGA Sprite Muskmelons and Honeydews Golden Beauty Japanese sweetpotato Yellow seedless Red seedless Lettuce
66	Southeast Growers Association Coop Established in fall of 1997. 12 grower executive board. Marketing umbrella – open to all growers. Several deals operate under the SGA umbrella. Cantaloupe, Seedless and Seeded Watermelon, Tomato and Lettuce. Buyers: 8 chains, 4 brokers, 2 coops and Dept of Defense. 1999: $1Million sales, 2004: $ 5 Million sales
67	Sprite Melon Entered the program in 1997 Not sold in this country Part of the melon screening trial Sprite melon well adapted to E NC Had eye appeal Had “legs” Excellent taste (16-18 Brix)
68	Sprite Melon Sprite 2000 first commercial test acreages. Returns: $45,000. In 2001, 12 growers with the Southeastern Growers Association (SGA) produced 40 acres of Sprite melon. Returns about $600,000. 2004 - 35 growers. $2.5 million in returns to the growers.
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74	Cantaloupes $27 million worth sold in 2004.
75	Honeydew melon Seminis (NC State) Average Wt: 2003: 4.9 lbs 2004: 6 lbs Number/A: 2003:14048 2004:10781 Brix: 2003: 13.1 2004: 13.3 Does not split, small seed cavity, uniform sizes
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77	Boniato and Oriental Type Sweetpotatoes
78	Yellow Seedless Watermelon $650,000 worth sold in 2004.
79	Red Seedless Watermelon $5 million worth sold in 2004.
80	Mini Seedless Watermelons
81	HA 6007 (Hazera)
82	Lettuce Lettuce Research started in 2000 Spring 2004: Romaine 125 acres grown in the East. 25 acres of head lettuce. Spring 2005: 78 acres Head Lettuce and Romaine – Processing and Fresh Market. Where does Dole fit?
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84	Romaine
85	2004 Blackberry Production Fifty per-cent increase in acres during the last 6 years. Four new growers made plantings in the last 2 years.
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87	Edamame
88	Southeast Growers Association Coop Established in fall of 1997. 12 grower executive board. Marketing umbrella – open to all growers. Several deals operate under the SGA umbrella. Cantaloupe, Seedless and Seeded Watermelon, Tomato and Lettuce. Buyers: 8 chains, 4 brokers, 2 coops and Dept of Defense. 1999: $1Million sales, 2004: $ 5 Million sales
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90	Other Specialty Crops Projects
91	Value-added Snapbeans Cooperated with growers in Hyde and Duplin Co. Developed a microwavable package Preliminary test marketing
92	2004 Cut Flowers
93	2005 Ethnic Vegetables Fastest growing market Difficult to penetrate. Hispanic and oriental vegetables are on the raise. Three new growers with 200 acres in 2004.
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95	Specialty Squash
96	2005 Hot Pepper Hot Peppers Potential industrial crop. Capsaicin oil used for many purposes.
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98	Specialty Tomatoes
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100	The question still remained, could medicinal herbs become a commodity crop in N.C. and could growers REALLY make money producing them? For 2004, obtained a grant to try to determine once and for all if N.C. growers can be competitive on the global market and produce the quality and quantity required and still make a profit. Provided 16 growers with $5000 to grow herbs on contract. Six buyers and a dedicated advisor.
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107	2004 Production and Sales
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110	"Present Capabilities" Present Capabilities Make use of existing tobacco raising equipment Rudimentary post-harvest equipment The basic needs of crops are satisfied ORGANIC Future Directions Use of suitable equipment to improve yields Improved post-harvest equipment for quality Greater use of ORGANIC thru holistic approach
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112	Image The Specialty Crops Program has increased the interest in and image of NC produce by attracting progressive buyers looking for new items.
113	"The possibilities are infinite" The possibilities are infinite.
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115	NC Tobacco Trust Fund Commission NCDA & CS Plant Industry Division Golden LEAF Foundation NC Rural Economic Development Center via the Land of Sky Regional Council