We picture them on the sides of roads and highways. We might think of a fruit stand, for example, or maybe we remember a hand-painted sign pointing to a U-pick farm. They’re what we think of when someone says “direct marketing” because they’re the more time-tested ways farmers have bypassed middlemen and retailers to sell their agricultural products straight to consumers.

ReadAlso

“The first thing we do is lay out the communication strategy,” Lisa Jenereaux (standing on tractor) says.  “We sit down and agree on the types of meetings we need to have, who needs to be at those meetings, and how long they should be.”

A plan for successful farm meetings

The story gets repeated time and again. A farm family invests time and money in a professional farm advisor to…

It all sounds so very quaint, alright as a sideline for a hobby farmer or a way for the kids to pay for school. But nothing a real farmer would touch.

But that was then. It certainly isn’t now.

Statistics Canada reports that 13.6 per cent of farms across the country — or a total of 25,917 farms — had direct sales in 2020, up from 12.7 per cent, or 24,510, in 2015.

That’s roughly one farm in seven. More striking though, is the scale of some of those operations. Going direct has become serious business.

“Direct-to-consumer sales can be an attractive option,” says Connie Osborne, a media relations specialist with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). The farm’s costs go up because marketing is more expensive, but the payoff is that margins go up too because the output is being sold further down the value chain.

Direct deliveries

Farmers have long found ways to draw in hip urban crowds looking to source fresh food through options like farmers’ markets, on-farm stores, farm-gate sales, community-supported agriculture and direct deliveries.

The latter, in particular, has surged thanks to COVID-19, with farmers adapting new ways to identify and connect with customers.

In response to pandemic contact restrictions, 13,006 farms were direct delivering to consumers in 2020, compared to the 15,647 combined that had on-site farm stores, stands, kiosks, U-pick or farm-gate sales, according to Statistics Canada.

Ontario leads the pack

No province had more farms reporting direct sales that year than Ontario, with 7,697 selling some type of farm commodity directly to consumers. That was up 3 per cent from the previous census. Ontario also reported strong direct marketing relative to other provinces, following only Newfoundland/Labrador, British Columbia and Quebec with 15.9 per cent of its farms doing at least some direct sales.

Ontario topped all others in the number of vegetable and melon farms with 1,562. In fact, StatsCan say this farm category was most likely to report direct sales: in 2020, 52.2 per cent of farms in Canada that produced vegetables and/or melons also reported direct sales, up from 50.2 per cent in 2015.

“Direct-to-consumer sales is a growing opportunity for Ontario farmers,” says OMAFRA’s Osborne.

Almost all direct marketing farms in Ontario sold unprocessed products, and about 13 per cent also sold value-added processed products, he says.

“Roughly 43 per cent of these farms delivered products directly to the consumer, while about 69 per cent sold product directly to the consumer through on-farm facilities,” added Osborne.

Citing a survey by Foodland Ontario, the province’s consumer promotion program, Osborne says Ontarians are becoming increasingly aware of the source of the products they purchase, but they’re motivated by more than just local: 85 per cent of respondents said they were more likely to buy locally if they know it is benefiting local farmers.

The BC value question

BC’s high proportion of direct marketing — a third of its farms, approximately 5,300, report direct sales — can partly be explained by the province’s lead in some key demographics, including the highest proportion of farms with operating revenue under $10,000 at 33.75 per cent.

What’s key there is that direct sales make up a bigger part of revenue for smaller farms overall. In 2020, farms with less than $10,000 in sales accounted for nearly half (47.9 per cent) of farms in which direct sales represented over three-quarters of total farm operating revenues, StatsCan reported. (Farms with $2 million or more in sales accounted for only 0.8 per cent of farms in which direct sales represented more than three-quarters of total revenues.)

StatsCan’s ag census reported additional key demographics: BC also had the most fruit and tree nut farms at 3,036, and the third most vegetable and melon farms with 1,077.

Also important to BC’s direct sales sector is how consumers there view local food.

BC Agriculture Council (BCAC) research for 2021 surveyed 831 residents and found that 67 per cent cited food grown/raised in BC as an issue of importance that had an impact on their purchasing decisions.

Organic foods also provided a boost to BC’s direct sales. According to a September 2022 analysis from Organic BC, 39 per cent of organic consumers chose direct-to-consumer channels like farmers markets, community-supported agriculture, and farm stands for their grocery shopping.

Provincial government support was another contributor. The provincial government partnered with the BC Association of Farmers’ Markets to help direct farms pivot to online sales during the pandemic. Over 70 farmers markets launched an online virtual store in 2020, generating over $2.5 million in sales, with an additional $1.4 million in 2021.

Prairies

With their low population density, the Canadian Prairies lag behind the leaders in direct marketing, although Alberta might surprise a few with its number of farms reporting direct sales rising a quarter from the previous census to 2,608.

“I do know anecdotally from talking to different producers and small-scale processors here that demand during COVID really, really escalated,” says Mary Beckie, a professor at the University of Alberta’s School of Public Health. “Farmers and processors had to diversify their marketing platforms really quickly, so now we see a lot more marketing online, and I think that’s really boosted sales.”

Manitoba led the Prairie provinces in the proportion of farms reporting direct sales with 6.9 per cent (up from 6.1 per cent), but the actual number of farms was lowest among the three at 1.013, an increase of 113.

Manitoba Agriculture reported that the province’s proportion, less than half the national one, could be attributed to its large number of oilseed and grain farms. Only 1.7 per cent of oilseed and grain farms in Manitoba reported direct sales in 2020, a lower rate than any other farm type.

Most direct sales in Manitoba were related to “unprocessed” foods, which included fruits, vegetables, meat cuts, poultry, eggs, maple syrup and honey, Manitoba Agriculture said.

The focus on grain and oilseed production explanation also applies to Saskatchewan, Canada’s breadbasket, which had a mere 4.1 per cent of farms reporting direct sales. Still, that was a rise from 3.8 per cent in the last census, with the number of farms climbing by 104 to 1,400.


Outlook for 2023

While the direct sector is growing, the outlook for this summer isn’t as sunny.

Food inflation topping five per cent and worries about a global recession mean consumers are more price conscious.

“Consumers will continue to look for ways to save money on groceries, such as by purchasing in bulk, using coupons or buying store brands,” says Sylvain Charlebois, Dalhousie University’s Agri-Food Analytics Lab project lead and director.

“Food shoppers are very price sensitive,” agrees David Connell, a professor at the University of Northern British Columbia’s department of ecosystem science and management. “The average food shopper in Western society has a very strong penchant for ‘cheap food’ and for minimizing the proportion of the household budget spent on food; they are willing to compromise on food quality for a lower price.”

Some experts are more upbeat, however. The U of A’s Mary Beckie thinks the relationships that developed between farmers and their customers during the pandemic could have some lasting power.

Beckie also points to Feed BC’s success in developing partnerships to connect local food to local public buyers, such as health care facilities and post-secondary institutions.

Connell does expect direct sales to increase, too, partly because the superior quality of local fresh food ties in with consumers’ health focus.

Also supporting the sector is the perception that the world is more vulnerable to disruptions of the global agri-food network.

However, disruptions in the food supply chain aren’t necessarily good news for local either, says Charlebois, since weather fears make consumers feel they need a broad-based supply to be secure.

Charlebois sees other challenges looming too. Biggest may be the consumer perception that direct-marketed food is more expensive. Sometimes, that perception is justified. Direct-market prices may reflect superior quality, choice or convenience. Often, though, direct is price-competitive.

Direct marketing also faces more competition from large retail chains and supermarkets, Charlebois says. “(They) are increasingly looking to source products from small-scale farmers,” which sounds like good news for the sector, but it makes life tougher for those outside the chain-store loop.