Special Features

Economic Impact of Agriculture Studies (University of Guelph)

Farmer’s Markets feature a variety of goods. The type and amount of products purchased by customers at the Market, are in part determined by the type of goods that vendors provide. For example, some markets feature meat products, fish and dairy products while others do not. These differences are reflected in the following graphs which illustrate the types of products that customers purchase at Markets.

Vegetables are clearly the most commonly purchased item at the market. As indicated in Graph 4.23, over 80% of Market customers purchase vegetables. Fruits are the next most popular market item. On average over 55% of customers purchase fruit while visiting the market (see Graph 4.24).

Baked goods are another very popular item at Farmers= Markets. Close to 40% of customers purchase baked goods while visiting the Market (Graph 4.25). Baked goods along with fruits and vegetables, are typically sold at every Farmers= Market.

Honey and maple syrup products are commonly featured at Farmers= Markets and in many cases the vendor is a local producer (Graph 4.32 and 4.33). Interestingly, jams and preserves appear to be more popular with customers in seasonal Markets than in year round Markets (Graph 4.34).

The survey revealed that on a provincial average, customers spend approximately $20 per visit to the Farmers= Market. The lowest Market average was just over $10 per Market visit and the highest was just over $30 per Market visit. In twelve of the Markets, the average amount spent by customers was over $15 per visit and in eight of the Markets the average amount spent by customers was over $20 per visit. Interestingly, neither the year round Markets nor the seasonal Markets displayed a consistency in the amount spent by customers (Graph 4.35). There appears to be as much variation within both the year round and the seasonal Market categories as there is between the year round and seasonal Market categories. Thus we note that although the Cambridge Farmers= Market recorded the highest level of customer spending, many seasonal Markets recorded impressive values as well (Burlington, Carp, Fort Francis, Milton, Sudbury). One notable difference between the Markets is that the customers who frequented Markets in small towns or villages tended, on average, tended to spend less than customers who frequented Markets situated in or near large urban centres.

Farmers= Markets have a significant economic impact on the local economy. Using the data collected from customers, the researchers were able to generate estimates of the total annual sales in each participating Market. The figures are presented in Graph 4.37.

All of the year round Markets (Brantford, Ottawa-By Ward, Cambridge, Hamilton) recorded annual sales figures in excess of $1.5 million. Three of these Markets (Brantford, Ottawa - By Ward, Hamilton) had annual sales of $3 million or more. Ottawa - By Ward had the highest annual sales value at $50 million and St. Marys had the lowest at $112,000. It is worth noting that several seasonal Markets also exceeded the $1 million annual sales level or came close to the measure (Sudbury, Ottawa-Parkdale, Burlington, Milton). The combined annual sales for the 19 Farmers= Markets amounts to approximately $73 million.

In most instances, the Farmers= Markets that had annual sales under $500,000 were:

However, it was in the smaller Markets that customers typically attached a greater value to the Farmers= Market in terms of the way it provided the community with a place to socialize and how it served to reinforce a sense of community identity.

With respect to the influence of the Farmers= Market on the economy outside of the Market, the research clearly demonstrates that Farmers= Markets generate economic benefits across the community. Many of the businesses we spoke with acknowledged that the presence of the Market stimulates additional sales for neighbouring businesses and although we are unable to quantify this, it is important to emphasize that close to 50% of customers stop to shop at various businesses on their way to or from the Farmers= Market.

Additionally, multipliers associated with agriculture and other special events like agricultural fairs, suggest that for every dollar spent in the Market, another two dollars ripple through the provincial economy. These dollars may be spent by the businesses that supply the farmers that sell goods in the Market, the purchases of retail goods and services by employees in the Market and by customers who stop to make other purchases while on a trip to the Market. Thus, the annual sales figure for a Farmers= Market can be doubled to give an indication of the amount of dollars generated outside the Market. Graph 4.38 illustrates the estimated multiplier effect for each Market in the study.

Graph 4.38 Estimated dollars generated outside the Market.

Recognizing that the survey accounts for 19 of 127 Farmers= Markets in Ontario, and that these 19 Markets generated $73 million in annual sales, we estimate that the true level of sales for all Markets in the province amounts to close to $500 million. This leads to a total economic impact of approximately $1.5 billion in Ontario.

Graph 4.39 Estimated number of jobs at the Markets.

Provincially, we estimate that on an average summer Market week, approximately 8,000 people are involved in sales and related tasks at Farmers= Markets across the province. This would suggest that a total of 24,000 people are directly and indirectly involved in preparing and selling the goods we find in Farmers= Markets.

Vendors recognize that farmers= Markets are an important retail outlet for local production and that they also serve an important social function. Many vendors are producers and the local Farmers= Market enables them to earn an income by supplying the local population with fresh produce. Indeed, in smaller Markets the great majority of vendors sell their own goods. Additionally, vendors clearly recognize the value of the Market in its ability to generate farm gate sales.

Vendors associate a number of other benefits with Farmers= Markets that extend beyond the direct economic benefits they offer. Many vendors believe that the Market serves an important social function in that it offers a venue for community members to socialize and stay in touch. Indeed, vendors themselves often commented on how much they enjoyed interacting with friendly and loyal customers.

Vendors relayed a number of challenges and issues that face Markets. A common concern raised by vendors is that a high percentage of the customer base at Farmers= Markets, is made up of senior citizens. Vendors question how long the Market will survive if steps are not taken to attract different age groups to the Market. Vendors would like to see Market administrators adopting more aggressive promotional campaigns that focus on attracting younger age groups to the Market.

Another challenge faced by Markets is attracting and maintaining vendors. Some Markets are having a difficult time retaining their vendors as other Farmers= Markets expand into additional days through the week. Vendors that have traditionally worked in two separate Markets on two separate days, feel compelled to choose one Market over the other when one of the Markets expands to a second day. From the vendors’ viewpoint, either additional staff must be taken on to handle

the one day Market or the one day Market must be abandoned altogether to avoid losing customers in the two day Market. This effect can be particularly harmful on a small Farmers= Market where the loss of even two or three vendors can produce the appearance of a Market in decline. As mentioned earlier, word of mouth is one of the most important forms of advertising for the Market. Once customers have gained the impression that the Market is in decline, it becomes a struggle to reverse the notion in the community and the customer base may begin to shrink over time.

This problem may become even more pronounced as more communities attempt to establish their own farmers= Market as a means of stimulating local economic activity and bringing in tourist dollars. Market administrators will have to communicate more regularly with vendors to ensure that they remain committed to the Market from year to year and throughout the season.

Vendors themselves are aware that the Ahealth@ of the Market is closely associated with the level of commitment shown by its vendors. They recognize the importance of attending the Market on a regular basis. Again, this view was more strongly expressed in small Markets where the absence of one or two vendors can make the Market appear noticeably vacant. As emphasized throughout this report, Farmers= Markets derive the bulk of their customers from the local community and any negative impression gained by customers can quickly spread by word of mouth to undermine the popularity of the Market. Thus, it is crucial for Market administrators to create conditions in the Market that will capture the loyalty of the vendors.

One method of acquiring this loyalty is by inviting vendors to join the board of directors or other Market governing bodies. A number of Markets in Ontario are presently being managed by administrative bodies that have vendor representation. However, some vendors suggested that these positions should be filled by >local producers= who are sufficiently experienced to represent the interests of producers. This interest clearly compliments the desire shown by customers to support local growers. Having additional grower representation on the board would demonstrate

In larger Farmers= Markets, it is not uncommon for the Market to have a combination of producer and wholesaler agents. Market producers may work together through one agent and in some instances vendors offer goods that have been sourced through wholesalers. Purchasing from wholesalers is particularly the case when out of season produce is sought by customers who may not appreciate the constraints the Ontario climate places on producers.

The researchers interviewed over 100 businesses operating near Farmers= Markets in order to gain a fuller understanding of the economic and social impact that Farmers’ Markets have on the local community.

In general, businesses view Farmers= Markets as attractions that are very community oriented. Furthermore, businesses acknowledge that Market days generate considerably more customer traffic than non-Market days and many businesses indicated that they witnessed an increase in sales activity on Market days during Market hours. These effects appear to be more intense where businesses are located in close proximity to the Market.

Farmers= Markets are very community oriented. The great majority of customers (80%+) are only ten minutes or less from "their" local market. This travel time indicates that people live close to or work close to the Market they shop in.

For many customers, the trip to the Market is part of their weekly routine and it represents the focal point of their day. This was particularly evident in the smaller Markets that operate only one or two days during the week. At these types of Markets, customers frequently regard the trip to the Market as a special event and they warn against any plans to expand the Market to other days during the week. In smaller Markets, customers tended to feel that increasing the number of Market days would spoil the atmosphere of the Market and make it less of a special occasion, thus undermining the appeal of the Farmers= Market.

Customers pointed out that Farmers= Markets represents an excellent alternative to mainstream supermarket shopping with a friendly, relaxed atmosphere that can not be duplicated anywhere else. Customers suggested that this feature, along with the cultural and historical features of Farmers= Markets, should be more widely emphasized in promoting Markets as tourist attractions.

associate the outdoor aspect of the Market with freshness. Indeed, the outdoor setting of the Farmers= Market is a distinct feature that sets it apart from the mainstream supermarket experience. Markets that are looking to relocate indoors or develop permanent indoor sites should keep this factor in mind and attempt to incorporate an outdoor element to the Market. Most of the customers have been visiting >their= Market for many years and during the study it was noted that although customers are receptive to sheltered facilities, they do not wish to see >their= Market become entirely enclosed.

Farmers= Markets in Ontario have a long history that dates back to 1780 when the first Market was established in Kingston. Over time, markets grew in number with the expansion of the settlement frontier in Ontario. Farmers= Markets continued to be a popular shopping venue up until the 1970s when consumers began travelling to shopping malls and avoided the downtown shopping area.

In Ontario, a resurgence of Farmers= Markets began in the late 1980s through initiatives by the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). In early 1991, OMAFRA acted to provide Farmers= Markets with moral and financial assistance through the creation of Farmers= Markets Ontario, the provincial association of Ontario=s Farmers= Markets. The resurgence is also associated with the desire of community residents to preserve a shopping experience that is closely

connected with the food producer and more personal in its character. In recent years, new Markets have been established, older markets revitalized and a new customer base has been introduced to the Farmers= Market experience.

As the Markets reestablished and broadened their role, there was an expressed desire to measure the community and economic impact of the Markets. In 1998, a financial commitment from Farmers= Markets Ontario, the Canadian Agricultural Adaptation Council and 19 Farmers= Markets across the province, laid the foundation for a provincial study of Farmers Markets. The School of Rural Planning and Development at the University of Guelph was selected to carry out the research on behalf of Farmers= Markets Ontario. The objective of the study was to measure the economic impact of Farmers= Markets in terms of the value of sales and the number of jobs associated with Market activity. The study was also concerned with measuring the community impact of Markets in terms of the Asoft@ benefits that Markets provide to community members.

The 19 participating Markets were selected from the Farmers= Market Ontario Directory. They represent a cross section of the variation in Markets that exists across the province. Data was collected from five sources: Market customers, Market vendors, local business owners, Market mangers and personal observation. Field coordinators from the University of Guelph were responsible for recording personal observations and collecting data from the vendors, local business owners and Market managers. Volunteers and/or municipal employees from each of the 19 Market areas were trained by the field coordinators to administer the customer questionnaires at the Market.

Farmers= Market shopping experience apart from the less personal supermarket experience. Interestingly, it appears as though customers at seasonal Markets hold a greater value in the social aspects of the Market than do customers at year round Markets.

The number one attraction at Farmers= Markets however, is the fresh produce. Provincially, over 90% of Market customers are attracted by the fresh produce. Additionally, customers consistently indicated a strong preference for purchasing products from local producers. Again, over 90% of customers attached importance to supporting local growers. Customers displayed a high level of loyalty to specific vendors. Sixty-five percent of customers routinely purchase their goods from the same vendor during each visit to the Market.

Customers are generally very satisfied with >their= Markets. Approximately 73% of customers are very satisfied with the quality of produce at Farmers= Markets whereas approximately 58% are very satisfied with the variety of produce. The greatest area in need of improvement are the Market facilities, where only 42% of respondents are very satisfied with existing facilities such as parking, washrooms and seating areas. Customers are particularly sensitive to the cleanliness of washrooms.

Market while 22% of customers spend more than $25 per visit to the Market. The combined annual sales for the 19 Farmers= Markets amounts to $73 million.

The research revealed that Farmers= Markets have a significant economic impact on the local economy. Many local businesses operating near the Market indicated that the Market was beneficial in drawing people into the area and some business owners attributed a portion of their sales to the spillover effect of the Market. Indeed, the research found that close to 50% of Market customers stop at neighbouring businesses to make other purchases while travelling to or from the market. Interestingly, some business owners continue to hold the view that Market customers do not make purchases beyond the Market. Markets need to take an active role in dispelling this notion and promote the Market as a social and economic asset that provides benefits across the community.

Multipliers associated with agriculture and other special events like agricultural fairs, suggest that for every dollar spent in the Market, another two dollars ripple through the wider economy. Recognizing that the survey accounts for 19 of 127 Farmers= Markets in Ontario, and that these 19 Markets generated $73 million in annual sales, we estimate that the true level of sales for all Markets in the province amounts to approximately $500 million. This leads to a total economic impact of approximately $1.5 billion in Ontario.

With respect to jobs, we estimate that on an average summer Market week, approximately 8,000 people are involved in sales and related tasks at Farmers= Markets across the province. Normal multipliers would suggest that for every working person in the Market, there are approximately two persons involved away from the Market. This would suggest that a total of 24,000 people are directly involved in preparing and selling the goods we find in Farmers= Markets.

However, vendors also expressed a number of concerns. A fairly contentious issue is the presence of wholesalers at the Market. Vendors who are producers question the legitimacy of Farmers= Markets that allow wholesalers to set up alongside producers. Producers would like to see Markets adopt policies that would restrict the number of wholesalers at the Market, especially when local produce comes into season. Producers would also like to be assured of representation on the Market management team. Some Markets presently allow for this representation but others continue to be managed without direct producer involvement.