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Finding Their Niche

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With the help of OSU researchers, Oregon growers are finding new markets for specialty products.

It was a meal that would make most epicures swoon. The fresh gourmet greens, baby vegetables and local artisan cheeses, free-range chicken, wild salmon, and fine wine were all provided by some of Oregon’s best producers and prepared by some of Portland’s hottest chefs. Now everyone was savoring the last of their sumptuous lunch.

The 3rd annual Farmer–Chef Connection was in session. Each year, Ecotrust and the Portland chapter of the Chef’s Collaborative bring together regional growers and chefs to build bridges between Oregon’s rural and urban communities.

As lunch ended, Larry Lev, an OSU agricultural economist, stepped up to the podium. He knew better than to lecture about niche markets to a bunch of full bellies. Instead, he made a request of all the chefs in the room.

“Chefs, please line up along the far wall of the dining room, with your restaurant’s menu in hand. Farmers, please stay seated.”

Across tables still scattered with coffee cups and crumpled napkins, chefs and farmers eyed each other awkwardly (think back to your last 8th grade dance).

“Farmers, now get up,” commanded Lev. “Each of you go over and choose a ‘date’ from the line of chefs.”

Instantly, the room came to life. More than 100 people settled into pairs, animated and chatty, as chefs and growers tested their compatibility.

Lev was harnessing a technique from the 21st-century singles scene called “speed-dating,” a modern and efficient way to increase the odds of making connections. Chefs described the dishes they cooked and their philosophies on food, as they placed their menus in front of the growers. And growers talked excitedly about the heirloom vegetables, handmade cheeses, and fine berries that they could offer the chefs.

Ten minutes later, Lev rang a bell and instructed the “dates” to shake hands and move on to the next.

“Contrary to what you might expect, exchanging information and making connections can be more complicated and time-consuming in a locally based food system than in a mass market system,” said Lev. “When I read about speed-dating, I thought, why not use the technique to create networks for niche markets at conferences and workshops?”

Men and women sitting across from each other at tables. Man wearing baseball cap talking to a woman.

“Speed-dating” growers and chefs make connections that will boost business. Photo: Samuel Beebe, Ecotrust

 

OSU’s Garry Stephenson interviews buyers at a local farmers’ market. Photo: Bob Rost

Speed-dating is just one technique Lev and his colleagues use to help Oregon producers find their niche. Niche agriculture is customer-driven, quite different from the dominant supply-driven commodity agriculture, explained Lev.

“Most American products, including agricultural products, are marketed by what I call ‘the Wal-Mart model’—mass quantities of product of okay quality, sold at a low price,” he said. “According to that model, a farmer plants a crop and harvests and sells that crop to a processor or middleman at whatever price the market sets.”

In contrast, niche market growers may produce for a narrower group of customers, usually garnering a higher price.

Are niche markets helping some of Oregon’s growers and producers stay in business?

To Dan McGrath, chair of the Linn County office of the OSU Extension Service, Oregon growers’ diversification into niche markets has to go beyond local and regional, to global.

“When we think ‘niche market,’ we need to think on several scales—local, regional, national, and global,” said McGrath. “Local or even regional niche markets will not keep agriculture healthy in the Willamette Basin. We need a diverse, multiscale strategy that complements and goes beyond local-direct.

“For example, the market for certified organic broccoli pureed for baby food is small regionally,” said McGrath. “But, on a worldwide basis, the niche is plenty big to keep Willamette family farms hopping. Global niche markets will support midsized family farms, say 300 to 3,000 acres, who produce fruits and vegetables processed by midsized processing companies. Most of the acreage in the basin that is under cultivation is farmed by midsized farms.”

Man and woman standing at a table full of potted plants. Two women in cheese factory, turning over large rounds of cheese.

OSU agricultural economist Larry Lev discusses marketing with a local grower. Photo: Bob Rost

 

Cheese makers Connie Collins (front) and Teresa Elkins, of Oregon Gourmet Cheese in Albany, wash and rotate hundreds of 5-pound rounds of “Sublimity” cheese, a weekly task for several months as the cheese develops its subtle flavors. Photo: Lynn Ketchum

McGrath also sees some farmers trying to work at more than one scale by starting small niche enterprises such as farm stands. For example, a farmer still might grow row crops, but might also sell jelly and jams at a farm stand. Or, a grass seed grower might add a little flower seed or plant nursery on the premises.

By definition, niche markets will never make up a majority of the market. But they can make all the difference for those producers willing to try something new.

“A certain percentage of the people want something different and will pay more for food if it means higher quality and more of a relationship with what sustains them,” said Lev. “They may be interested in this for health reasons, for sustainability reasons, or for some stronger connection with what they consume. Those are the customers that buy niche market products.”

And a certain percentage of agricultural producers are willing to try something new as well. Those that are thriving in niche agriculture must be willing to study what the customer wants, be risk-tolerant, and be constantly innovating, explained Bill Boggess, professor and department head of agricultural and resource economics at OSU.

“Those niche growers and producers who succeed have worked hard to learn what the consumer wants,” said Boggess. “They have developed strong relationships with their customers, and they aren’t trying to compete with lowest-cost producers.”

Rows of bottled wine at a winery. Man and woman filling orders at a herb store.

Jennifer Ribais and Caroline Freeman label a new vintage at Tyee Wine Cellars in Corvallis. Photo: Peg Herring

 

Rolfe and Janet Hagen fill mail orders at their Thyme Garden Herb Company in Alsea, Oregon. Photo: Lynn Ketchum

Niche markets aren’t always “mom and pop” small. Some of the successful niche agricultural enterprises in Oregon are multimillion dollar operations with niche markets overseas. For example, “Oregon Country Beef” specializes in premium beef raised in an environmentally sound manner and sold around the world. Stahlbush Island Farms, on 2,200 acres near Corvallis, uses the latest technology to grow and process high-end, sustainably raised vegetables, fruits, and grains. Then there’s megasized Harry and David’s mail-order gift enterprise, selling premium Oregon tree fruits around the world.

At any scale, growers and agricultural producers who want to pursue niche markets face new challenges.

“Niche producers have to fine-tune how they grow, what they sell and whom they sell to,” said Lev. “The products and prices for niche markets are consumer-driven. A niche producer has to adapt or perish.”

The Oregon wine industry is a good example of successful niche marketing of an Oregon agricultural product.

“Some people prefer to drink wines from Oregon and will pay more for that experience, because they want a premium product from close to home,” said Lev. “Some people like to go to the wineries and buy there, even though it might not be cheaper. They like supporting local farmers and knowing where their wine comes from.”

Researchers from OSU’s Agricultural Experiment Station and Extension Service share expertise with a host of new niche agricultural enterprises across the state. Here are a few examples.

Oregon Coast Range farmers have organized a public tour of 24 small working farms. With support from OSU Extension small farms specialist Garry Stephenson and a sustainable agriculture grant from the USDA, the “Family Farms of the Coast Range” project has produced a brochure and accompanying map that invites people to explore rural life from Philomath to Newport to Yachats. These “Family Farms of the Coast Range” offer locally produced products including wool, honey, pottery, meat, produce, handmade soaps and foods, local crafts, and perhaps even an overnight stay on a farm. Response has been strong, and many more farms are interested in being on the tour for the next edition of the map and brochure, says Stephenson.

In another example, OSU Klamath Experiment Station and Extension faculty are working with Klamath Basin potato growers to develop new varieties of potatoes for premium upscale markets. Five-star restaurants in California’s Bay Area are showing interest. Growers can earn up to 10 times more per pound for niche market potatoes than conventional russet varieties. If the market doesn’t become saturated, growers have the potential to earn more money on less acreage, says Klamath Station researcher Brian Charleton.

Lisbeth Goddik, an OSU Extension dairy specialist, is nurturing an artisan cheese renaissance with small dairies around the state. A few years back, there were few, if any, farmstead artisan cheese makers in Oregon. Cheese-making had consolidated into large-scale production. But for the past few years, Goddik has been getting more and more calls from small-scale cheese makers. She is working to create an association to promote Oregon specialty dairy products, including artisan cheese and other premium products such as crème fraiche.

“Artisan cheese makers can earn a lot more money per pound for their milk if they make it into cheese on the farm, rather than sell milk to a co-op,” said Goddik. “Plus, having artisan cheese makers in Oregon can improve the entire Oregon cheese industry by improving the image of Oregon’s cheeses as a whole.”

More innovations are coming from OSU’s Mid-Columbia Agricultural Research and Extension Center in Hood River, where researchers are working with cherry growers to develop higher yields, bigger fruit, and longer storage life.

“Through modified atmosphere packaging, Oregon growers can now ship cherries overseas. They’re developing premium niche markets in Europe and the Far East, where Oregon cherries command high prices,” explained Clark Seavert, superintendent of the Hood River research center.

Niche markets are not a panacea for all of Oregon agriculture’s woes, which include low prices for commodity products and fierce competition from overseas producers. But niche agriculture can allow a small percentage of growers to stay in business, and maybe some will thrive, said Lev. And he thinks that niche markets may help protect and preserve farmland into the future, especially in agricultural areas near cities.

“I hope this new diversification works, because if the family farm collapses in the Willamette Valley, then we’ll look just like Silicon Valley,’’ said McGrath.

“We are one of the few places in the United States where the number of farms is increasing slightly, and the average farm size is tending to be slightly smaller. I’d like to think niche agriculture is playing a part in that trend,” said Lev.

To learn more, visit:

Extension Food Science and Technology

OSU’s Food Innovation Center

Published in: Food Systems, Economics