Market economics

Even at 3 p.m. on a Wednesday afternoon, Asheville’s tailgate markets are bustling. Over at the French Broad Food Co-op, a cellist is bowing a vaguely classical tune, Nicole DelCogliano of Green Toe Ground Farm can’t dice heirloom tomatoes samples as fast as shoppers can snatch them up, and Brian Moe of Viable Cultures is engaging a stream of customers in a conversation about kombucha.

Photo by Jonathan Welch

Like all local tailgate markets, the Wednesday market has the appearance of a thriving retail enterprise. But the hubbub only serves to obscure how little money tailgate market shoppers actually spend. While local-food advocates have conditioned eaters to “buy local,” they haven’t yet persuaded them to “splurge local.” Market insiders, who admit they still haven’t fully deciphered consumer behavior, fret that tailgate markets’ hard-earned reputation as friendly meet-and-greet spots flush with local color may ultimately spell trouble for their commercial success.

When I last visited the French Broad Tailgate Market, I was delighted to find a serrano pepper I needed for a tuna recipe. The pepper — my only purchase that day — set me back 10 cents. According to research conducted by the Appalachian Sustainable Agriculture Project, I probably wasn’t the only small-spender circulating the market’s booths: A full 15 percent of shoppers polled in 2003-2004 reported spending less than $5. The average expenditure was $14.18.

“The average customer at a mainline grocery store is spending a lot more than that,” says ASAP’s local food campaign program director Peter Marks. “I feel like it’s an issue I’m stumped on.”

Tailgate markets are starting to subtly toy with their structures to encourage shoppers to spend more freely. The French Broad market’s cellist, for example, was seated in her tent not just to up the market’s cultural quotient: The subliminal message conveyed by a musician is “Stay” and, perhaps, “Spend.”

“Now they’re all booking musical acts,” Marks says of markets across the region.

Local markets have experimented with chef demos and children’s activities as ways to prod shoppers into lingering just a little longer over the displays of beets and Swiss chard. Add-ons like the coffee truck which weekly pulls into Asheville City Market are also popular.

Still, Farmers Market Coalition Executive Director Stacy Miller warns that certain enticements can prove detrimental to markets. While Asheville’s markets are fairly rigorous in their enforcement of rules governing what can be sold and who can sell it, some markets in surrounding counties have traditionally been more lax, perhaps hoping the promise of crafts might lure garlic-scape shoppers.

“If a customer on a given Saturday has a certain amount of money to spend, you want to reduce options so they buy the spring onions instead of earrings or kettle korn or whatever,” Miller says.

But the limited scope of admirably focused markets may inhibit shoppers from using tailgate markets as their primary grocery store. Although the recent addition of numerous meat and egg vendors to Asheville’s markets has helped shoppers cross more items off their lists without stepping inside a supermarket, the ban on products made elsewhere means customers seeking sugar, paprika, out-of-season strawberries, light bulbs and toothpaste will remain reliant on mainstream groceries —where they’re likely to pick up basil, beans and other necessities readily available at market.

Marks is wary of selling staples at tailgate markets, since he suspects that no local vendor could possibly compete with mammoth-sized chains on cost.

“Produce and honey are priced competitively at the market,” Marks says. “It might reinforce the idea that markets are so expensive if little vendors who don’t have the scale of Safeway get into commodity items.”

Some markets have countered the “where’s the salt?” argument by positioning themselves in the parking lots of major supermarkets. While participating farmers sacrifice a fair bit of ambiance, Miller says that a market in her home state of West Virginia has flourished since taking up residence outside WalMart. “Those kind of relationships can be forged,” she says. The big box store serves as a sort of public market, much as Asheville’s Grove Arcade once did.

Roger Hanagriff, agribusiness professor at Texas A&M University in Kingsville, would extend Miller’s reasoning further still. He advocates putting farmers’ markets inside groceries, with vendors giving the store a percentage of their sales.

“If you could get a partnership, you’d have a win/win situation,” he says.

Even without officially joining forces, some tailgate marketers believe they could boost their sales by borrowing supermarket conveniences like the shopping cart.

There isn’t adequate storage space at most markets to house carts, which means most shoppers can only buy as much as they can lug in their tote bags or wheeled baskets. Intermittent tailgate market shoppers usually don’t bring any bags at all, so they’re typically stuck carrying their purchases in timeworn plastic grocery bags fished out of a vendor’s pick-up truck. While shopping carts would solve the physical challenge of purchasing a week’s worth of food at market, there’s a mental obstacle that Marks thinks is harder to surmount. At a grocery store, customers can blithely ignore the price tags on the items they dump into their carts, so a $3 box of fruit roll-ups and a $4 bag of potato chips blend seamlessly into their overall tally by the time they reach the check-out counter. That’s not the case at tailgate markets, where shoppers are reminded of how much they’re spending at every booth. In the minds of consumers, who have to repeatedly reach into their wallets, $2 plus $2 plus $2 feels like more than $6.

“The psychological barrier is paying for each item as you go,” Marks says. “People are very conscious of what they’re spending.”

Miller contends that vendors can at least partially address the problem of piecemeal purchasing by bundling their products. She gives the example of “salsa mix ” — a basket of tomatoes, garlic and cilantro sold for a single price. The advent of credit cards at tailgate markets may also nudge shoppers away from counting their cash. The Asheville City Market, Madison County Farmers and Artisans Market and the Yancey County Farmers Market this year began accepting credit, debit and EBT cards. With a swipe of their card, shoppers can now obtain cash-value tokens that most — although not all — market vendors accept.

Hanagriff applauds the advent of credit-card programs for yet another reason. As a researcher, his studies are often stymied by farmers’ informal record keeping. “It’s just cash in an envelope,” he grumbles. “We can’t track sales.” Without knowing how much consumers are inclined to spend on which items, it’s hard for economists like him to issue valid recommendations for vendors wishing to increase their weekly take. Nobody really knows whether having a cheese vendor situated near the front of a market inspires shoppers to buy more bread, or if a consistent supply of radishes helps transform sometime market-goers into diehard loyalists.

Local market managers have cobbled together a few guidelines for maximizing profitability, including situating vendors in the same booth week after week, scattering well-known vendors throughout the market and urging farmers to create aesthetically pleasing displays and interact with customers. Since many farmers aren’t naturally talented salespeople, Cornell University has developed a DVD for vendors featuring do’s and don’t’s of dealing with the public. The video dramatically illustrates the perils of breaking away from a transaction to greet a fellow farmer.

But even a vendor who’s mastered the nuances of customer services is unlikely to persuade shoppers to lay out four or five times the amount they’re accustomed to spending. That’s why Marks says it’s incumbent upon shoppers to change their mindset.

“Take the average amount you spend at the supermarket and challenge yourself to spend that much at the tailgate market,” he says. “Make that shift from thinking of the tailgate market as a fun place where you can spend a couple of bucks.”

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2 thoughts on “Market economics

  1. Stacy Miller

    Nice article on an important topic. Many markets have found success in a balanced mix of locally grown food and other complementary goods. But it does require some dedication to the mission of supporting local farmers (and very clear policies about what can be sold) such that, over-time, the market doesn’t transform from a farmers market to a craft show or flea market.

  2. Piffy!

    Educating the consumer about Real Cost is a big part. In my experience, many shoppers are very receptive to a bit of knowledge about where their money goes at the farmer’s market vs the super market.

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