Over a quarter of Vermont farms (1,833) sell directly to consumers through farmers markets, Community Supported Agriculture (CSA), and other “direct market” channels.1 Direct markets are critical because they allow producers to capture more income for each product sold (compared to wholesale), require low up-front investment, give producers more autonomy over the products they sell, and foster customer relationships through experiential marketing (an increasingly important tactic across all industries). The trends towards consolidation and downward price pressure in wholesale markets favor larger producers and create challenges for many small to medium-scale producers, accentuating the importance of strengthening direct markets as the foundation of a working landscape of diverse farms at all scales.
Since their revival in the 1970s, Vermont’s direct markets have been a critical market channel for producers and must continue to be a priority for focused market and business development. In addition, direct markets serve as a common entry point for shoppers who may be new to purchasing local food. In 2017, Vermont direct market sales totaled $49.9 million.
Farms often rely on direct markets as part of a mix of market outlets critical to their business viability. The USDA’s Economic Research Service found, “farmers who market goods directly to consumers are more likely to remain in business than those who market only through traditional channels” and that, for beginning farms, having direct markets as part of the business increased the chances of business survival. Through the 1990s to early 2010s, a boom in direct markets, buoyed by the burgeoning “local food movement,” coincided with growth in diversified farms across the state. This success brought competition from large retailers and corporations claiming “local” as a marketing term, sometimes misleadingly, leading to concerns about the viability of direct markets. Competition also increased innovation from direct market farms, from on-farm events to responding to consumer demand with more flexible CSA models (see Agritourism brief).
Results from the 2017 USDA Census of Agriculture show that direct sales are increasingly important to the bottom line for Vermont farms, with average sales per farm through direct market channels more than double those in 2012. Consumers in Vermont are spending more money in direct markets channels as well, with sales increasing over 82% from $27.4 million in 2012 to $49.9 million in 2017. Direct-to-consumer sales in Vermont made up over 24% of total local food and beverage purchases in 2017 and 3.3% of overall food and beverage purchases.
Various organizations provide marketing assistance to producers, conduct statewide consumer campaigns about the benefits of direct markets, foster collaborative marketing between direct marketing businesses, and work to connect shoppers and visitors to Vermont producers. These promotion and technical assistance programs represent a solid foundation to expand upon.
1,833 farms, 26.9% of all farms in Vermont, sell some food direct to consumers. These direct-to-consumer sales provide an average revenue of $27,262 per farm.