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Agrimarketing : March 2008
The perception of what defines agriculture and farms has changed dramatically over the past few years. It's not just the large traditional farmers that are influencing our economy and shaping our rural communities, it's actually a large per- centage of ex-urbanites who make less than $10,000 in farm revenue a year. To put this into perspective, out of the 2.1 million farms in the U.S., Large Property Owners (LPO) make up 1.6 million farms --- that's 56% of all farms and this number is steadily increasing. SO WHO ARE LPO? An LPO makes from $1,000 to $10,000 in farm income a year. They report a major occupation other than farming and typically choose to live in the country because of their love for the outdoors, the desire for pri- vacy, to get away from the hustle and bustle of the city and to provide a safe environment for children. • Ages 26-54 • Married • Half have children living in the household • Higher than average incomes • Own their homes • Women are key decision makers When LPO aren't working their full-time jobs they spend their evenings and weekends on activities that revolve around their land and local community events. Raising ani- mals is a common passion -- multiple species and multiples of each, and their farm revenue is more likely to come from livestock than crops. TRENDS AND DYNAMICS Growth in land use for rural residence and population growth in non-metro areas: Over the last five years, the cumulative annual growth rate for farm income less than $10,000 is 25%. You can see that consolidation has created a gap in the middle and fueled the growth of larger farms. Parceled land lots allow points of entry for the less than $10,000 LPO. Farm Income 5Yr.CAGR% <$10,000 25 $10K-$49.9K -3 $50K-$99.9K $100-$249.9K -11 >$250K 12 (Source: USDA) Highly engaged in the lifestyle and community. They spend their free time engaging in community events and learning about their property. They have higher than average incomes and are willing to, and have to, invest in their new land. Technology enables working at a distance and increased education. There is a much wider Internet usage in rural communities, particularly among the LPO. Fifty-five percent of U.S. farms have Internet access and individuals using DSL doubled in 2007 at 27% compared to 2005 at 13%. The experienced computer users are capable of looking for product information online and are willing to make purchases. In fact, the Internet is one of the top resources used for property maintenance questions and product informa- tion. BRANDS LPO are willing to spend money on equip- ment and tools for their property and care more about the brands and prod- ucts to take care of their land than the cost. They have the money to spend and make purchases year round. However, while they're ready to spend and make purchases, sales rep- resentatives can't assume the LPO's know what they need and why they need it. LPO seek basic information that traditional farmers don't think twice about, so sales representatives need to revisit their sales process and qualify the customer. They need to be able to explain solutions at a very basic level so LPO's understand why they need a specific product or ser- vice and how to use it. SO WHY CARE ABOUT LPO? Their lifestyle includes embracing hobbies, interests and activities --- which require "stuff" and places to put "stuff." Gardening is one of the top three hobbies (56% garden). Purchases for the garden may start with the very simple; seeds/plants, spades, trim- mers/shears, gloves, hoses, sprinklers, etc. However, enthusiasts are likely to purchase garden tractors, tool storage and garden furniture to name a few. Home improvement also pro- vides a lot of opportunity for new and continuous product purchases. Almost 40% of LPO note home repairs as a hobby or interest. Eleven percent expect to make major home or property improvement in next 18 months. The below table emphasizes the increasing trend in property management purchases. HOW TO BE SUCCESSFUL • Understand the nuances of this market segment as they relate to their brand and products/services; • Tailor products and services to appeal to this population; • Provide shopping convenience across multiple channels; • Educate consumers new to the lifestyle; and • Communicate with consumers using messages that resonate and media consistent with the specific consumer group's interest. AM 30 AgriMarketing March 2008 FOCUS ON: MARKETING TO THE RURAL LIFESTYLER ABOUT THE RURAL LIFESTYLER by Lyssa Surface, Sr. Mgr, Mktg & Knowledge Mgmt, Market Directions Inc. Category Purchases Notable Purchases Last 12 Mos. Last 12 Mos. Next 12 Mos. Power Tools: 52% Tractor: 10% Tractor: 16% Home Improvement Fencing: 21% Fencing: 35% Products: 47% Property Improvement Machinery: 20% Machinery: 24% Products: 42% Outbuilding: 18% Outbuilding: 34% (Source: Market Directions Subscriber Study)
Crop Life America