G-M-O crops, or branded beef marketed to a targeted group of consumers, or community-financed processing facilities to add value to locally grown commodities, the Rural American economy is steadily shifting from a focus on agri-production to one ground in niche marketing.
The trend is generating a plethora of new enterprises ranging from Internet sales of branded goods to the development of new energy markets for wind, ethanol and more recently soy diesel.
Niche markets come in different sizes and characteristics. For some the wholesale market is paying off. That's certainly the case with one Iowa-based, family-owned business, which through hard work and ingenuity is creating a buzz.
David Miller explains.
Ann Garber, Log Chain Apiary:"…I established myself as a reputable distributor, reputable vendor and so then when I was ready to resign my spot at the hospital, then I was able to pick up some more stores, because I had a track record and that worked out pretty good."
Though she started keeping bees in 1975, no sales were made until 1979. In that year, the company's first offering, comb honey, was sold out of Garber's garage on her farm Log Chain Knolls. In 1993, she moved the processing operation to this store front in Allerton, a town of 600, and expanded the product line to include items like flavored creamed honey and bees wax candles.
In 1996, Garber's son Andrew returned after 17 years in the food and beverage hospitality industry, at the end managing a comedy club in Kansas City. When Ann decided to expand her business, the younger Garber was looking for a new challenge.
Andrew Garber, Log Chain Apiary: "It was something that I was fairly familiar with as far as the beekeeping end of it cause we had done that as I was growing up, so I had some knowledge of it. And, I also had quite a bit of marketing expertise from being in the comedy club business…It is nice to develop your own business, rather than work with someone else and it's a challenge, but you also make your own rules and you set your own course basically and you roll the dice and hope that things work out. "
Drew's job duties include everything from assisting with the care of the bees, mixing and bottling the honey, helping with marketing and working the delivery route.
The honey from Log Chain's hive's goes to the business but the output is only enough to cover 15% of the 40-thousand pounds of raw product needed to keep up with demand. The Garber's purchase bulk honey from local producers at a cost of $1.75 per pound and add value by either straining the honey or turning it into one of their signature flavored creamed honeys. A 12 ounce jar of the blended spread retails for $4.
There is enough extra work that the Garbers employ one person four days per week to handle various duties including candle making.
There are 75 retail establishments in Iowa and Missouri. Every two weeks during the summer months Drew splits production duties with deliveries. It usually takes two days to restock the 35 Iowa locations. During the winter months the delivery schedule ramps up to a weekly activity and an extra driver is hired to keep up with orders.
Today Drew is restocking the shelves at a Hy-Vee store in Iowa's capitol city Des Moines. Mike Kueny, the store manager, used to help the Garbers harvest, process and deliver Log Chain honey when he was in high school. Even though Hy-Vee is a regional supermarket chain with 200 stores in seven states, local managers are allowed to sell items that customers request, like the one produced by the Garbers.
Mike Kueny, Hy-Vee: Well one thing about unique Iowa products is that people get use to buying products from Iowa and there is not a lot of honey sold in Iowa. There are different people that take care of honey, but when they get use to one certain product, if you are out, they will come up and ask you when you are getting it in or when the truck is coming and so they get use to that.
One look at the shelf shows Log Chain is not the only local honey available. The product even competes against the store brand.
Grocery stores are not the only sales venue. One of the non-grocery store outlets is located at Living History Farms in Urbandale, Iowa, a suburb of Des Moines. Living History is a 600-acre open-air agriculture museum where guides, in period appropriate clothing, give hands on demonstrations of farming techniques from different historical periods. The display of Log chain products in the museum's gift-shop is passed by visitors that come from around the world.
Log chain also receives a boost through their membership in a state-sponsored marketing association called the Taste of Iowa. The organization has helped the Garbers by arranging for the display of their honey at several food marketing conventions and providing them with some limited in-store advertising that readily identifies their products as "made in Iowa."
Long ago, Garber realized marketing was a continually evolving process. 25% of their inventory is sold through the retail store front and the other 75% is sold through wholesale outlets and other points of sale.
Ann Garber, Log Chain Apiary:"It's a never ending activity, because markets come and markets go. No market is forever."
Along with sales successes have been some disappointments. Ten years ago, a percentage of the business came form walk-in customers that were staying at and visiting a bed and breakfast two doors down. At one time, several bus loads of tourists were coming to Allerton each week. Unfortunately, the bed and breakfast was forced to close its doors earlier this year cutting much of the foot-traffic to the store front.
A small portion of that business has been replaced by the launching of an internet site. The full product line is available on the site with added premiums like gift baskets. Through this venue honey has been shipped to places as far away as the U.S. Virgin Islands.
Drew Garber, Log Chain Apiary:"…you are going to have fluctuation in what happens in different markets. You are always going to be losing some markets, you're going to be opening new markets, but of course, you have to offer a quality product or you are not going to be able to keep the share of your market. Yeah, marketing is real important, but also quality of product is very important as well."
All of the experiences over the past 23 years have not diminished Ann Garbers' passion for bees or honey production. Over time she has found that the niche' she enjoys is supported by the competition and camaraderie she receives from other producers.
Ann Garber, Log Chain Apiary: "We try to get along with the other packers and producers, cause none of us is very big. None of us are very big and it's nice to have friends. Friends are good."
For Market to Market, I'm David Miller.