CATALYSTS TO GROWTH- farmers' markets as a stimulus for economic development

1999 Greenpaper

Catalysts for Growth:
farmers markets as a stimulus for economic development

Executive Summary

The Crescent City Farmers Market, like farmers’ markets in other areas, is a proven effective stimulus for economic development for the downtown area, for the agricultural enterprises that participate in the Market, and for the rural parishes from which the vendors come. A study by Tulane’s A.B. Freeman School of Business has found that

• theCrescent City Farmers’ Market generates over $1 million annually in direct and indirect benefits to vendors, downtown businesses and rural communities;

• the average vendor takes home $391/week, for an income of over $20,000 a year from the market;

• the additional income is spread far beyond Orleans and Jefferson Parishes, to more than seven parishes in Louisiana and at least four counties in Mississippi;

• The CCFM has resulted in 15 new businesses and 22 new jobs in its first three years. A January 1998 survey showed that the 55businesses then operating in the market employed 98 people;

• Downtown businesses gain additional income of $450,000 a year as a result of the Market.

The positive aspects of the Crescent City Famers Market, and indeed, other such markets throughout the country, far exceed the low-risk, minimal capital required to launch a half-day weekly enterprise.

The mission of the economics institute, the parent body of the Crescent Ctiy Farmers Market, is to initiate and promote ecologically sound economic development in the agricultural sector in the greater New Orleans region. We believe this "greenpaper," the second in a series, shows not only the effectiveness of the Crescent City Farmers Market but also how such markets can be begun in other areas.

GREENPAPER

Anyone who has visited the Crescent City Farmers Market understands its social benefits: the Market is a low-key, intimate block party, offering the chance to sample and purchase beautiful fresh produce, seafood, baked goods, and other food items directly from the producers, while mingling with neighbors. While this certainly feels good, its more serious purpose is to improve the livelihood of small-scale food producers and, secondarily, of the parishes in which they live and of the businesses that operate downtown.

According to several studies conducted over the past two years, the Market is succeeding on all counts. A study produced in June 1999 by Tulane University’s AB Freeman School of Business concluded that vendors take home an average of $391/week (that’s $20,332/year) from the Market. Without exception, vendors report that they reinvest a portion of this money in their businesses (spending money in rural parishes from St. Bernard and St. Tammany all the way to Hancock County, Mississippi). In addition, 88% of vendors affirm that they spend "a substantial amount" of their weekly income in Orleans parish, following the Market. A high percentage of Market-shoppers also spend money downtown either before or after the Market. As evidence of this, nearby downtown retailers say they experience a 30%-70% increase in Saturday-morning traffic as a result of the Market.

Benefits to vendors

Ron Zappe, owner and president of Zapp’s Potato Chips and sponsor of the plastic bags used by vendors at the CCFM, explains why farmers markets are so important to small-scale food producers: "Markets like the CCFM are an important retail outlet for folks who are not large enough or rich enough to get their products into grocery stores...which is increasingly hard to do without paying for shelf space. They’re a place to start. And one of the reasons they work is that they bring the customers to the farmers, instead of the other way around."

Nationally known businesses that got their start through public markets include Starbucks Coffee, which began at a public market in Seattle, and The Body Shop, which traces its retail beginnings to the Camden Lock Market in London. Local entrepreneurs who have similarly benefited from the Crescent City Farmers Market include Henry Amato, of Amato’s Winery; Mary Logsdon, of La Spiga Bakery; and Anthony and Ethel Smith, of Anthony Smith Crabs.

• Thanks to exposure gained through the Market, Amato’s fruit wines are on local grocery shelves, and the company is supplying blueberry wine to a company in Japan.

• Logsdon, along with La Spiga’s two other owner-employees, plans to open the bakery’s first full-time retail location in October 1999. "We would not even be considering a retail location if it were not for the exposure the Market has given us," she says. "It’s the encouragement of our Market customers that has made us decide to take this exciting next step."

• While Anthony and Ethel Smith have no current plans to open a full-time retail location, their participation in the Market "has increased our income by at least 25%," Ethel says. "We’ve only been a part of the market since March of this year, but it has picked up business a lot. We usually sell everything we’ve got by 11 a.m." The Smiths invested a portion of their Market earnings to expand their production capabilities–primarily for the purchase of new crab carts–and also made investments in a tent, containers, and other items to create a retail presence for their business at the Market. With these investments made, the Smiths look forward to even greater economic gains in the future.

Another grower, Heather Robertson of Johndale Farm, says that, without the Market, "We would not still be in business. We weren’t able to break even with the prices we could get at wholesale for our strawberries, tomatoes, and other produce. This year, we probably sold more than half of our strawberries through the Market."

Benefits to rural parishes

According to the AB Freeman economic impact study, 75% of the vendors who participate in the Crescent City Farmers Market live beyond Orleans and Jefferson parishes, in St. Bernard, St. Tammany, St. John, Tangipahoa, Washington, Plaquemines, or Livingston parishes, or in Forrest, Perry, Pearl River, or Hancock County, Mississippi. The Market produces a combined regional economic impact of nearly $549,000 annually in these communities, based on vendors’ Market-generated income. This income is spent on everything from food, clothing, utilities and other living essentials, to new equipment, vehicles, business supplies and services.

The increased income has also led to new job creation throughout the greater metropolitan area. In its first three years of existence (1995-1998), the CCFM resulted in 15 new businesses and 22 new jobs. A survey completed in January 1998 showed that the 55 businesses then operating in the Market employed 98 people. For example, Johndale Farm’s success at the Market has inspired Heather Robertson to open a retail fruit stand in front of her home. La Spiga Bakery has added three employees (two bakers and a driver) since participating in the Market. Others vendors have hired people to help them with retail packaging, customer service and sales, you-pick-em operations, and deliveries, as well as with growing and harvesting.

Finally, the Market benefits rural parishes (as well as the entire metropolitan area) by providing a retail outlet for growers demonstrating the use of environmentally sound, sustainable growing practices — and both models and information that other growers can apply for sustainable agriculture, knowledge that can be difficult to come by without a structure of exchange such as that which the Market provides.

Benefits to downtown businesses

Downtown businesses have also benefited from the Market’s presence on Saturday mornings–which, otherwise, is not a busy time of the week for most of them. The AB Freeman study estimated that downtown businesses gain additional income of $450,000 a year as a result of the Market. Confirming those figures, Aubrey Coulsby, manager of PJ’s Coffee on Camp St., just one block from the Market, estimates that "maybe 70% of our customers on Saturday mornings are on their way to the Market. That’s especially true in the summer, when a lot of our business customers are on vacation."

Similarly, Ken Jackson, manager of Spice, Inc., says "We’ve definitely benefited from the Market’s presence nearby. Between 9 a.m. and noon on Saturdays, I would say 30%-40% of our clientele have been to or will go to the CCFM."

The Market has benefited downtown businesses in other ways. Spice, Inc., for example, has "picked up several new wholesale suppliers from the Market," Jackson says. "We visit the Market ourselves two to three Saturdays a month, and many of the vendors stop by our shop before or after the Market to see if we’re interested in anything. We also make use of the Market Fax (weekly information about what’s available for restaurateurs) to keep in close contact with growers and vendors."

Restaurateurs ranging from Frank Brigtsen (Brigtsen’s) and Susan Spicer (Bayona) also credit the Market with facilitating daily menu changes at their restaurants and making accessible a wider array of fresh produce than would otherwise be available. They also acknowledge growers’ willingness to respond to their suggestions about varieties of fruits and vegetables to produce.

A less tangible benefit deriving from the Market is its impact on public perception about the downtown New Orleans area. Jay Hebert, acting director of the Downtown Development District, says, "The Market definitely enhances the sense of ‘neighborhood’ in the downtown area. It gives people another reason to come downtown and do other shopping and dining." Richard McCarthy IV, executive director of the economics institute, agrees, "It makes downtown safer because there are people on the street. It changes the feel of the neighborhood from that of a cold, impersonal urban environment, to that of a community. Even vendors who once moved away from New Orleans now have a completely different experience of the city when they come to town for Market."

Organizational prerequisites

While civic and business organizations may recognize the value of a nearby farmers market, they should also recognize the investments required to create a successful public market. The success of the Crescent City Farmers Market owes much to excellent behind-the-scenes organization— without which other markets have failed. As McCarthy noted, "It’s not as simple as finding a parking lot and notifying farmers."

In addition to securing a space, a successful market requires:

• staffing and security

• parking

• week-in, week-out continuity (rain or shine)

• garbage collection

• safe food handling guidelines

• knowledge of and compliance with local regulations

• a name, logo, signage, phone number, and other elements that identify the market as a professional, stable retail operation

• a governing board for resolving problems and complaints, accepting new vendors, and enforcing the market’s own rules.

The ECOnomics Institute has met these requirements by obtaining grant funding to maintain a small staff, and by soliciting and organizing a hardy group of donors and volunteers. Without a continuing source of supplemental funds (either public or private), and a small but committed group of individuals willing to be responsible for the organization and success of the Market, the CCFM would disintegrate over time, as would any retail operation.

Conclusions

The CCFM brings an economic impact of $1 million, provides consumers and restaurateurs with a welcome supply of fresh local produce (much of it organically grown) and other food products, and builds important ties among urban residents and residents of the rural surrounding parishes.

This report was written by Leslee Alcantara, a freelance writer with 13 years experience writing about business and economic development in the greater New Orleans region.

ECOnomics Institute . . .

is a nonprofit organization housed at Loyola University New Orleans' Twomey Center for Peace through Justice. Its mission is to initiate and promote ecologically-sound economic development for individuals, families and small businesses in the food and agriculture sector in the greater New Orleans region by:

• creating new commercial infrastructure for small-scale agriculture (like the Crescent City Farmers Market in downtown New Orleans and the Market Fax© for restaurant sales) and assisting other communities to develop their own farmers’ markets – all of which reward good stewardship of the land and water;
• increasing the entrepreneurial capacity of the region's food producers;
• providing nontraditional business training to agricultural enterprises so they can respond to consumer demand and better utilize new commercial infrastructure;
• researching and shaping public policy for small-scale agriculture;
• developing new leadership in the region’s agriculture.

This report is published with generous support from the Joe W. and Dorothy Dorsett Brown Foundation, Catholic Campaign for Human Development, Greater New Orleans Foundation, F.B. Heron Foundation, Keller Family Foundation, Reily Foundation and the Zemurray Foundation.

For more information: phone 504-861-5898 or write: ECOnomics Institute, Loyola University, 7214 St. Charles Avenue, Campus Box 907, New Orleans, LA 70118-3565.

Return to th ECOnomics Institute Home Page

10/19/98