White Paper Brief: Local & Organic Food Market Lead Generation - A Healthy Way to Grow Your Business
If you've ever been to a Whole Foods Market, you probably noticed they bold "Local" or "Organic" labels. You have likely also noticed more restaurants and grocers making a point of serving local vegetables in your area. This is because, consumer interest in sourcing local and organic food is a growing trend across the United States, and is predicted to continue to increase steadily.
That is, purchasing sustainable, responsible, “healthier” and/or organic foods at local farmer’s markets, grocery stores and local farms is a trend that appears to be becoming mainstream. Approximately 45% of US consumers prefer to buy a minimum of one fresh organic or local food product at least once per month.1
In fact, since 2014, the number of farmers markets has risen by nearly 200%, and food hubs by nearly 300%. Farm-to-school programs increased by almost 500% in 2012. There is still room for expansion and local demand certainly has the potential to continue rising.2
The public sector has initiated arrangements with local producers. Farm-to-school programs, for example, have vaulted 430% in the past decade.1 The number of schools participating has continued to rise. Now, over 42,000 schools buy local produce.3
Moreover, the federal government and local governments have initiated programs and expanded upon old programs to help local food producers. Examples are the Local Food Promotion Program, various Grants for farmers who sell locally and food insecurity nutrition incentives. SNAP (Supplemental Nutrition Assistance Program) dollars are monthly benefits low-income Americans can use at farmers markets. SNAP purchases multiplied by nearly 7 times from 2005 to 2013.4
Potential Industry Roadblocks to Consider
The maturity of the local food economy might be the biggest concern for lead buyers in the industry. Many farmers are settling on food hubs as their primary or only means of marketing their crops. Early mover advantages are more difficult to achieve in the US than they were 5 to ten years ago. However, there is no indication the market growth will or should stop.
Another potential problem is biodiversity and soil nutrition. Researchers believe the shift towards local food will eventually put a strain on farmland. Although this problem has not yet been observed, it may force farmers to change their plans in the future.5 However, local demand may not reach a point that would threaten local farmland for quite some time.
For organic food, a significant roadblock is the maturity of the industry. Unlike 10 years ago, organic food is found in nearly every market today. On the other hand, regulations involving the "organic" label on food packaging are widely viewed as inadequate and favorable to producers who wish to take advantage of the organic label without living up to the perception of an organic producer. In other words, they qualify to use the label but they use more chemicals in the fields or more non-organic ingredients in production than some consumers want to accept. The market for "organic" food is growing steadily. The market for "100% Organic" food has great potential. Likewise, 100% grass-fed meat, hormone-free meat and other products are gaining popularity.
According to the United States Department of Agriculture (USDA), the majority of consumers most likely to purchase local, organic food are educated, middle-class caucasians located in the Northwestern and Northeastern regions of the United States. There are also pockets centering around major urban cities (e.g. Seattle, Oregon, California, Maryland, Virginia, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Pennsylvania, local urban farmer’s markets).6
While the majority of consumers buying organic, local and fresh foods are middle-class caucasian, there are a number of businesses attempting to appeal to other ethnic groups and lower income families. Examples include the urban farm model, the urban co-op model and even a few conventional supermarkets that make it their priority to serve lower-income communities where larger local food industries lack a presence.
Fresh, local products are generally purchased by consumers in varying quantities (e.g. by weight, number, wholesale, etc.) who own local businesses, bakeries, cafes, catering services, manage school meal programs or simply for personal use.
Studies have also found that distance from the consumer's home to fresh food markets and restaurants is one of the most important factors.7 In addition, the top reasons for purchasing organic or local fresh foods are because the consumer perceives these foods as "healthier", more environmentally friendly and/or supporting the local community.
Lead Generation: Effectively Connecting your Target Population with Your Local, Organic Fresh Food Product
The times have changed, and producers, wholesalers and retailers are always searching for new, better opportunities to reach consumers.
One of the most effective methods for connecting your target consumer to your local, organic fresh food product is via lead generation though carefully targeted PPC management.
Lead generation using targeted PPC management effectively reaches your specific demographic of consumers who are actually interested in, or actively seeking the local, organic fresh food products you sell. Using this carefully targeted approach, you can generate hundreds or even thousands of qualified leads for your business. Qualified leads generate sales, which generates revenue.
Local, organic and fresh food lead generation through targeted PPC management is also often a very cost-effective method of connecting consumers to your product.
PPC Keyword Analysis
Research of the top keywords used in the generation of leads for the local, organic fresh food industry has revealed that PPC Management has the potential to be a cost-effective method for lead generation.
More specifically, upon further analysis of these keywords using Google data, competitor data and industry averages, the average cost-per-click (CPC) is predicted to be approximately $1.43. While using a predicted average conversion rate (CVR%) of 9%, based on the predicted industry standard, the average cost-per-acquisition (CPA), or cost per lead, will likely range from $8 to $10, the average being a predicted overall CPA of $9.
With regards to predicted volume, it appears the average lead volume for this industry resides in the moderate category. More specifically, the average monthly click volume is predicted to be between 60 and 2,000 clicks per month, with the average keyword receiving approximately 580 clicks per month. Based on Google, competitor and industry data, it is predicted that the average keyword will yield an average of 55 conversions, or leads, per month.
Again, with the growing consumer interest in purchasing local, organic fresh foods, this volume is predicted to only keep increasing.
Local Fresh Food Lead Buyers
Who buys local, fresh food leads? There are several kinds of buyers that would benefit from purchasing local and organic fresh food leads. Examples are food wholesalers, food hubs, food delivery companies and producers. Due to the growing popularity of food hubs, they can benefit from leads by increasing turnover. Wholesalers and delivery companies interested in increasing awareness of local, fresh, organic products will also benefits from leads. Farms and manufacturers who choose to keep their marketing and sales functions in-house can streamline processes by taking advantage of lead generation.
Since there is range of business models involved in the "non-conventional" food industry, there is a range of lead generation strategies that are used. That is, every lead buyer's lead generation strategy is different and is tailored to specific needs. The good news is that a third party lead generation company will do all the work for you.
Based on average CPA predictions for the fresh, local food industry lead generation vertical, the average Price-Per-Lead (PPL) a lead buyer can expect to pay is anywhere between $12 - $14.
Current Industry Competition
Although there is PPC competition in the industry, it is currently moderate. The current average ranking difficulty is 48%. This means the difficulty of putting ads in visible places on the web is between very easy and very difficult. Since some products and services in the industry are new, an early mover advantage is achievable. The number of competitors competing on industry keywords ranges from 1 to 60. The average number of competitors is 30, which is relatively low. The following domains are the top 10 PPC competitors in the industry.
In summary, there are a range of local, organic and fresh food industry players that can benefit from targeted PPC lead generation. From the largest food hub to a small farm has this efficient marketing tool at their disposal.
PPC managers gather data and determine a price per lead for clients in this industry. The lead purchaser's risk and investment is minimized because lead gen companies have expertise food industry businesses usually don't have. In other words, a lead gen company does the work and takes the risk. The lead purchaser simply decides if the investment is worthwhile. If it is, the purchaser can hand the leads over to their sales teams after a short time.
Interested in lead generation through precisely targeted PPC management? Contact us today to discuss how we can help you succeed!
1. Runyon, Luke. (Feb 2015). "Are Farmers Market Sales Peaking? That Might Be Good For Farmers." The Salt. Available Online:http://www.npr.org/sections/thesalt/2015/02/05/384058943/are-farmer-market-sales-peaking-that-might-be-good-for-farmers
2. (Jan 2015). Local and Regional Food Producers. Trends in US Local and Regional Food Systems. (pg. 3). Available Online: http://www.ers.usda.gov/media/1763057/ap068.pdf
3. The Farm to School Census (Apr 2016). USDA. Available Online: https://farmtoschoolcensus.fns.usda.gov/
4. (Jan 2015). Policies Supporting Local and Regional Food Systems. Trends in US Local and Regional Food Systems. (pg. 54). Available Online: http://www.ers.usda.gov/media/1763057/ap068.pdf
5. Zumkehr, Andrew and Campbell, Elliott (2015). The potential for local croplands to meet US food demand [Abstract]. Frontiers in Ecology and the Environment. Available Online: http://onlinelibrary.wiley.com/doi/10.1890/140246/full
6. (Jan 2015). How Much Do Demographic Characteristics Matter?. Trends in US Local and Regional Food Systems. (pg. 31). Available Online: http://www.ers.usda.gov/media/1763057/ap068.pdf
7. Zepeda, Lydia and Li, Jinghan (2015). Who Buys Local Food? (pg. 9) Available Online: http://ageconsearch.umn.edu/bitstream/7064/2/37030001.pdf