Sample Market Analysis
Family Farmers Choice has developed a database of present customer who buy on a regular basis and customers who have bought only occasionally as the opportunity presents itself, such as at farmers markets. Customer demographics show the current customers are in an income range of $45,000 or more, two income families, professional occupations, concerned about the environment and located primarily in urban areas. Research also shows these customers are Internet users and willing to order product from our business via the Internet.
Research conducted by Farmers Choice has verified that there is a market segment large enough to justify the investment in the processing facility. Further, the premium these consumers are willing to pay will allow the shipment of products to nearly all geographic locations in the country. Focus groups, market surveys and product demonstrations at several locations were used to develop demographic profiles of each promising location so that zip codes could be used to easily identify future markets when expansion is deemed appropriate. (Note: Results of the surveys can be provided if additional information is desired.)
A significant number of consumers are concerned about where their meat products are coming from and how these products are processed. The company will market directly to that group. Since they are highly informed consumers, however, a major task will be to establish credibility.
In the farmers markets targeted for sales there are an estimated 100,000 potential customers (based on census estimates). At present, Farmers Choice has reached only a fraction of that customer base.
Based on data in the U.S. Census Bureau databases, estimated customer potential is as follows:
|Big Town Farmers Market |55,000 | |Lotus |10,000 | |Keeper |10,000 | |Sagmore |15,000 | |Cool Springs |5,000 |
Market Size and Trends
18.2 billion pounds of pork produced
19.0 billion pounds of pork produced
19.4 billion pounds of pork produced
Source: Steve Meier, National Pork Producers Council. 1999 figures based on USDA estimate.
Average prices received by the producer have decreased in recent years: 1997
$52.90 per hundred weight
$34.40 per hundred weight
U.S. per capita consumption of pork is declining:
57.3 pounds per person
49.1 pounds per person
In spite of declining per capita consumption of pork, consumers still spend more money on pork per year than on poultry and fish. Average annual expenditures for pork in 1998 were $146 per person per year, second only to beef at $218. The expenditures for all meat (beef, pork, poultry and fish) decreased slightly from the 1997 annual expenditures. (Source: Consumer Expenditures Survey, 1984-98, U.S. Department of Labor, Bureau of Labor Statistics)
According to USDA data, higher expenditures for pork versus poultry may have been due to retail prices. For example, in June 1998, the average retail price for pork was $2.29 per pound, compared to chicken at $1.55 per pound.
Consumer Perceptions of Pork
According to a survey conducted by the National Pork Producers Council, more than three out of four family cooks believe pork is a healthful choice. The same study indicated families prefer pork because it tastes good. Survey respondents also cited pork’s versatility, nutrition and value as key reasons for its popularity.
Ranking of the favorite cuts:
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