• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Title Page
 Center information
 Foreword
 Acknowledgement
 Table of Contents
 List of Tables
 Summary
 Introduction
 Objectives
 Procedure
 Findings
 Conclusion
 Appendix
 Reference






Group Title: Industry report - University of Florida. Florida Agricultural Market Research Center ; no. 81-2
Title: Farmer to consumer direct marketing of blueberries in Florida
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STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026881/00001
 Material Information
Title: Farmer to consumer direct marketing of blueberries in Florida producer and consumer benefits, a report
Series Title: Industry report Florida Agricultural Market Research Center
Physical Description: xi, 50 p. : ; 28 cm.
Language: English
Creator: Degner, Robert L
Rodan, Lance W
Mathis, Kary, 1936-
Publisher: Florida Agricultural Market Research Center, a part of the Food and Resource Economics Dept., Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1981
 Subjects
Subject: Blueberries -- Marketing -- Florida   ( lcsh )
Direct selling -- Economic aspects -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 50.
Statement of Responsibility: by Robert L. Degner, Lance W. Rodan, and Kary Mathis.
General Note: Reprinted December l981.
 Record Information
Bibliographic ID: UF00026881
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000410002
oclc - 07920126
notis - ACF6754

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Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Title Page
        Title Page
    Center information
        Page i
    Foreword
        Page ii
    Acknowledgement
        Page iii
    Table of Contents
        Page iv
        Page v
        Page vi
    List of Tables
        Page vii
        Page viii
    Summary
        Page ix
        Page x
        Page xi
    Introduction
        Page 1
    Objectives
        Page 1
    Procedure
        Page 2
    Findings
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
    Conclusion
        Page 41
    Appendix
        Appendix
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
    Reference
        Page 50
Full Text





Industry Report 81-2.


Farmer to


.rketing


of BluI~h
PRODUCER AND CON .
PRODUCER AND CON,


JrT"


August 1981


IAMB=














ABSTRACT


Florida has a small but growing blueberry industry. Almost
all blueberries are marketed directly to consumers through Pick-
Your-Own (PYO) sales outlets. This report describes five farmers'
blueberry PYO outlets, ranging from 2 to approximately 12 acres.
Farmers' return per hour of family labor devoted to the direct
marketing activity ranged from about $1.00 to $13.00 per hour.

Consumers patronizing the PYO outlets purchased an average
of 14 pounds of blueberries at an average price of 60 cents per
pound. Compared with prevailing prices at area supermarkets, they
saved an average of $5.94 per transaction. Lower prices, unrivaled
freshness, superior overall quality, and recreation were principal
reasons for patronizing the PYO outlet.


Marketing, direct marketing, blueberries.


Key words:





















FARMER TO CONSUMER DIRECT MARKETING OF BLUEBERRIES IN FLORIDA;


PRODUCER AND CONSUMER BENEFITS












a report by

Robert L. Degner, Lance W. Rodan, and
Kary Mathis









August 1981
Reprinted December 1981



The Florida Agricultural Market Research Center
a part of
The Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611

















The Florida Agricultural Market Research Center

A Service of
The Food and Resource Economics Department
of the
Institute of Food and Agricultural Sciences


The purpose of this Center is to provide timely, applied research

on current and emerging marketing problems affecting Florida's agri-

cultural and marine industries. The Center seeks to provide research

and information to production, marketing, and processing firms, groups

and organizations concerned with improving and expanding markets for

Florida agricultural and marine products.

The Center is staffed by a basic group of economists trained in

agriculture and marketing. In addition, cooperating personnel from

other IFAS units provide a wide range of expertise which can be applied

as determined by the requirements of individual projects.
















FOREWORD


Inflationary trends in prices paid by consumers and input prices

paid by farmers have resulted in increased interest in farmer-to-consumer

direct marketing as a means of reducing food cost to consumers and increas-

ing financial returns to farmers. This increased interest resulted in

the passage of the Farmer to Consumer Direct Marketing Act of 1976

(PL 94-463). The purpose of this act is to promote the development and

expansion of direct marketing of agricultural commodities from farmers

to consumers on an economically sustainable basis. The act required

evaluation of direct marketing activities through a series of research

activities.

In 1978, the Florida Agricultural Market Research Center was selected

by USDA-ESCS to conduct case studies of representative direct marketing

methods employed by farmers in Florida and of consumers patronizing these

outlets. Nine agricultural commodities commonly marketed directly by

producers to consumers were selected for the series of case studies. The

commodities included blueberries, grapes, citrus, tomatoes, snap beans

(including pole beans), strawberries, watermelons, honey, and eggs. With

the exception of tomatoes and snap beans, which are very similar with

respect to direct marketing activities, the case study findings for each

commodity are reported in separate publications to allow for greater

efficiency in disseminating the results.

















ACKNOWLEDGEMENTS


This research was initiated by a request from the United States

Department of Agriculture, Economics, Statistics, and Cooperative

Service, National Economic Analysis Division (now Economic Research

Service, National Economics Division). A substantial portion of the

funding was provided by USDA-ESCS. Peter L. Henderson, Agricultural

Economist was particularly helpful in formulating and guiding the

project, and is due our sincere appreciation.

Our appreciation is also expressed to Mr. Gervasio Cubenas, research

assistant, Mr. Scott Woolley and Miss Judith King, Statisticians, for

their help in conducting and analyzing grower and consumer interviews.

We also express out thanks to Ms. Patricia Beville and Miss Lois Schoen

for typing and editing this manuscript














TABLE OF CONTENTS

Page

FOREWORD......................................................... ii

ACKNOWLEDGEMENTS ................................................ iii

LIST OF TABLES................................................. vii

LIST OF APPENDIX TABLES.......................................... viii

SUMMARY............................................ ............ ix

INTRODUCTION ................................................... 1

OBJECTIVES..................................................... 1

PROCEDURE...................................................... 2

FINDINGS....................................................... 3

Producer Benefits of Direct Marketing ...................... 3

Case A..................................................... 4

Background........................................... 4
Revenue.............................................. 4
Costs............................................... 4

Production costs.................................. 4
Marketing costs.................................... 6

Structure and equipment requirements.......... 6
Supplies and services......................... 7
Hired labor................................... 8

Net Returns............................................ 8
Other Advantages and Disadvantages of Direct
Marketing........................................ 8

Case B................................................... 9

Background......................................... 9
Revenue............................................ 9
Costs............................................... 9

Production costs................ .. ............... 9
Marketing costs.......... ........................ 11

Structure and equipment requirements.......... 11
Supplies and services......................... 12












Table of Contents--Continued

Page

Net Revenue....................................... 13
Other Advantages and Disadvantages of Direct
Marketing ........................................ 13

Case C................................................... 14

Background........................................... 14
Revenue....... ...... .............................. 14
Costs.......................................... .. 15

Production costs............................... 15
Marketing costs.................................. 15

Structure and equipment requirements....... 15
Supplies and services...................... 17
Hired labor................................ 18

Net Revenue....................................... 18
Other Advantages and Disadvantages of Direct
Marketing........................................ 18

Case D.................................. ... ............... 18

Background......................................... 18
Revenue.......................................... 19
Costs........................................... 21

Production costs................................ 21
Marketing costs................................. 21

Structure and equipment requirements........ 21
Supplies and services...................... 22

Net Revenue..................................... 23

Other Advantages and Disadvantages of Direct
Marketing......................................... 23

Case E.................................................. 24

Background.......... ............................... 24
Revenue. ............................................ 24

Supplies and services .......................... 26

Net Revenue.................. .... ................. 27
Other Advantages and Disadvantages of Direct
Marketing ........................................ 27












Table of Contents--Continued

Page

Consumers Benefits.................................. 27

The Patrons .................................... 28
Transportation.......... ........................ 31
Patrons' Shopping Patterns.......................... 33
Monetary Benefits.............. ................... 33
Freshness and Quality Comparisons ................. 37
Other Advantages and Disadvantages ................. 38
Suggestionf for Improvement........................ 38

CONCLUSIONS........ ............................................ 40

APPENDIX........................................................ 41

REFERENCES....................................................... 50

















LIST OF TABLES

Table Page

1 Annual costs and returns for Grower A's pick-your-own
blueberry operation............... ...... .................... 5

2 Structure and equipment requirements for Grower A's
pick-your-own blueberry operation ............................ 7

3 Annual costs and returns for Grower B's pick-your-own
blueberry operation ........................................... 10

4 Structure and equipment requirements for Grower B's
pick-your-own blueberry operation............................. 12
5 Annual costs and returns for Grower C's pick-your-own
blueberry operation ........................................... 16

6 Structure and equipment requirements for Grower C's
pick-your-own blueberry operation ............................. 17

7 Annual costs and returns for Grower D's pick-your-own
blueberry operation.................................... 20

8 Structure and equipment requirements for Grower D's
pick-your-own blueberry operation............................. 22

9 Annual costs and returns for Grower E's pick-your-own
blueberry operation .............. ......................... 25

10 Structure and equipment requirements for Grower E's
pick-your-own blueberry operation............................ 26
11 Demographic and socioeconomic characteristics of blueberry
PYO patrons ................................................ 29

12 Travel distances and times for blueberry PYO patrons.......... 32

13 Shopping patterns of blueberry PYO patrons..................... 34

14 Consumer expenditures and savings associated with blueberries
purchased at PYO outlets................ ................... .. 36












LIST OF TABLES--Continued

Table Page

15 Consumers' comparisons of freshness and quality of
blueberries bought at PYO outlets and retail food
stores ....................................... ............ 37

16 Respondents' perceived advantages and disadvantages
associated with patronizing blueberry PYO outlets.......... 39

17 Blueberry.PYO patrons' suggestions for improving the
outlet....................................... ............ 40





LIST OF APPENDIX TABLES
Table page

1 Estimated production costs per acre for blueberries during
productive years assuming family labor, 1979................ 41

2 Estimated production costs per acre for blueberries during
bearing years, assuming hired production labor, 1979....... 42


viii
















SUMMARY


Florida has a small but growing rabbiteye blueberry industry.
Small, scattered acreages have precluded the development of commercial
marketing channels. As a result, growers have chosen to market their
blueberries directly to consumers through pick-your-own (PYO) outlets,
and most have been very successful. The case study approach was used to
describe and analyze the PYO operations of five blueberry growers.

In 1979, these growers had from two to twelve acres of blueberries
for PYO operations. All growers charged 60 cents per pound for their
berries, and gross revenues ranged from slightly less than $1,700 to an
estimated $35,100. Growers' investments in marketing facilities and
equipment were relatively modest. The typical PYO blueberry farm used
a few inexpensive outdoor signs for roadside advertising and on-site
customer instructions, a small barn or shelter for sales headquarters, a
work table, and scales for weighing purchases. All growers provided
customers with small buckets for picking.

Expenditures for supplies and services were minimal. All growers
had liability insurance to cover their PYO activities. The premiums for
this insurance ranged from $54 to $211 per year and were based upon
gross revenues. Advertising expenses for the season ranged from $10 to
$250, with newspaper ads the only form of paid advertising. Customers
generally brought their own containers for transporting their berries
home, but most growers provided used grucery bags for those that had no
containers.

Three of the growers hired workers to assist them in operating the
PYO outlet. Most labor was hired on a part-time basis during peak
picking period. Hired labor requirements ranged from 88 to 960 hours
for the season. Considerable marketing labor was provided by the owners
and their families. Because of the varying lengths of the production
season and the number of family members involved in the respective
outlets, family labor requirements varied widely. For the smallest
operation, which also had the shortest season, 364 hours of family labor
were required for the PYO marketing activity. The largest operation,
which also had one of the longest picking seasons, 1,520 hours of family
labor were required to man their PYO business. During the picking
season, most PYO outlets were open from 10 to 12 hours per day, which
accounts for the large family labor requirements. Family marketing
labor is probably overstated in most cases because the PYO business did
not require the operators' undivided attention during slack picking
periods; family members were free to do other things even though they
were required to remain on the premises.













Net return per hour of family labor was the common denominator
used to assess producers' monetary benefits. The highest estimated
return per hour of family labor was slightly over $13.00, and the lowest
slightly over $1.00 per hour. Two producers earned about $9.00 per
hour of their direct marketing efforts, and one earned about $3.00 per
hour.

Most growers felt that marketing their produce directly to con-
sumers through their PYO outlets was their only viable marketing altern-
ative, considering their production volume. A major advantage cited by
growers was smaller capital requirements because of the elimination of
picking, packing and transportation expenses required by other marketing
alternatives. The elimination of picking labor problems was also mention-
ed by several growers as an advantage. One grower said that operating
his farm as a PYO outlet gave him personal control over the business
that other marketing alternatives did not afford. Specifically, he said
that his PYO outlet gave him greater price control as well as a greater
assurance of a ready market for his blueberries. Finally, a grower who
had "retired" was enthusiastic with his PYO business because it gave him
something to do even though his monetary returns were low.

The most frequently mentioned disadvantage was the amount of time
that the PYO outlet demanded. Although managing the PYO activities was
not especially strenuous, the business required that someone oversee it
10 to 12 hours per day, six or seven days per week during the harvest
season. The other disadvantages discussed by growers were people problems.
Some growers found occasional criticism or complaints from customers
irritating. Several growers also mentioned problems with children. They
felt that some parents failed to discipline their children properly,
resulting in wasted berries and damaged plants. Despite the disad-
vantages, the growers were generally pleased with the benefits afforded
by their experiences with direct marketing.

A sample of 31 patrons was interviewed at three of the blueberry
farms. About three-fourths of the customers were female and 60 percent
were 50 years of age or older. In general, the customers were highly
educated and had relatively high incomes. The trip to the PYO outlet
was planned by all customers interviewed; none stopped on impulse.
Customers travelled an average round trip distance of 30 miles which
required an average of 38 minutes. Most of the patrons discovered the
PYO outlet through friends or relatives, although five of the 31 customers
said they found the outlet through newspaper advertisements. About
three-fourths of the interviewees were repeat customers. The trip to
the blueberry PYO outlet was a social activity for many of the shoppers.
About 90 percent had companion shoppers.

The 31 PYO customers purchased an average of approximately 14
pounds of blueberries. Purchases ranged from 4 to 32 pounds. At a
price of 60 cents per pound, the price charged by all farmers inter-
viewed, the average expenditure was $8.50. Customers' estimates of
their monetary savings averaged $8.88 per transaction, but compared with
prevailing prices at area supermarkets, they saved an average of $5.94
per transaction.












Customers rated the freshness and overall quality of the blueberries
obatined at the PYO outlet significantly higher than freshness and
overall quality of blueberries usually found at retail grocery stores.
Price was the primary advantage of shopping at the blueberry PYO operation,
mentioned by a total of 90 percent of those interviewed. Freshness and
quality were mentioned by 65 and 35 percent, respectively. Recreation
was an advantage cited by 19 percent.

For most respondents, patronizing the PYO outlet was a positive
expererice. Only five of Lhe 31 could Lhink uf disadvantdyes Lu shopping
there. The time or effort required was the leading disadvantage.
Respondents were generally pleased with the PYO operations and offered
few suggestions for improvement. PYO outlets offer consumers an opportunity
to obtain fresh, high quality blueberries at prices they feel are reasonable.
















Farmer to Consumer Direct Marketing of Blueberries in Florida:
Producer and Consumer Benefits


INTRODUCTION


In recent years, agricultural experiment stations in the south-

eastern United States have developed improved varieties of rabbiteye

blueberries adapted to Florida's growing conditions, resulting in con-

siderable grower interest and rapid increases in new plantings (Crocker,

Lyrene and Anderson). By 1979 there were approximately 175 bearing

acres of rabbiteye blueberries grown in the state, primarily in the

northern half of Florida. Most bearing acreages were owned by indi-

viduals and were quite small, ranging from approximately one half acre

to slightly over 10 acres.

Due to the small size of the blueberry industry, traditional com-

mercial markets were not available. In 1979, an estimated 95 percent of

the blueberries produced in Florida were marketed directly to consumers.

Most were sold through Pick-Your-Own (PYO) outlets. Limited quantities

were picked by several producers and sold at their PYO locations. Also,

several growers sold limited quantities to small, independent retail

grocery stores.


OBJECTIVES


The basic objective of this study was to determine the nature and

extent of benefits to blueberry producers and to the consumers who

purchase blueberries directly from producers. Specific objectives were

to 1) identify marketing inputs required by the predominant method
















Farmer to Consumer Direct Marketing of Blueberries in Florida:
Producer and Consumer Benefits


INTRODUCTION


In recent years, agricultural experiment stations in the south-

eastern United States have developed improved varieties of rabbiteye

blueberries adapted to Florida's growing conditions, resulting in con-

siderable grower interest and rapid increases in new plantings (Crocker,

Lyrene and Anderson). By 1979 there were approximately 175 bearing

acres of rabbiteye blueberries grown in the state, primarily in the

northern half of Florida. Most bearing acreages were owned by indi-

viduals and were quite small, ranging from approximately one half acre

to slightly over 10 acres.

Due to the small size of the blueberry industry, traditional com-

mercial markets were not available. In 1979, an estimated 95 percent of

the blueberries produced in Florida were marketed directly to consumers.

Most were sold through Pick-Your-Own (PYO) outlets. Limited quantities

were picked by several producers and sold at their PYO locations. Also,

several growers sold limited quantities to small, independent retail

grocery stores.


OBJECTIVES


The basic objective of this study was to determine the nature and

extent of benefits to blueberry producers and to the consumers who

purchase blueberries directly from producers. Specific objectives were

to 1) identify marketing inputs required by the predominant method













of direct marketing; 2) determine marketing costs associated with the

prevailing direct marketing activity; 3) determine farmer net returns

obtained through direct marketing and 4) estimate returns associated

with each input, with particular emphasis on family labor.

Specific consumer-oriented objectives were to 1) determine prices

paid by consumers for blueberries at representative direct marketing

outlets and compare these prices with those paid at supermarkets;2)

determine consumers' perception of blueberry quality at direct marketing

outlets as compared to that obtainable at supermarkets; 3) identify

additional benefits of direct marketing perceived by consumers patroniz-

ing direct marketing outlets and 4) determine demographic character-

istics of direct marketing outlet patrons.


PROCEDURE


The case study approach was utilized to determine producer benefits.

Blueberry producers were identified and located with the assistance of

county agricultural extension agents and state horticultural extension

specialists. Specific growers were then selected to reflect a broad

spectrum of direct marketing activity, particularly with respect to size

and type of operation. Producers were personally interviewed by the

Florida Agricultural Market Research Center staff during June of 1979,

the peak of the harvest season.

Production cost data were obtained from secondary sources and

slightly modified to reflect general production practices used by most

growers (Stegelin and Hewitt). Considerable similarity was discovered

with respect to cultural practices. Thus, with the exception of family













labor and expenditures for hired labor, it was assumed that production

costs were similar for all growers. In some cases, total revenues and

costs of marketing inputs were estimated and used to determine financial

returns whenever growers could not or would not provide primary data.

Growers were also questioned about non-monetary benefits derived from

direct marketing activities.

Consumer benefits were ascertained through personal interviews at

direct marketing outlets. Consumers were selected on a non-probability,

convenience basis, at typical pick-your-own (PYO) outlets. The customer

flow at all PYO outlets was sufficiently slow to allow all patrons to be

interviewed during surveillance periods. Information relating to con-

sumers' purchases, demographic characteristics, shopping patterns, and

transportation were obtained in the interviews. Consumers' monetary

savings were determined by comparing prices paid for blueberries at PYO

outlets with prices prevailing at local grocery stores.


FINDINGS


Producer Benefits of Direct Marketing

Five blueberry growers' case studies are presented because of size

variation encountered among operations. As mentioned previously, the

predominant form of direct marketing for blueberries is the PYO outlet.

Growers' relatively small production of blueberries precluded serious

consideration of commercial marketing prior to and including the 1979

season. Furthermore, consumer demand had been sufficient for most

growers to market their entire production through PYO outlets, although

two growers sold small portions of their crops to local retailers.












Case A


Background


Grower A's blueberry farm is located in a predominantly rural area

near several small towns with populations under 1,000 and about 15 miles

from a city with a population of approximately 75,000. Grower A has

nearly 20 years experience in farming and does an above average job with

respect to growing and marketing blueberries. Because of the varieties

he grows, his blueberry season encompassed a 10-week period, beginning

in June and continuing into August. Ninety percent of his 1979 crop was

marketed through his PYO operation and the remaining 10 percent to

small, local retailers. The costs and returns discussed below reflect

only the portion of his crop marketed through his PYO business. The PYO

business was operated six days per week, Monday through Saturday, from

8:00 a.m. to 7:00 p.m.


Revenue


Grower A devoted 11.7 acres to his PYO operation which yielded an

average of 2.5 tons per acre, for a total of 58,500 pounds of blue-

berries. He charged consumers 60 cents per pound for all berries harvest-

ed during the season, resulting in a total revenue of $35,100. No

quantity discounts were offered, and no other items were sold to con-

sumers at the PYO outlet (Table 1).


Costs


Production costs


Grower A's production costs, exclusive of labor, were estimated at

$538 per acre. Production costs excluded labor because no hired labor













Table l.--Annual costs and returns for Grower A's pick-your-own blueberry
operation.


Costs or returns


------ Dollars -----
Gross revenue


Blueberry sales


Costs


Production costs


58,500 pounds @ $0.60



11.7 acres @ $538a


Marketing costs

Structures and equipment
Barn
Buckets
Signs
Table
Scales
Interest on capital
Total, structures and equipment

Supplies and services
Liability insurance
Taxes and insurance on structures
Advertising
Utilities
Total, supplies and services


Hired labor


400 hours @ $3.05


342
88
10
8
7
712
1,167


211
171
250
15
647

1,220


Total marketing cost

Net Revenue


Family labor


Production 11.7 acres @ 38 hours
Marketing
Total family labor

Net return per hour of family labor


445
1,520
1,965


13.12


See Appendix Table 1 for detailed production costs.


Item


35,100



6,295


3,034

25,771


--












was utilized. Family labor returns from production and marketing

activities were treated as a residual and are discussed in a later

section. Production costs included all fertilizer, pesticides, her-

bicides, machinery and irrigation, loss and depreciation of plants, as

well as an opportunity cost of 10 percent on the original investment in

plants, land, and operating capital (Stegelin and Hewitt).

Marketing costs


Structure and equipment requirements.--Structure and equipment

requirements for Grower A's PYO blueberry operation were minimal (Table

2). A small barn located adjacent to the blueberry field served as d

central sales area. Upon arrival at the central sales area, customers

were issued small plastic or metal buckets for picking. Customers were

then escorted to the field and assigned to a specific picking area.

After customers had finished picking, they returned to the central sales

area where the berries were weighed; all berries were sold on a weight

basis. Three small kitchen scales were located on a weighing and assembly

table. After weighing, blueberries were transferred to customer's

containers brought from home or to used cardboard boxes which Grower A

obtained from grocery stores free of charge.

The only other equipment used in the PYO operation consisted of two
homemade plywood signs which measured approximately 4' X 4'. These

signs were located beside a major highway near the farm to attract

customers and to give directions to the farm.

Grower A's total investment in the marketing structure and equip-

ment was placed at $7,118. His opportunity cost on his investment was

estimated to be 10 percent per annum, or $712. The depreciable life of












Table 2.--Structure and equipment requirements for Grower A's pick-your-own
blueberry operation.



Depreciable Price/ Total
Description Quantity life unit investment


Number Years ---- Dollars -----

Barn, 1,028 sq. ft. 1 20 6,836.00 6,836

Buckets 400 2 0.44 176

Signs 2 3 15.00 30

Table 1 5 40.00 40

Scales 3 5 12.00 36


Total investment 7,118


Interest on capital @ 10 percent per annum 712


a
Straight line depreciation is calculated for all items, assuming no
salvage value.


the barn was estimated at 20 years, while the buckets were expected to

last only two years. Depreciation of the outdoor signs was based on an

expected useful life of three years. Annual marketing costs for the

structure and equipment were comprised of annual depreciation plus the

interest on the total investment and repairs, where applicable. For

Grower A, this amounted to $1,167 (Table 2).

Supplies and services.--Liability insurance which covered the PYO

outlet, taxes and insurance on the barn, and advertising were the major

components of Grower A's expenditures for supplies and services, amount-

ing to $211, $171, and $250 per year, respectively.












The advertising budget was spent exclusively for ads placed in

local newspapers during the peak harvest season. Utilities for the

sales center were estimated at only $15 for the ten week marketing

period (Table 1).

Hired labor.--One person was hired to help supervise the PYO

operation. This person worked forty hours per week for the ten week

harvest season at a wage rate (including F.I.C.A. taxes and Workman's

Compensation insurance premiums) of $3.05 per hour. Thus, Grower A's

expenditure for hired marketing labor was $1,220 (Table 1).

Net Returns


Total production costs of $6,295 and marketing costs of $3,034 were

deducted from gross revenue of $35,100 resulting in a net revenue of

$25,711 per year. The total amount of family labor expended in the

operation during the year was 1,965 hours, 445 in production activities

and 1,520 in direct marketing. The resulting net return per hour of

family labor attributable to direct marketing was $13.12 (Table 1).

Other Advantages and Disadvantages of Direct Marketing

Grower A felt that his PYO method of marketing was the only econom-

ically feasible alternative because of his small volume of production.

He cited the small capital requirements as an advantage. He felt that an

attempt to enter the commercial market would require a substantially

greater investment in picking, packing and transportation equipment.

The only disadvantage involved in direct marketing reported by Grower A

was the large amount of family labor required.











Case B


Background


Grower B's blueberry farm is located several miles from a small

town which has a population of about 4,000 and about 10 miles from a

city with a population of approximately 75,000. His blueberry season

included the eight week period in June and July. Approximately 90

percent of his 1979 crop was marketed through his PYO operation and the

remainder was sold to small retail food stores. The PYO business was

operated about 11 hours per day, 8:00 a.m. until dusk, Tuesday through

Saturday, and one-half day on Sunday.


Revenue


The 4.5 acres of blueberries grown by Grower B for his PYO operation

yielded an estimated 2.5 tons per acre. The 22,500 pounds was sold to

PYO patrons at 60 cents per pound, resulting in a total revenue of

$13,500. No other items were sold to consumers during the blueberry

season (Table 3).


Costs


Production costs


Grower B's production costs were estimated at $538 per acre because

he and his family provided all production labor (Appendix Table 1).

Production costs included all fertilizer, pesticides, herbicides,

machinery and irrigation, loss and depreciation of plants, land, and

opportunity costs on operating capital.








10




Table 3.--Annual costs and returns for Grower B's pick-your-own blueberry
operation.


Costs or returns


--------- Dollars -------


Gross revenue

Blueberry sales


22,500 pounds @ $0.60


Costs


Production costs


4.5 acres @ $538


Marketing costs

Structures and equipment
Pole barn
Portable building
Signs
Buckets
Scales
Interest on capital
Total, structures and equipment

Supplies and services
Liability insurance
Tax and insurance on structure
Advertising
Total, supplies and services


Hired labor


88 hrs. @$1.72


Total marketing costs

Net revenue


Family labor


Production
Marketing
Total family labor


4.5 acres @ 38 hours


171 hours
960 hours
1,131 hours


Net returns per hour of family labor


See Appendix Appendix 1 for detailed production costs.


Item


13,500



2,421


1,089

9,990


8.83













Marketing costs


Structure and equipment requirements.--Grower B used two small

buildings in his pick-your-own operation. One was a small, low main-

tenance pole barn used as a central sales headquarters located near the

entrance of the blueberry field, and the other a small portable building

which was used as a shelter for field supervisors and also as a sales

area. Upon arrival at the blueberry farm customers were issued small

metal buckets for picking. Due to the relatively small size of Grower

B's PYO operation, 100 buckets were sufficient (Table 4). A heavy duty
hanging scale was used for weighing customers' purchases. Grower D had

two medium-sized (3' X 5') signs which were located adjacent to a road

near the farm to attract customers and give directions to the farm. One

was a professionally lettered sign, and the other homemade; the two

signs had an estimated total value of $85. He also used seven small

homemade directional signs valued at $2 each. Grower B's total in-

vestment in signs was estimated at $99 (Table 4). Grower B's total

investment in marketing equipment was estimated at $3,654.

The depreciable life of the permanent pole barn was estimated at 20

years while the life expectancy of the small portable building was

estimated at only ten years. The signs were expected to last three

years, and the heavy-duty buckets and scales five years each. Annual

marketing costs for the structures and equipment were comprised of

annual depreciation plus the interest on total investment and repairs

where applicable. For Grower B this amounted to $622 (Table 3).














Table 4.--Structure and equipment requirements for Grower B's pick-your-
own blueberry operation.



Depreciable Price/ Total
Description Quantity life unit investment


Number Years ---- Dollars ----

Pole barn, 450 sq. ft. 1 20 3,150.00 3,150

Portable building,
48 sq. ft. 1 10 250.00 250

Signs 9 3 Various 99

Rockets 100 5 1.25 125

Scale 1 5 30.00 30


Total investment 3,654



Interest on capital @ 10 percent per annum 365


a
Straight line depreciation is calculated for all items,
salvage value.


assuming no


Supplies and services.--Grower B spent $315 for supplies and services.

This included liability insurance on the PYO operation, taxes and in-

surance on the permanent barn, and advertising. Advertising consisted

of small newspaper ads placed in local papers during the harvest season.

No other supplies were used in the operation. Many customers had patron-

ized Grower B's blueberry PYO operation in previous seasons and had been

asked to provide their own containers. However, Grower B did provide

used grocery bags for customers that failed to provide their own con-

tainers.












In addition to the marketing labor expended by Grower B and another

family member, it was necessary to hire a part-time employee to assist

with supervision and customer transactions for one day per week during

the harvest season. The part-time employee earned $152 over the season

(Table 3).

Net Revenue

When production costs of $2,421 and total marketing costs of $1,089

were deducted from revenue generated by blueberry sales through the PYO

outlet, the net revenue attributable to the family's labor was $9,990

(Table 3). Production activities for the 4.5 acres of blueberries re-

quired an estimated 171 hours of family labor and the PYO marketing

required an additional 960 hours for a total of 1,131 hours of family

labor. The resulting net return per hour of family labor was $8.83

(Table 3).


Other Advantages and Disadvantages of Direct Marketing


Grower B indicated that the primary advantage of operating his PYO

business was the elimination of harvesting labor problems. He also felt

that marketing his produce directly to consumers required substantially

less capital for harvesting and transportation equipment. He was also

under the impression that an attempt to pack his fruit for the commercial

market would require compliance with extensive, rigid and expensive

sanitation requirements.

The major complaint voiced by Grower B was the long hours required

to operate the PYO outlet during the harvest season. He cited as a











second disadvantage "people problems" which arose when large crowds

converged on his farm on peak harvesting days. Typical problems were

damage to plants by unruly children and customer gripes about being

assigned to specific picking areas.


Case C


Background


Grower C's five acre blueberry farm is located in a rural area that

is experiencing considerable residential development. It is approximate-

ly ten miles from a north central Florida town with a estimated population

of 35,000. Grower C is an absentee owner. He uses hired labor for all

production activity, but during the summer harvest period, a member of

the family manages the blueberry farm.

The harvest season for Grower C's blueberries covers an eight week

period during the months of June and July. All production is sold

through the PYO operation. During a typical marketing season, the PYO

operation would be open for business seven days per week, 10 1/2 hours

per day. During the 1979 season, poor yields reduced operating days to

three per week. The PYO operation was operated from 8:00 a.m. until

6:30 p.m. Monday through Wednesday.

Revenue


In 1979, Grower C's five acres yielded an estimated 17,000 pounds

of blueberries, an average of 3,400 pounds per acre, which was substantially

below previous years' production. All berries were sold at 60 cents per

pound yielding a total revenue of $10,200. No other items were sold at











the PYO blueberry outlet, but they allowed a friend to sell honey occasion-

ally. However, Grower C received no rent or commission on honey sales.


Costs

Production costs


Grower C's basic production practices and resulting production

costs were similar to other blueberry growers interviewed with one

exception. Because of absentee ownership, Grower C incurred an estimated

38 hours of hired production labor expense per acre, resulting in a

total production cost of $679 per acre. As with other growers, pro-

duction costs included all fertilizer, pesticide, herbicides, machinery

and irrigation, loss and depreciation of plants as well as an opportunity

cost of 10 percent on the original investment in plants, land and operat-

ing capital (Appendix Table 1). Grower C's total production costs were

nearly $3,400 (Table 5).


Marketing costs


Structure and equipment requirements.--Grower C's expenses for

structure and equipment were very similar to those of other growers. A

small permanent awning (pole construction) served as a central sales

area. Two heavy-duty kitchen scales were used to weigh customers'

purchases. Only 20 plastic buckets were available; most customers had

patronized the PYO previously, and knew to bring their own containers.

The only signs used by Grower C were four very small, inexpensive home-

made signs valued at $2 each. His total investment for the sales structure

and equipment amounted to $1,323, resulting in opportunity costs of

















Table 5.--Annual costs and returns for Grower C's pick-your-own blueberry
operation.


Item


Costs or returns


---------- Dollars ------


Gross revenue

Blueberry sales 17,000 pounds @'$0.60

Costs

Production costs 5.0 acres @ $679

Marketing costs

Structures and equipment
Awning
Auto
Scales
Buckets
Signs
Interest on capital
Total, structures and equipment

Supplies and services
Liability insurance
Advertising
Total, supplies and services

Hired labor 960 hours @ $2.50

Total marketing costs

Net revenue

Family labor

Marketing

Net returns per hour of family labor


10,200



3,395


60
237
20
5
4
132
458


66
10
76

2,662


3,196

3,609


400 hours


9.02













$132. The depreciable life of the awning was estimated at 20 years,

while the kitchen scales were expected to last five years, the buckets

three, and the signs only two years. In addition to these structure and

equipment expenses, Grower C incurred daily automobile transportation

expenses from a temporary residence to the blueberry farm during the

marketing season. His season mileage was estimated at 1,280 miles, and

expenses were calculated at 18.5 cents per mile. The annual structure

and equipment expenses, including transportation to the farm, were esti-

mated at $458 (Table 6).


Table 6.--Structure and equipment requirements for Grower C's pick-your-own
blueberry operation.


Description


Quantity


Awning, 240 sq. ft.

Scales

buckets

Signs


Total investment


Number

1


Depreciable
life


Years

20


Price/ Total
unit investment

----- Dollars -----

1,200.00 1,200

50.00 100

0.75 15

2.00 8


1,323


Interest on capital @ 10 percent per annum


a
Straight line depreciation is calculated for all items, assuming no
salvage value.


Supplies and services.--Liability insurance and advertising were

the only two expenditures in this category. The premium for liability


---













insurance on the PYO business was estimated at $66. Because of the poor

yields in 1979, advertising amounted to only $10, spent for one local

newspaper ad (Table 5).

Hired labor.--Because of the crowds that converged on the blueberry

farm, four part-time people were hired as supervisors and cashiers. The

four employees worked ten hours per day, three days per week during the

eight week harvest season. Grower C's total expense for hired labor was

$2,662 (Table 5).

Net Revenue

When production costs and marketing costs were deducted from Grower

C's gross revenue in 1979, $3,609 remained (Tdble 5). Four hundred

hours of family labor were expended in the direct marketing operation.
The resulting net return per hour of family labor due to direct marketing

was $9.02 (Table 5).


Other Advantages and Disadvantages of Direct Marketing


Like other growers, Grower C felt that opportunities in traditional

commercial market channels were limited for his production. Direct

marketing provided with a means to profitably market his produce. The

only disadvantage he cited was having to contend with the general public.


Case D


Background


Grower D's six acre blueberry farm is located in the same general

area as Grower A's farm, in a predominantly rural area near several

small towns with populations under 1,000, but only about 15 miles from a












city with a population of approximately 75,000. Grower D is an experi-

enced farmer who has engaged in direct marketing for almost ten years.

All of his 1979 blueberry crop was marketed directly to consumers. His

PYO business was operated six days per week, Monday through Saturday.

Because of the blueberry varieties grown by Grower D, his harvest season

lasted 12 weeks, a period beginning in May and lasting well into July.

In addition to selling blueberries to customers, Grower D also grew

sweet corn and cantaloupes. These crops were produced primarily for

home consumption, but excess quantities were sold to blueberry PYO

patrons. Grower D also had a few bee hives, and honey was sold. His

major emphasis was on blueberries, and revenue from the corn, melons

and honey was relatively minor, amounting to only a few hundred

dollars per year.


Revenue


Grower D's six acres of blueberries were comprised of about equal

proportions of mature and young bushes. Compared to other blueberry

growers yields, Grower D's production was relatively low, due to the

lower yielding immature bushes. In 1979, his yield averaged about four

pounds per bush, or 2,400 pounds per acre. His six acres yielded an

estimated total production of 14,400 pounds, which he sold at 60 cents

per pound, for a gross revenue of $8,640 (Table 7).














Table 7.--Annual costs and returns
blueberry operation.


for Grower D's pick-your-own


Item


Costs or returns


----- Dollars -----

Revenue


Blueberry sales


14,400 pounds @ $0.60


Costs


Production costs

Marketing costs


6.0 acres @ $538


Structures and equipment
Pole Barn
Plastic buckets
Scales
Signs
Table
Cash box
Interest on capital
Total, structures and equipment

Supplies and services
Liability insurance
Taxes and insurance (structure)
Advertising
Total, supplies and services


Hired labor


none


Total marketing costs

Net revenue

Family labor


Production
Marketing
Total family labor


6.0 acres @ 38 hours


228 hours
1,296 hours
1,524 hours


Net return per hour of family labor


8,640



3,228


756


4,656


3.06











Costs

Production costs


Grower D's production costs were also estimated to be $538 per

acre, like those of other growers. Production costs excluded
labor because none was hired. As with previous cases, fdmiily labor

returns from both production and marketing activities were treated as a

residual and are discussed below. Production costs included all ferti-

lizer, pesticides, herbicides, machinery and irrigation, loss and de-

preciation of plants, as well as an opportunity cost of 10 percent on

the original investment in plants, land and operating capital (Appendix

Table 1).

Marketing costs

Structure and equipment requirements.--Structure and equipment re-

quirements for Grower D's operation were very similar to other growers.

A 600 square foot pole barn served as sales headquarters. PYO patrons

were furnished plastic buckets for picking, although they were required

to bring their own containers for transporting their berries home.

Grower D had 100 plastic pails which he valued at 75 cents each. He used

a heavy duty produce scale placed on a table for weighing all purchases.
Two small inexpensive homemade signs consLituLed the remainder of his

direct marketing equipment. Grower D's total investment in his PYO

blueberry operation amounted to slightly over $3,200, resulting in an

opportunity cost of $322 (Table 8). Annual marketing costs associated
with the structure and equipment were based on annual straight line

depreciation, interest on the total investment, plus repairs where














Table 8.--Structure and equipment requirements for Grower D's pick-your-own
blueberry operation.



Depreciable Price/ Total
Description Quantity life unit investment


Number Years ----- Dollars ----
Pole barn, 600 sq. ft. 1 25 5.00 3,000

Plastic buckets 100 2 0.75 75

Scale 1 5 80.00 80

Table 1 5 30.00 30

Cash box 1 5 10.00 10

Signs 2 3 10.00 20


Total investment 3 215

Interest on capital @ 10 percent per annum 322


a
Straight line depreciation
salvage value.


is calculated for all times, assuming no


applicable. The depreciable lives on Grower D's pole barn and marketing

equipment were assumed to be similar to that of other growers. His total

annual expenses for structures and equipment were $511 (Table 7).

Supplies and services.--Liability insurance on the PYO operation,

taxes and insurance on the barn used for the sales headquarters, and

advertising constituted the only expenditures in this category. His

premiums for liability insurance and fire casualty insurance were com-

parable to those paid by other blueberry growers with similar oper-

ations. However, his expenditures for advertising were greater than most











other growers. Grower D placed a small ad in a local paper three days

per week at a cost of $11 over an eight week period, for a total expend-

iture of $88.

Grower D and his wife were able to manage the PYO operation effective-

ly without hiring additional labor. Thus, their expenditures for supplies

and services and the costs associated with their structures and equip-

ment were the only marketing costs incurred, a total of $756.

Net Revenue

Total production costs of $3,228 and marketing costs of $756 were

deducted from gross revenues of $8,640. resulting in a net revenue of

$4,656 (Table 7). Grower D and his wife spent a total of 1,524 hours

operating the blueberry farm, and estimated 228 hours in production

activities, and the balance of 1,296 hours engaged in managing the PYO

business. Thus, Grower D and his wife earned an estimated $3.06 per

hour for their labor.

Other Advantages and Disadvantages of Direct Marketing

According to Grower D, the primary advantage associated with his

PYO blueberry operation was the lack of labor problems. He also cited

as an advantage the personal control that he could exercise over his
business. Another advantage mentioned by Grower D was the existence of

a market for his product, which was not subject to the vagaries and

price uncertainties associated with the commercial produce market. The

only disadvantage voiced by Grower D concerned patrons' children. He

complained that children damaged the blueberry plants and tended to

disrupt operations.











Case E


Background


Grower E's two acre blueberry farm is located approximately ten

miles from both a small town with a population of about 4,000 and a city

with a population of 75,000. Grower E is retired, and operates his

small blueberry farm as a hobby and a retirement income supplement. He

has operated his PYO business for approximately three years. During the

first two bearing seasons, friends and acquaintances purchased his

entire production. Only in the 1979 season did yields reach the point

where he needed additional customers to absorb his production.

Grower E sold approximately 70 percent of his production to PYO

patrons. He personally picked the remaining 30 percent, which his wife

sold to her friends. Because of the varieties grown by Grower E, the

PYO business was operated only in the month of June. It was open seven

days per week, from 7:00 a.m. to dusk, approximately 13 hours per day.


Revenue


Seventy percent of Grower E's production, 1,820 pounds, was sold

through the PYO operation at a price of 60 cents per pound for a total

revenue of $1,092. The remaining 30 percent of his production, 780

pounds, was picked by Grower E in his spare time, as he supervised the

PYO activity. These berries were sold by Grower E's wife to friends and

acquaintances for 75 cents per pound, resulting in additional revenue of

$585. Their total gross revenue was $1,677 (Table 9).












Table 9.--Annual costs and returns for Grower E's pick-your-own blueberry
operation.


Costs or returns


------- Dollars -------


Revenue


Blueberry sales


Costs


Production costs

Marketing costs


2,600 pounds @ $64.5



2.0 acres @ $533


Structures and equipment
Scale
Signs
Plastic buckets
Table
Interest on capital
Total, structures and equipment

Supplies and services
Liability insurance
Advertising
Total supplies and services


Hired labor


none


Total marketing costs
Net revenue


Family labor


Production
Marketing
Total family labor


2.0 acres @ 38 hours


Net return per hour of family labor


Item


1,677



1,076


506


76 hours
364 hours
440 hours


1.15













Table 10.--Structure and equipment requirements for Grower E's pick-your-own
blueberry operation.



Depreciable Price/ Total
Description Quantity life unit investment


Number Years ---- Dollars -----

Scale 1 5 55.00 55

Signs 6 3 5.00 30

Plastic buckets 20 3 1.35 27

Table 1 5 20.00 20


Total investment 132



Interest on capital @ 10 percent per annum 13


a
Straight line depreciation
salvage value.


is calculated for all items assuming no


Supplies and services.--Liability insurance for the PYO operation

and newspaper advertising were the only two expenditures incurred by

Grower F for supplies and services. Because of his relatively low sales

volume, his liability insurance premium was estimated at only $10. His

advertising expense was $38, the cost of running one small ad for one

month in a local newspaper (Table 9).

Grower E's total marketing costs were comprised of his equipment

costs and his supplies and services. He and his wife hired no additional

labor to assist with the marketing of their crop. Thus, their total

marketing costs amounted to only $95 for the season.












Net Revenue

When production costs of $1,076 and marketing costs of $95 were

deducted from Grower E's gross revenue, the resulting net revenue was

$506. Grower E and his wife spent about 76 hours engaged in production

activities and an additional 364 hours engaged in imrketiny labor, for a

total family input of 440 hours. Their net return per hour of family

labor was estimated to be $1.15 (Table 9). While the returns per hour

of family labor appear to be relatively low, the number of hours re-

portedly spent manning the business were a major cause. Although

managing the PYO outlet required Grower E's presence imposing restric-
tions on his personal freedom to come and go at will, much of the time

spent required little activity.

Other Advantages and Disadvantages of Direct Marketing

The primary advantage to direct marketing cited by Grower E was

that it gave him something to do. Because he was retired, the blueberry

farm constituted an important hobby which resulted in additional income.
The only disadvantage mentioned by Grower E was the long hours required

for operating the PYO portion of the business.


Consumer Benefits

Time and resource constraints precluded obtaining a large, random

sample of blueberry farm patrons. In keeping with the case study approach

prescribed by USDA-ESCS, a relatively small number of customers was

interviewed. A non-probability, convenience sample of 31 patrons was

interviewed at three of the blueberry farms described previously. All

interviews were obtained during weekdays, between the hours of 9:00 A.M.













and 6:00 P.M. In most cases, the customer traffic flow was sufficiently

slow and the questionnaire brief enough so that all customer could be

interviewed during the surveillance periods.

Despite the smaple's limitations, it is felt that the interviews

provide a reasonable representation of customers typically patronizing

this type of outlet. The sample is thought to yield a valid assessment

of the qualitative and quantitative benefits accruing to customers of

blueberry PYO outlets.

The following sections describe the demographic composition of the

sample, and patrons transportation and PYO outlet shopping patterns.

Customers' monetary benefits and other perceived shopping advantages and
disadvantages are also discussed, along with customers' suggestions for

improving the blueberry PYO outlets.

The Patrons

About three-fourths of the patrons were female, and over 60 percent

were 50 years of age or older. Few young people were interviewed at the

blueberry farms; less than 10 percent of the customers were under 35

years of age. In general, the customers were highly educated. Over

half had attended college, compared with about 30 percent of the population

of Florida, and 35 percent had attended college four or more years,

compared with 14 percent statewide (Thompson, 1979). Only two of the

respondents had completed less than twelve years of schooling (Table

11). The proximity of the PYO outlets to a major university was undoubtedly

the primary reason for the high proportion of college educated customers.
Most PYO customers came from small households. Slightly over half

came from two-person households, and about one-fourth came from three-person












Table 11.--Demographic and socioeconomic characteristics of blueberry PYO
patrons.



Characteristic Number Percenta


Sex of purchaser

Male
Female
Totals

Age of purchaser

18-24
25-34
35-49
50-64
65+
Totals

Years of education


Less than 12
12
13-15
16 or more
Totals

Number of persons in household

One
Two
Three
Four
More than four
Totals

Employment

Employed
Retired
Unemployed
Totals

Marital status

Married
Single
Totals


45
52
3
100












Table 11.--Demographic and socioeconomic characteristics of blueberry PYO
patrons.--Continued.


Characteristic Number Percenta


Income

Under $8,000 5 17
$8,000-9,999 1 3
$10,000-14,999 4 14
$15,000-24,999 9 31
$25,000+ 10 34
Totals 29 To

Race

White (non-Hispanic) 29 94
White (Hispanic) 0 0
Black (non-Hispanic) 2 6
Totals 31 100

Residency

Permanent 27 87
Temporary 4 13
Totals 31 100


May not sum to 100 percent because of rounding.












households. The remaining 25 percent were equally divided between one-

and four-person households. None of the respondents lived in a house-

hold which contained more than four persons. Slightly over half of the

interviewees were retired, slightly less than half were employed, and

one person was unemployed. Slightly over three-fourths of the respondents

were married.

Patrons' incomes were relatively high compared to those reported

for the population of the counties in which the blueberry farms were

located. The sample contained a disproportionately small number of low

income households, that is under $8,000 per year, and over twice as many

households with incomes in excess of $25,000 (Sales and Marketing

Management).

With respect to race, the sample contained a disproportionately

large number of whites. Although whites constitute approximately 82

percent of the population in the counties where the blueberry PYO oper-

ations were located, whites constituted 94 percent of the sample. Only

two of the 31 customers were black. Most of the customers were Florida

residents, although four persons, or 13 percent, were visitors or temporary

residents.


Transportation

Personal automobiles were the only means of transportation used by

blueberry PYO patrons. Most of the customers, 29 of the 31, indicated

that the trip to the PYO outlet was a special trip from their residence;

no other activities were conducted in conjunction with the trip. Two
customers combined other activities with their trip to the PYO outlet.

Customers that made a special trip from their residence to the blueberry











PYO outlet traveled an average round trip distance of 32 miles. The

minimum round trip distance was 10 miles, and the maximum 150 miles

(Table 12).


Table 12.--Travel distances


and times for blueberry PYO patrons.


Type of trip/ Number of Distance or time
distance, time required observations Average Minimum Maximum


----- Miles or minutes ---

Special trip from resident
to PYO outlet

Miles traveled 29 32 10 150
Driving time 29 40 15 180

Combination trip

Miles traveled 2 9 8 10
Driving time 2 14 12 15

All trips

Miles traveled 31 30 8 150
Driving time 31 38 12 180


a
Combination trips included activities in addition to the PYO visit.
The figures reflect patrons' marginal expenditure of mileage and driving
time attributable to the PYO activity.


For those customers that combined other activities with their trip

to the PYO outlet, their marginal expenditures of mileage and driving

time attributable to the PYO activity were determined. One reported a

round trip distance of 8 miles and the other 10, requiring driving time

of 12 and 15 minutes respectively. The average round trip distance

traveled by all cusLomers was 30 miles, requiring an average of 38

minutes.












Patrons' Shopping Patterns


The majority of the customers, about 80 percent, discovered the

outlet through friends or relatives, i.e., word-of-mouth. Although all

outlets used road signs for advertising, none of the patrons credited

them with their introduction to the outlet. All three outlets where

interviews were conducted engaged in limited newspaper advertising, and

five of the 31 customers said they discovered the outlet through news-

paper advertisements. Only one person could not recall how the outlet

was discovered (Table 13).

About three-fourths of the interviewees had previously patronized

the PYO outlet where contacted. Most said they patronized the outlet

only once each year, but almost one-third said they visited it two or

three times per season. About half of the customers said they typically

visit at least one other blueberry PYO operation during the harvest

season.

Only three of the 31 shoppers came to the blueberry PYO outlet

alone. Almost half brought another shopper with them, and one-third

brought three or more additional customers with them. Thus it appears

that the trip to the PYO outlet was a social activity for most patrons.

Furthermore, the trip was planned, and not an impulse activity (Table

13).

Monetary Benefits


Each of the 31 PYO customers purchased an average of approximately

14 pounds of blueberries. The minimum purchase was four pounds and the

maximum 32. All five PYO outlets charged 60 cents per pound, and no

quantity discounts were offered. Purchases ranged from $2.40 to $19.20,

with the average expenditure $8.50 (Table 14).














Table 13.--Shopping patterns of blueberry PYO patrons.



Question/responsesd Number Percentb


How did you discover this outlet?

Roadsigns 0 0
Newspaper ads 5 16
Word-of-mouth 25 81
Do not recall 1 3
Totals 31 100

Have you patronized this outlet before?

Yes 23 74
No 8 26
Totals 3T TOO

How often do you patronize this outlet each year?

One 17 71
Two 4 17
Three 3 13
More than three 0 0
Totals 24 100

How many similar outlets have you patronized
during the past year?

None 14 45
One 8 26
Two 3 10
Three 4 13
More than three 2 6
Totals 31 100

How many shoppers in your party?

One 3 10
Two 14 45
Three 9 29
More than three .5 16
Totals 31 100













Tabl1 13.--Shopping patterns of blueberry PYO patrons--Continued.


Question/responsesa Number Percentb


Was your purchase planned?

Yes 31 100
No 0 0
Totals 31 100

a
Questions about some aspects of shopping behavior have been abbreviat-
ed or paraphrased for inclusion here. See questionnaire in Appendix.

b
May not sum to 100 percent due to rounding.


The PYO customers were asked to estimate retail prices of blueberries.

However only one-fourth of the respondents had purchased blueberries in

retail stores during the current season. Thus, a large proportion were

unable or unwilling to estimate retail prices. The sixteen respondents

that did expected to pay an average of $1.20 per pound for them. The

expected prices ranged from 83 cents to $1.70 per pound. The retail

price observed in stores of two leading super market chains during the

time period during which the PYO customer interviews were conducted was

99 cents per pound in all stores. Thus, PYO customers tended to overestimate

their dollar savings.

On the average the patrons estimated that they saved $8.88 per

transaction. But, compared with prevailing prices they saved an average

of $5.94 per transaction. These "actual" savings ranged from $1.56 to

$11.70 per transaction. The average difference between the PYO outlet

price and the prevailing retail price for all 31 customers amounted to

hypothetical savings of $5.54 per transaction.

















Table 14.--Consumer expenditures and savings associated with blueberries
purchased at PYO outlets.



Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 31 14.2 4 32

Total expenditure Dollars 31 8.50 2.40 19.20

Price per pound at
PYO outlets 5 0.60 0.60 0.60

Expected retail price
per pound 16 1.20 0.83 1.70

Observed retail price
per pounda "2 0.99 0.99 0.99

Expected savings per
transaction 16 8.88 1.61 26.10

Actual savings 16 5.94 1.56 11.70

Hypothetical savings
at average, minimum
and maximum observed
PYO outlet prices 5.54 5.54 5.54


a
Retail prices were observed in two major retail supermarket chains
during the time period customer interviews were conducted.

b
Hypothetical savings are based upon the average quantity purchased
by the 31 customers at the indicated price levels.














It is important to note, however, that the "actual" and hypothetical

"savings" discussed here do not take into account transportation expenditures

or time spent in driving to the PYO outlet and in picking blueberries.


Freshness and Quality Comparisons


PYO outlet customers were asked to rate freshness and overall

quality of the blueberries obtained at the PYO outlet and blueberries

usually found at retail grocery stores. Ratings were based on a nine-

point rating scale where one represented "excellent" and nine repre-

sented "extremely poor". The average ratings for freshness and overall

quality were 1.1 and 1.2 respectively for the blueberries purchased at

the PYO outlets, but only 5.6 and 5.4 for blueberries typically purchas-

ed at retail grocery stores. A paired t-test indicated that the freshness

and overall quality rating differences were statistically significant

(Table 15).


Table 15.--Consumers' comparisons of freshness and quality of blueberries
bought at PYO outlets and retail food stores.


Rating by source
Attribute PYO Retail grocery t-statisticb

Freshness 1.0 5.6 14.28

Overall quality 1.2 5.4 8.43


a
Ratings were based on a nine point scale where 1 = excellent and
9 = extremely poor. There were 13 observations for both attributes.
b
A paired t test was used to determine whether or not rating by
source were significantly different. Both were statistically significant
at the 0.01 probability level.











Other Advantages and Disadvantages

Customers were also asked to enumerate the advantages and dis-

advantages associated with patronizing blueberry PYO outlets. Price was

the primary advantage mentioned by over half of the respondents; in

total, 90 percent of those interviewed cited price as an advnatage.

Freshness was the next most frequently mentioned advantage, cited by a

total of 65 percent of the respondents. Quality and recreation were

advantages mentioned by a total 35 and 19 percent of the respondents

respectively (Table 16). Twenty-six of the 31 respondents could cite no

disadvantages associated with patronizing the blueberry PYO operation.

Four respondents, 13 percent, mentioned the time or effort required as a

disadvantage, and one customer complained of the lack of restroom facilities

(Table 16). No respondent mentioned more than one disadvantage.

Suggestions for Improvement


Respondents were generally pleased with the PYO operations. Twenty-

seven of the 31 customers, 87 percent, made no suggestions for improvement.

Four suggestions were made by four different shoppers. One said the PYO

operator should provide more supervision, specifically to identify areas

where picking was best. Another felt restroom facilities should be

provided and one customer suggested more advertising as a means to

communicate picking dates and general quality information. Another

suggested that the farmer encourage the blueberry bushes to grow taller

to eliminate the necessity of stooping while picking, a suggestion that

is undoubtedly easier to make than to adopt (Table 17).









39

Table 16.--Respondents' perceived advantages and disadvantages associated
with patronizing blueberry PYO outlets.



Advantages/disadvantages Number First response All responses


------------------ Percenta ...........

Advantages 17 55 90

Price 17 55 90
Freshness 9 29 65
Quality 2 6 35
Recreation 3 10 19
----b
Total 3T 100 --

Disadvantages

None 26 84
Time or effort required 4 13 ---
No restroom 1 3 ---

Total --
Total 31 100 -


a
Percentages were based on 31 observations.

b
Percentages were not summed because of multiple responses.

c
No respondent mentioned more than one disadvantage.











Table 17.--Blueberry PYO patrons' suggestions for improving the outlet.



Suggestions Number Percent


No improvement necessary 27 87

Provide more supervision 1 3

Provide restrooms 1 3

Advertise more 1 3

Encourage bushes to grow taller to eliminate
necessity of stooping while picking 1 3


Totals 31 100a

percentage does not sum to 100 due to rounding.












CONCLUSIONS


In 1979, traditional commercial markets for Florida grown blueberries

did not exist. The only practical marketing alternative available to

most growers was to sell their grapes directly to consumers through

pick-your-own operations. This alternative does not generally require

a large capital investment in marketing equipment and related activities,

but it does require considerable personal time or hired labor and it

must be accessible to customers. Blueberry growers with mature plant-

ings generally had favorable returns; all growers were able to sell
their entire production through their PYO operations.

The blueberry PYO operations afforded consumers a number of ad-
vantdges as well. Product quality and freshness, monetary savings, and

recreation were the most important benefits. On the average, consumers

saved nearly six dollars per transaction, if personal time and trans-

portation are ignored. In general, the PYO operation provided positive

experiences for growers and consumers-alike.









































APPENDIX












Appendix Table l.--Estimated production costs per acre for blueberries
during productive years assuming family labor, 1979.



Item Unit Quantity Price Amount


------ Dollars -------

Fertilizer Cwt 6 4.00 24.00
Pesticides Pounds 2 4.00 8.00
Herbicides Pounds 5 7.00 35.00
Machinery and
irrigation Hours 10 Variable 109.00
Miscellaneous Dollars --- ---- 25.00
Interest on operating
capitala Dollars 201 0.12 12.06
Plants Each 600 2.50 225.00
Landc Acre 1 1,000.00 100.00

Total costs per acre 538.06
Family production
on labor Hours 38-- ----


a
Interest costs are based on a
6 months.



plant costs are based on an
a 20 year life and an opportunity c
made for recapture of opportunity c
(pre-production) period.

c


rate of 12 percent per annum for



initial investment of $1,500 with
:ost of 10 percent. No allowance is
;osts during the establishment


Land costs are based on an opportunity cost of 10 percent.













Appendix Table 2.--Estimated production costs per acre for blueberries
during bearing years, assuming hired production labor,
1979.



Item Unit Quantity Price Amount


------ Dollars -----

Fertilizer Cwt 6 4.00 24.00
Pesticides Pounds 2 4.00 8.00
Herbicides Pounds 5 7.00 35.00
Machinery and
irrigation Hours 10 Variable 109.00
Labor Hours 38 3.50 133.00
Miscellaneous Dollars --- ---- 25.00
Interest on
operating capital Dollars 334 0.12 20.04
PlantsP Each 600 2.50 225.00
Landc Acre 1 1,000.00 100.00

Total costs 679.04


a
Interest costs are based
6 months.


on a rate of 12 percent per annum for


b
Plant costs are based on an initial investment of $1,500 with a
20 year life and an opportunity cost of 10 percent. No allowance
is made for recapture of opportunity costs during the establishment
(pre-production) period.

c
Land costs are based on an opportunity cost of 10 percent.













Food and Resource Economics Department
Florida Agricultural Market Research Center
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611
In cooperation with USDA/ESCS
Research Agreement # 58-319W-8-2522X


Form Approved
0MB No. 40-R 4070
Approval expires 6-30-80
Interviewee No.
Date


Consumer Benefits of Direct Marketing Activities

Section I

Description of Direct Marketing Outlet (complete prior to consumer interview.)
(For office use.)

Hello, I'm I represent the University of Florida
Market Research Center. We are conducting a research project on farmer-to-
consumer direct marketing. This research is designed to be helpful to both
farmers selling directly to consumers and consumers buying directly from
farmers. In this respect I would like to interview a sample of consumers
patronizing your outlet. Answers to all questions are confidential and
will only be used in summarizing data from this survey. No names will
appear or be related to the questionnaires in any manner. May I ask you a
question or two that will be used in classifying your outlet? Your response
is voluntary and not required by law. (Secure following information when
obtaining permission to interview customers.)


A. Type of outlet (circle one).


1. Roadside stand


2. U-Pick


3. Farmer's Market


For Office
Use


4. Other (specify)


B. Commodities or products sold (list, use back if necessary)


C. .Location of above outlet (County)


(City)


D. Length of time in business at this location (Years)














Section II

Direct Marketing Shopping Patterns


Hello I'm I represent the University of Florida's
Market Research Center. We are conducting a research project on farmer-to-
consumer direct marketing. May I ask you a few questions about your pur-
chase(s) and your shopping here today? Your response is voluntary and is
not required by law. Answers to all questions are confidential and will be
used in summarizing data from this survey. Your name will not appear or
be related to the questionnaire in any manner. (If yes, proceed, if no,
terminate interview).

For office use
A. Have you patronized this particular outlet before? (circle one)

1. Yes (If yes,) how many times in the past year?

2. No (If no, skip to item C)


B. How often, on the average, do you patronize this outlet? (circle one)

1. Once per year 2. Once per month 3. 2-3 times per month

4. Once per week 5. More than once per week


C. How many similar outlets, if any, have you patronized during the
past year? (number)

D. How did you get to this location? (circle one)

1. Car 2. Walk 3. Public transportation (taxi, bas)

4. Other (bicycle, motorcycle, etc.) Specify


E. Was your visit to this market outlet today (circle one)


1. A special trip directly from your residence? (if checked, go to F)

2. Combined with other local shopping or similar activities?
( If yes, go to H & I)

3. Just passing by outlet? (tourist, joy riding, etc.)

4. Other (specify)
(Go to H & I)














For office
Use
F. How many miles is it from here to your residence? (mi.)

G. How much time does it take to come here from your residence? (min)
(Go to J)

H. How many miles out of your way was your visit here? (miles)


I. How much additional travel time did your visit here require? (min)


J. From your standpoint, what are the most important advantages to you
for buying food products here? (probe for 3)

1. 2. 3.


K. Are there any disadvantages to you for buying food products here?
Yes, No (circle one). If yes, specify disadvantages.

1. 2. 3.


L. How could this particular type of outlet be improved ? (probe)








Section III

Consumer Purchases of Specific Commodities

(Please use the following codes for the respective fruits, vegetables, and
other products. Code from observation whenever possible.)

Oranges = 0 Honey = H Blueberries = BB
Grapefruit = GF Milk = M Tomatoes = T
Snap beans = B Strawberries = S Eggs = E
Grapes = G Watermelons = W Other (Specify)


A. I see that you have bought some .When you stopped here
today, had you planned to buy ___ ?
( code)
(circle one) 1. Yes

2. No














B. How many (units) of


(code)


did you purchase here today?


(specify quantity and units)


C. What was the total amount you spent for


(code)T


D. From your standpoint, what are your most important reasons
for buying here? (probe for 3)
(code)

1.

2.

3.


E. Have you bought __d_ at a
(code)
during this time of the year?

(circle one) 1. Yes 2. No


local grocery store or supermarket



(If no, do not ask F, H and J)


F. What would you estimate the total cost of these (this)
(code)
would be if purchased at a local grocery store or

supermarket? $


G. On a rating scale from 1 to 9, where l=excellent and 9=poor,
how would you rate the freshness of the ce you bought today?


Rating


H. Using the same rating scale (repeat) how would you rate the fresh-
ness of __ bought at the supermarket at this time of the year?
(code)

Rating


1. Again, using the rating scale from 1 to 9. where excellent and
9=poor, how would you rate the overall quality of the
you bought today? (code)


Rating


For office
Use










For office
use


J. Using the same rating scale (repeat) how would you rate the
overall quality of bought at a supermarket at this time
of year? (code-

Rating

(Repeat Section III for each commodity purchased)
Section IV

Consumer Demographics

A. Respondent (circle one) 1. Female 2. Male

B. What is the age of the head of the household?

C. How many people living in your household are 18 years of
age or above? Number

D. How many people living in your household are under 18 years of
age? Number

E. In school, what is the highest grade you have completed?
(circle number of years)

1. Elementary (grade school 01 02 03 04 05 06 )
2. Junior high 07 08
3. High school 09 10 11 12
4. College 13 14 15 16
5. Graduate school 17 18 19 20 21

F. What is the occupation of the head of-your household?
(circle appropriate classification; if in doubt of proper classi-
fication, write answer in Item 6.) (If not employed, skip to G)

1. Administrative, engineering, scientific, teaching and related
occupations, including creative artists.

2. Technical, clerical, sale and related occupations.

3. Service occupations including military occupations.

4. Farming, forestry, fishing and hunting occupations.

5. Production occupations including construction, extractive,
transport, and related occupations.

6. Other

G. Is the head of the household retired or unemployed ? (circle one)







For office
use
49






H. Are you married or not married? (circle one)

If respondent is married and:

1. Male, ask, Is wife employed? No Yes

2. Female, ask, Are you employed outside your home?
Yes No (circle proper answer)


I. Please tell me which of the following income categories most
closely describes your total family income in 1978 before
taxes, including wages and all other income. Is it--

(show card A; circle response)

1. Under $8,000
2. $8,000-9,999
3. $10,000-14,999
4. $15,000-24,999
5. $25,000 and over



J. (Complete by observation except when in doubt; then turn the
card to side B.) Please tell me how would you classify your-
self with the following racial or ethnic groups? (circle one)

1. White (not Hispanic origin)
2. White (IHispanic origin)
3. Black (Not Hispanic origin)
4. Black (Hispanic origin)
5. American Indian or Alaskan native
6. Asian or Pacific Islander

K. How did you learn about this outlet?

1. Road signs 2. Newpaper 3. Friends or relatives

4. Known for years 5. Other (specify)


Number of shoppers in your party?

Residencey:

1. Permanent area resident.


2. Temporary or visitor












REFERENCES


Sales and Marketing Management, 1979. Survey of Buying Power, Vol. 123,
No. 2, July 23, 1979.

Bureau of Economic and Business Research. Florida Statistical Abstract
University ot -lorida Press, Gainesville. 1980.

Bureau of Economic and Business Research. Florida Statistical Abstract
University of Florida Press, Gainesville. 1979.

Stegelin, Forrest E., and Timothy D. Hewitt. "Financial Analysis of
Establishing, Developing, and Producing Rabbiteye Blueberries in
Florida", Proceedings of the Florida State Horticultural Society
Vol. 92: 1979.

Crocker, T.E., P.M. Lyrene, and C.P. Andrews. "The Blueberry".
Fruit Crops Fact Sheet, FC-46, Florida Cooperative Extension
Service, IFAS, University of Florida, Gainesville, April 1979.




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