Top of Mind: Consumer-Driven Farms

April 4, 2012 07:35 AM

My neighbor stopped by the other day with an overflowing grocery bag. "Here, I can’t eat these anymore," she said, shoving the bag full of bread, pasta, cereals and a six-pack of beer into my arms. "Are you on a diet?" I asked suspiciously of the woman I’ve always known to be a size 2. "Nope, I just found out I have celiac disease," she said.

When you ask people if they have heard of celiac disease, the answer is generally no. Yet one in every 133 people in the U.S. has celiac disease—an autoimmune disorder that affects the digestive system. Sufferers must avoid gluten in their diet, which means products made from wheat, barley and rye (which all contain gluten) are out.

Sorghum, however, is a viable gluten-free alternative. Suddenly this ancient grain is gaining attention from millers, bakers and food giants seeking to supply the burgeoning gluten-free market. This $1.56 billion market is not only growing due to the rise in people with gluten intolerance, it is expanding to consumers who simply want to eat a variety of grains.

As a result, sorghum is climbing out of a decade-long hole, making it a go-to choice for food processors. Meanwhile, sorghum’s drought-hardiness is endearing the crop to farmers across the South and Plains and even into parts of the Midwest, where areas with tough soils respond well to the grain. Read more about the resurgence of this crop.

Feed the Consumer. It’s interesting to watch consumer changes in food purchases and their ripple effects through the market. Some economists suggest we better start watching the food habits of the aging baby boom generation. The number of Americans older than 65 will reach 54 million by 2020. Catering to the food preferences of older Americans—who are more health-conscious—will be an important marketing strategy for food suppliers.

Growth in demand for value-added food products at the supermarket and in restaurants is likely to increase the share of food dollars that go to processors and retailers and further diminish the share that goes to ag producers. However, more farmers are positioning themselves to capture a larger share of the value that is added. Some strategies include diversifying into high-quality or specialty crops that may carry price premiums and developing branded products that are more readily linked by the consumer with a particular food company, production region or even an individual farm.

Producers must accept that feeding the modern consumer means adopting new ways of doing business. Creative business and market links, though far from visible as landmarks in America’s farmlands, will be the new hallmarks of consumer-driven agriculture.

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