An evaluation of consumer segments for farmers\u27 markets in Indiana and Illinois

In 2009, the United States Department of Agriculture (USDA), Agricultural Market Service (AMS), reported the number of U.S. farmers’ markets grew 43% from 2000 to 2005 (Ragland and Tropp, 2009). Although the number of markets has rapidly increased within this five year period, sales have increased by only 2.5% each year. The low percentage in sales suggests a maturing industry. Understanding consumer segments is imperative. Farmers’ markets that take the initiative to learn the needs and preferences of their consumers have higher sales than markets of the same size that do not. Therefore, the objective of this study is to segment consumers using psychographic and behavioral characteristics of shopping attributes at farmers’ markets in order to increase farmers’ market manager’s knowledge about their customers and enable them to increase profits in the future. Intercept studies were conducted in Indiana and Illinois to determine preferences of farmers’ market consumers. Nine farmers’ markets from the Indiana AgroTourism directory and the USDA National Directory Farmers’ Market Directory were selected at random. Selected cities were identified based on census identification of more than 50,000 residents. Four cities were chosen out of the Metropolitan category and were used in this study: South Bend, IN; Bloomington, IN; Springfield, IL and Peoria, IL. Likert scale questions were analyzed using factor analysis and cluster analysis to identify clusters of consumers. Survey results show that of the 164 Metropolitan surveys analyzed, 85.3% of respondents were Caucasian, 71.9% were between the ages of 35 and 64, 78% were female, 65.4% have a college or post-graduate degree, 55% have an annual income between $20,000 and 74,999, 44% reported living in a two-person household and 73% identified themselves as being the primary shopper of their household. Data analysis showed that four clusters were formed: Recreational (42%), Minimalists (27%), Enthusiasts (23%) and Time-challenged (8%). Each cluster has a unique set of preferences based on farmers’ market attributes ranging from overall convenience to the presence of nearby stores. This information can be used to the benefit of market mangers to increase profitability