Source: OREGON STATE UNIVERSITY submitted to NRP
STRATEGIES FOR THE NEW FOOD BUSINESS ENTREPRENEUR
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
0198306
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Mar 1, 2003
Project End Date
Sep 30, 2007
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
OREGON STATE UNIVERSITY
(N/A)
CORVALLIS,OR 97331
Performing Department
FOOD INNOVATION CENTER EXP STA
Non Technical Summary
New entrants to the processed food industry can provide market alternatives for small to medium sized farms. However, more often than not, these new entrants are faced with the Herculean task of being successful with limited knowledge, employees and capital. This project will identify management processes and activities that will help new entrants to the processed-food industry.
Animal Health Component
60%
Research Effort Categories
Basic
20%
Applied
60%
Developmental
20%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6026220310050%
6036230301020%
6046220310015%
6046230310015%
Knowledge Area
602 - Business Management, Finance, and Taxation; 603 - Market Economics; 604 - Marketing and Distribution Practices;

Subject Of Investigation
6230 - Marketing systems and sectors thereof; 6220 - Marketing, processing, and supply firms other than cooperatives;

Field Of Science
3010 - Economics; 3100 - Management;
Goals / Objectives
The main objective of this project is to build the body of strategic and marketing management knowledge base in a manner that will help new food entrants meet with greater success, both in terms of longevity and performance. Specific objectives include: - Determining the use of market information in the planning process of small to medium sized food processors and its relation to performance. - Identifying how to market to the various members of different distribution channels for processed food products. - Identifying the profile of food processors and identifying characteristic traits of successful food entrepreneurs. - Determining how to develop a productive strategic planning process for new food entrants. - Determining the key requirements for new food processors to develop legitimacy.
Project Methods
Research studies designed to achieve the noted objectives of this project will rely on qualitative and quantitative research methods. The combination will allow for the identification and creation of theories and subsequent statistical testing of those theories. Qualitative research methods are designed to explore for modifications to general concepts, to find patterns or ideas that are not previously thought about. Westgren and Zering (1998) note that "Case studies are a useful analytical tool for researching firms and industries in transition, so as to gain insights that may not be found." using traditional quantitative research methods (p. 415). It is expected that Intrinsic Case Study, Instrumental Case Study, and Collective Case Study methods to be used (Stake 1995). Data for these case studies will be collected via interviews with representatives from an assortment of food companies. The profile of the population will be highly dependent on the specific research question being investigated. For example, the population for a study to learn why new entrants exit the food industry will have a different population than if the objective is to learn how to introduce a product into the gift basket industry. Where appropriate, random sampling will be exercised, otherwise, subjects for interviews will be selected on the basis of the research topic. When appropriate, focus groups will also be used to answer the researchable questions at hand. Participants in the focus group will be recruited based on criteria specific to the researchable question. The data (i.e., transcripts of conversations, etc.) will be analyzed for content and scrutinized against current business, marketing and economic theory. Quantitative methods will be used when the researchable question is well developed and substantially backed by economic theory or from previous research results. The data for the research will be secondary and primary data. Secondary data will be utilized when applicable. However, it is expected that due to the limited available information on startups in the food industry, most of the data will need to be collected as part of the research process. In cases warranting primary data collection, surveys will likely be utilized. These surveys can be phone, mail, or internet based. The surveys could also be conducted face to face with the respondent as in the case with store-intercept surveys. When appropriate, non-response bias will be tested. The data will be analyzed using the appropriate econometric and statistical procedures. Conventional examples include Logit and Probit models, demand estimations, input-output models, and Hedonic models. Other methods used will include conjoint analysis, structural equation modeling, and preference mapping.

Progress 03/01/03 to 09/30/07

Outputs
PI left this institution. No new information to report.

Impacts
No new information to report.

Publications

  • No publications reported this period


Progress 01/01/06 to 12/31/06

Outputs
The project has continued with three research efforts from the past years. The first research effort explores how small to medium sized firms find and use market information. Eight interviews have been conducted to date, they have been transcribed and a preliminary qualitative analysis has been conducted. The results have been presented at WERA 72 and a publication is being prepared for journal submission in 2007. The analysis will also inform a larger scale survey which is slated for 2007. The second research effort was planned in 2005 and work started in 2006. This research looks at the start-up process of food companies and identifies the best practices of this process to increase the chances of success and reduce the amount of time required. This work is exploratory in nature and requires many face-to-face interviews. The third project looked at the planning process of food companies. The data has been collected and is being analyzed. Preliminary findings indicate best entry points to the food industry and the power of planning. All of this work has found its way into outreach activities. The main outreach/Extension activity is an educational series offered to nascent food processors, helping them learn how to start and run a food business.

Impacts
New entrants to the processed food industry can provide market alternatives for small to medium sized farms. However, more often than not, these new entrants are faced with the Herculean task of being successful with limited knowledge, employees and capital. This project will identify management processes and activities that will help new entrants to the processed-food industry. Specific research projects have been conducted under this Hatch projects. These projects have included the utilization of market information in decision making, and the planning process and its impact on performance of food enterprises, and the development of legitimacy by start-up food companies. The research is in progress and the results are not complete. However, preliminary results indicate that market research is not widely utilized in small to medium sized food companies. Also, formal business planning (as opposed to living the plan into existence) is positively related to performance, but the formal planning does not have to result in a written business plan in order to impact performance. If firms were to pay more attention to market information, implementing it into their decision process, and planning out their actions, there might be more success rates of new food businesses.

Publications

  • Johnson, A.J. and C. Dibrell. June 30, 2006. Planning-Performance Links in US Food Businesses. Selected paper, Western Agricultural Economics Association Annual Meetings. Anchorage, AK.
  • Grout, C., T. Egelkraut, and A.J. Johnson. June 21, 2006. The Power of Grounded Theory: Market Information Utilization by Small Agribusinesses Selected paper for Western Education/Extension and Research Activities Committee on Agribusiness (WERA 72). Las Vegas, NV.
  • Johnson, A.J., J. Craig and C. Dibrell. 2006 A Snapshot of Australian Food Business. Statistical report of survey findings for report to respondents.


Progress 01/01/05 to 12/31/05

Outputs
The project has developed four research efforts which are in various stages of completion. The first research effort looks at who is seeking assistance in starting a food business and what their needs are. The research is ongoing but has informed Extension program development to date. The second research effort explores how small to medium sized firs find and use market information. Preliminary work of 8 interviews has been conducted. The interview transcripts are being analyzed for content and will inform a larger scale survey. The third project is a mail-survey of food companies related to the planning process. The data has been collected and is being analyzed. Preliminary findings indicate best entry points to the food industry and the power of planning. The final research effort has been planned and slated for action in 2006. This research will look at the start-up process of food companies and identify the best practices of this process to increase the chances of success and reduce the amount of time required. All of this work has found its way into outreach activities. The main outreach/Extension activity is an educational series offered to nascent food processors, helping them learn how to start and run a food business.

Impacts
New entrants to the processed food industry can provide market alternatives for small to medium sized farms. However, more often than not, these new entrants are faced with the Herculean task of being successful with limited knowledge, employees and capital. This project will identify management processes and activities that will help new entrants to the processed-food industry. Specific research projects have been conducted under this Hatch projects. These projects have included assessment of nascent food business educational needs, the utilization of market information in decision making, and the planning process and its impact on performance of food enterprises. The research is in the preliminary stages and the results are not complete. However, preliminary results indicate that market research is not widely utilized in small to medium sized food companies. Also, formal business planning (as opposed to living the plan into existence) is positively related to performance, but the formal planning does not have to result in a written business plan in order to impact performance. If firms were to pay more attention to market information, implementing it into their decision process, and planning out their actions, there might be more success rates of new food businesses. The project is too early to have direct impacts on producers and food processors.

Publications

  • Johnson, Aaron J., Marc McFetridge, and Catherine A. Durham. 2005. A Study of Store Level Retail Fruit Demand: Lessons from Omitted Variables. Journal of Food Distribution Research. Vol 36. No. 1. p. 91-94.
  • McFetridge, Marc V., Aaron J. Johnson, and Catherine A. Durham. 2005. Collecting Store Level Data on Retail Supermarket Sales. Journal of Food Distribution Research. Vol 36. No. 1. p. 107-109.
  • Durham, Catherine A., Marc V. McFetridge, and Aaron J. Johnson. 2005. The Development of a Quality Scale to Measure the Impact of Quality on Supermarket Fruit Demand. Journal of Food Distribution Research. Vol 36. No. 1. p. 36-41.
  • Johnson, Aaron J. and C. Clay Dibrell. 2004. Strategic Planning Lessons from Successful Vertically Integrated Food Processors. Journal of Food Distribution Research. 35(1):127.
  • Johnson, Aaron J. and Esteban Vega. 2004. Marketing Intelligence in Small to Medium Pacific Northwest Food Processors. Journal of Food Distribution Research. 35(1):195.
  • Down, J., Dibrell, C., Green, M., Hansen, E., & Johnson, A. 2003. A Resource-based View and Market Orientation Theory Examination of the Role of Familiness in Family Business Success. Selected Paper at 14th World Conference of Family Business Network, Lausanne Switzerland, September 24-27. Research Forum Proceedings New Fronteirs in Family Business Research: The leadership Challenge. Panikkos Poutziouris and Lloyd P. Steier eds.
  • Durham, C. A., M. V. McFetridge, and A. J. Johnson. 2002. In store demand for eco-labeled fruit. Proceedings of the Conference on Ecolabels and the Greening of the Food Market, Boston Massachusetts. November 7-8.
  • Durham, Catherine A., Esteban Vega-H, and Aaron J. Johnson. 2002. The Guanxi Hypothesis: Marketing Grass Seed in China, in Changes in China's Agricultural Sector: Trade, Market and Policy Reform (WCC-101 Conference Proceedings). Washington DC. April 15th-16th.
  • Johnson, A. J., C. A. Durham, D. O. Andrade, and M. V. McFetridge. 2002. Recognition of eco-labeled products in retail environments. Conference on Ecolabels and the Greening of the Food Market, Boston Massachusetts. November 7-8.
  • Johnson, Aaron J, Catherine A. Durham, Marc V. Mcfetridge, and Clark Seavert. 2002. Impacts Of Eco-Labeling On In-Store Demand For Apples And Pears. Selected poster at American Agricultural Economics Association Annual Conference, Long Beach, California. July 28-31.
  • Johnson, Aaron J. 2004. Developing Your Business Plan. Invited speaker at Managing a (Family) Wine Business: From A(dvertising) to Z(est). Canby, Oregon. April 8.
  • Johnson, Aaron J. and Heather C. Johnson. 2004. Do-it-yourself Strategic Marketing. Invited speaker at Tri-State Gourmet Getaway. Portland, OR. April 23.
  • Johnson, Aaron J. 2003. Launching Your Food Product Oregon Raspberry and Blackberry Commissions Marketing Your Value-Added Berry Product. Aurora, Oregon. December 17.
  • Down, J., C. Dibrell, E. Hansen, and A. Johnson. 2003. A multi-domain model of small and medium entrepreneurial firm success. College of Business Seminar Series, Oregon State University. Corvallis, Oregon. February 14.


Progress 01/01/04 to 12/31/04

Outputs
Over 150 new food entrants have been surveyed regarding their educational needs. The data will be analyzed as input into the development of an advanced food business development training program. In addition, past participants of our introduction workshop (over three hundred people) will be contacted to assess impact of the program, as well as determine what help they need. This information will also inform the program development we are planning. Interviews have been conducted with food businesses to determine successful practices around planning. The results have been written up and presented. Substantial planning went into the development of two specific research projects associated with this Hatch project. Both are advanced surveys of existing food businesses to determine their key factors to success. The factor types include market intelligence, planning process, environmental conditions. One study specifically addresses the startup process and actions that new food companies can take to become more successful more quickly.

Impacts
The initial research on educational needs of new food industry entrants will be written up in the Journal of Extension. That article will help guide other programs across the US in developing training programs targeted at this group of stakeholders. That is how we are using it here at our center. The presentation and paper on lessons learned from interviews with food companies will help people see a pragmatic way to approach an otherwise daunting task, helping them to start their business and increase the odds of being successful. The impact of the planning is strictly internal at this point, allowing us to move forward on research tasks in 2005.

Publications

  • Johnson, Aaron J. and C. Clay Dibrell. 2004. "Strategic Planning Lessons from Successful Vertically Integrated Food Processors." Journal of Food Distribution Research. 35(1):127.
  • Johnson, Aaron J. and Esteban Vega. 2004. "Marketing Intelligence in Small to Medium Pacific Northwest Food Processors." Journal of Food Distribution Research. 35(1):195.