Source: KENTUCKY STATE UNIVERSITY submitted to NRP
MARKETING, AND OUTREACH ACTIVITIES ASSOCIATED WITH EMERGING AQUACULTURE TECHNOLOGIES, AMENABLE FOR SMALL-SCALE PRODUCTION IN KENTUCKY
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0223762
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2010
Project End Date
Sep 30, 2013
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
KENTUCKY STATE UNIVERSITY
(N/A)
FRANKFORT,KY 40601
Performing Department
Aquaculture
Non Technical Summary
Kentucky's small scale farms are struggling to remain profitable in a global agricultural marketing environment. Marketing differentiated foods locally provide an opportunity for such farms to capture a greater share of consumers' food budget and profitable options. This proposal, containing 3 projects, investigates direct, restaurant, and retail marketing of aquaculture products that small-scale farms can produce. The goals are to determine 1) the marketability of foods from farms directly to Hispanic consumers, 2) the feasibility of marketing largemouth bass from farms to local restaurants and Asian grocers, and 3) the potential of marketing smaller paddlefish directly from farms to restaurants and Asian grocers. Experimental auction methodology will be used to promote incentive-compatible willingness to pay measures. This project will involve active participation of small scale farmers and contain several farmer-training deliverables, including multiple extension bulletins. The main expected outcome of this project will be greater participation of small-scale farmers in directly marketing aquaculture products to Hispanic consumers, restaurants, and grocery stores.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60462993010100%
Knowledge Area
604 - Marketing and Distribution Practices;

Subject Of Investigation
6299 - Marketing, general/other;

Field Of Science
3010 - Economics;
Goals / Objectives
This proposal contains three objectives that seek to improve production and marketing in small-scale farms using recent technological and marketing options. The underlying goal is to use farm ponds, aquaculture, and local markets to arrive at profitable options for small-scale producers. The specific objectives are listed below. 1. Direct marketing in aquaculture: opportunities among Hispanic consumers. 2. Largemouth Bass: marketing, farmer demonstration, and outreach. 3. Marketing, of paddlefish produced using intensive pond culture methods. The overall expected outcome of this project is expanded producer involvement and education in "technology-and-markets" packages that are both feasible and profitable in a small-scale aquaculture setting. Objective 1 is expected to bring about increased marketing activities to Hispanics involving various unprocessed agricultural products by illustrating successful direct-marketing options among Hispanic consumers in Kentucky and the potential of starting a Hispanic CSA (community supported agriculture). Objective 2 is expected to open new markets for small-scale largemouth bass producers in Kentucky and neighboring states. This objective should result in identification of various restaurant markets in Kentucky and neighboring states for largemouth bass. In addition, this project will give the fish characteristics and prices that are in most demand in each market. If a cooperating producer is found for Objective 2, additional results will include production costs and business feasibility measures of selling largemouth bass produced at a small scale. Results of this Objective will be written as a bulletin for small-scale largemouth bass production and marketing and results in the bulleting will be presented to county extension agents. Objective 3 would investigate markets for paddlefish meat in Kentucky and neighboring states. Paddlefish is an extremely unique product in that it has few freshwater substitutes, and there are no supplies of this fish from traditional wholesale/restaurant supply sources. The main expected outcome is that restaurants with seafood menus and a flair for serving unique dishes will find paddlefish meat highly acceptable. Another expected outcome is that smaller paddlefish (less than 2 lbs/0.9 kg) would be found to be better-tasting than older reservoir-ranched fish. Restaurants would also like the boneless nature of paddlefish that would encourage them to present the whole fish in various dishes. Asian consumers also will find whole paddlefish suitable for various ethnic dishes and paddlefish fins could be a substitute for shark fins in Asian markets. Objective 3 is expected to provide clear marketing guidelines to producers wanting to grow smaller paddlefish intensively in farm ponds.
Project Methods
Participant choice is very important for receiving meaningful results in experimental auctions. In Objective 1, participants must be individuals who have responsibility at buy at least 50% of the household grocery purchases. In Objectives 2 and 3, participants must be restaurateurs and grocers who make seafood purchase decisions. These participants must also provide information about their grocery shopping habits, demographics, and their likes/dislikes of the featured products. Sample sizes for consumer auctions related to a particular market will be kept from 100-200; however, such sizes might not be possible for restaurants and fish retailers. Experimental auctions used in this project would be either Vickrey auctions and/or Becker-Degroot-Marschak (BDM) auctions. These auctions will be designed with real economic consequences where winners would be required to buy product. This design will generate the revealed preference data necessary for calculating true willingness to pay (WTP). A Vickrey auction will take place in multiple rounds, each round consisting of several auction trials. Each round will be conducted for a specific auctioned product. The first round will be a trial auction involving commonly-available candy bars that would familiarize participants about the auction process. Within a round, 4 auction trials will be repeated, in which participants will be asked to submit sealed bids for the product being auctioned. In an nth-price Vickrey auction, the nth-highest bid is the auction price, and all participants who bid above this price are winners of the auction. For each round, the auctioneer will randomly choose a trial which determines the winners and the winning price. All winners will be required to buy the product at the auction price. In the first 2 trials, per round, participants will provide their WTP information based upon a visual inspection of the product, in addition to remarks about the product by the auctioneer. Participants will be allowed to taste the cooked product prior to the last 2 trials, per round. The Vickrey auction will conclude with a survey of buyers' shopping characteristics and demographics. The BDM auction mechanism proposed in this study will be reserved for cases where a group of participants could not be gathered at one place to conduct Vickrey auctions. Here, the auctioneer will meet participants individually and auction one or more products. For each auction, a computer-generated random price would be selected for the product at the time that participant submits a sealed bid. If the bid price exceeds the random price, the participant pays the randomly-selected price and buys the product; otherwise, the participant does not have to buy the product. The resulting data from the auctions will be analyzed to determine the WTP of various types of buyers for the different products. Distributions of bid prices would be presented and these prices would be used as dependent variables in regression models that would investigate potential causality between bid prices and product attributes/buyer demographics. The regression models could be estimated using fixed-effects/random-effects models (Greene 1993).

Progress 10/01/10 to 09/30/13

Outputs
Target Audience: The target audience is most small-scale producers in Kentucky. Based on the goals of the project, we are targeting farmers that live nearby large population centers for ease of marketing small amounts of fresh aquaculture products on a weekly or bimonthly basis. Our target audience also includes farmers with existing ponds that are suitable for aquaculture, which could include farm ponds that are traditionally used as water reservoirs. Our target audience represent farmers who are seeking local markets for aquaculture products; these farmers are willing to customize product to meet needs of sepcific markets and demographics. Changes/Problems: The only major change was that there were no collaborating farmers involved in the production of largemouth bass (Objective 2). This was because no farmer showed interest in investing in such a venture. Thus, Objective 2 was modified and completed by purchasing locally-grown largemouth bass from an established farmer and using the fish for marketing trials. What opportunities for training and professional development has the project provided? 1) This project has made it possible for Ms. Ashya Dozier, a female, African-American undergraduate student at Kentucky State University to complete a capstone research project in the marketing of largemouth bass, that enabled her to finish requirements for her graduation. 2) This project has allowed a Kentucky State University graduate student, Mr. William Rimmele, to gain experience in fish marketing. 3) This project has allowed a Kentucky State University graduate student, Mr. Richard C. Bryant, to be trained in fish marketing and obtain data for writing a M. S. thesis in aquaculture marketing. 4) This project has allowed a Kentucky State University graduate student, Mr. Alexander Philipchik, to write a M. S. thesis in marketing of paddlefish. How have the results been disseminated to communities of interest? The results of this project were disseminated in the following channels: 1) Publications of results in trade journals that are read by fish producers in Kentucky and surrounding states: Kentucky Aquatic Farming newsletter 2) Publications and presentations of results made to fish culture and marketing specialists through the World Aquaculture Society and Kentucky Academy of Science 3) Presentations of results made for Kentucky and Ohio farmer training at a beginning farmer training workshop titled “Aquaculture Boot Camp” featuring both Ohio and Kentucky farmers. This workshop was hosted by Ohio State University and Kentucky State University 4) Presentation of results in the annual meeting of the Kentucky Aquaculture Association 5) Presentation of results were made before beginning farmers assembled at an aquaculture workshop at a Kentucky State University "Third Thursday" event. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Major activities completed: 1) Completed a survey of Hispanic consumers' willingness to buy catfish and tilapia from Kentucky's producers 2) Completed a survey of independent restaurants in Kentucky regarding their perception of locally-grown largemouth bass 3) Completed a survey of Hispanic consumers' willingness to buy paddlefish from Kentucky producers 4) Installed a live-fish holding tank at a Hispanic restaurant to demonstrate sales of locally-grown fish to Hispanic consumers 5) Delivered locally-grown catfish on a weekly basis to four Hispanic grocers to demostrate local marketing to Kentucky fish producers 6) Conducted a paddlefish cooking demonstration and survey of members at a Community Supported Agriculture operation in Kentucky Specific objectives met: All project goals were met, except no cooperating producer was found for a largemouth bass culture demonstration. Significant results achieved: 1) Hispanic consumers prefer tilapia fish over channel catfish. 2) Mostly male Hispanic consumers show a strong liking for channel catfish (bagre), and are willing to buy the fish live, whole, or gutted at prices from $3-$5/lb. The preferred size of catfish is 1.5-2.0 lbs. Hispanics do not like small catfish, ie., 1lb fish or smaller. 3) Farmers are able to supply Hispanic grocers with whole catfish, in the round, on ice from prices ranging from $1.50-$1.75/lb. The Hispanic grocers are able to sell upto 30 lb of whole, fresh catfish per week. 4) Having a live fish tank at a Hispanic restaurant significantly increases sale of locally-grown fish such as catfish or hybrid striped bass. 5) Most independent restaurants like the flavor of largemouth bass, but do not want the whole fish; they prefer filleted largemouth bass. However, largemouth bass is an expensive fish, and the brekeven price of fillets will be close to $15/lb, which is deemed too expensive for many independent restaurants. 6) Hispanic and Caucasian consumers like to flavor of paddlefish. They have a positive perception of the fish, after knowing that it is boneless. The typical willingness to pay for paddlefish is $5/lb for the whole fish, which is a profitable price for local growers. However, caucasian consumers prefer processed fish, including fish steaks, instead of fillets. Key outcomes: 1) As a consequence of this project one fish farmer in Kentucky, Mr. Timothy Parrott, has started supplying live and fresh fish once ice to Hispanic grocers. 2) Encourgaed by this project, another fish farmer in Kentucky is installing a live fish holding station at an Asian grocery store for additional live fish sales. 3) As a result of this project, a Hispanic grocer is opening his facilities to various locally-grown aquaculture products such as Australian Red Claw crayfish and paddlefish. This grocer is satisfied with the quality of food from local farmers and has shown willingness to feature fresh meats and horticulture products.

Publications

  • Type: Journal Articles Status: Submitted Year Published: 2014 Citation: Dasgupta, S., and R. C. Bryant. 2014. Feasibility of local marketing of catfish from farmers to Hispanic grocers and consumers. Journal of Extension.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2013 Citation: Bryant, R. C., and S. Dasgupta. 2013. Marketing of small scale aquaculture products in Kentucky. World Aquaculture Society meeting, Book of Abstracts, p.396
  • Type: Conference Papers and Presentations Status: Awaiting Publication Year Published: 2014 Citation: Philipchik, A. and S. Dasgupta. 2014. Marketing of paddlefish among Hispanic consumers. World Aquaculture Society meeting, Book of Abstracts, to be published.
  • Type: Book Chapters Status: Awaiting Publication Year Published: 2014 Citation: Dasgupta, S. Economics of paddlefish aquaculture.
  • Type: Other Status: Submitted Year Published: 2014 Citation: Braynt, R. C., S. Dasgupta, A. Dozier. 2014. The marketing of largemouth bass to Kentucky restaurants. Kentucky Aquatic Farming.


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

Outputs
OUTPUTS: Activities: 1) Developed a restaurant survey on Survey Monkey to evaluate the willingness of local restaurants to purchase fish directly from Kentucky farmers, 2) developed a conjoint marketing experiment to evaluate the willingness to pay for Kentucky-grown largemouth bass among restaurant chefs, 3) conducted survey of 252 Kentucky and Ohio restaurants about their perceptions on purchasing locally-farmed fish, 4) conducted a survey of 25 Kentucky restaurants to evaluate their willingness to pay for largemouth bass, 5) published a news article in Ohio Restaurant Association newsletter regarding our marketing survey (http://www.ohiorestaurant.org/aws/ORA/pt/sd/news_article/69840/_self /layout_details/false), 6) interviewed Community-Supported Agriculture owners in Lexington and Louisville, KY, and planned paddlefish taste testing and data collection events, 5) recruited graduate student Mr. Richard Bryant who is developing the marketing data from this project into a M.S. thesis, 6) assisting graduate student, Mr. William Rimmele, to complete M.S. thesis based on this project. Dissemination of results: 1) Presented research results in the 2012- Aquaculture America meeting at Las Vegas, Nevada, 2) presented research results in 2012 Kentucky Academy of Science meeting, 3) published four extension articles regarding the economics and marketing of locally-grown aquaculture species in Kentucky. PARTICIPANTS: Students: graduate students who participated in the project during this timeline are Mr. William Rimmele, Mr. Richard Bryant, and Mr. Zach Kupchinsky. They assisted with surveys and taking fish samples to restaurants. They also assisted with initial data analysis. Mr. Rimmele and Mr. Bryant are using this project to complete their M.S. thesis at Kentucky State University. Farmers who participated in this project were: Mr. Robert Mayer, a largemouth bass supplier who provided fish samples for this project. Community Supported Agriculture owners, Mr. Robert Keil and Mr. Bobby Gaffney, also assisted this project by featuring KY's aquaculture products among their customers. TARGET AUDIENCES: General audience includes fish producers of Kentucky and surrounding states; restaurant chefs in the United States, farmers' market sellers, and Community Supported Agriculture owners. The project results are more directed at small-scale and limited-resource aquaculture farmers, including socially-disadvantaged farmers, who produce small-enough quantities of output to become unable to enter wholesale markets and have to depend upon retail and restaurant markets to be profitable. Efforts used to reach the target audience include extension publications. PROJECT MODIFICATIONS: While on farm demonstration of largemouth bass production was part of this project, it was not carried out because of funding limitations and lack of suitable farmers with small ponds who could do such a demonstration.

Impacts
The restaurant surveys contributed to the following changes in knowledge: 1) while freshwater fish was less popular in restaurant menus than marine fish, 43% of respondent restaurants featured freshwater fish; 2) catfish and tilapia were the most popular freshwater fish in restaurants, followed by hybrid-striped bass and paddlefish; 3) most restaurants identified as fish quality & freshness were their top priorities; fish price, year-round availability, and product form were not vitally important attributes; 4) restaurants preferred weekly delivery of fresh fish; 5) of the various fishes cultured in Kentucky rainbow trout was in the highest demand among chefs, followed by channel catfish, hybrid striped bass, and largemouth bass; 6) whole fish was chosen as preferred product form by 48% of respondents and fillets were preferred by 88% of respondents; 7) most chefs were willing to pay $4-$6/lb for whole fresh fish and $6-$10/lb for fresh fillets. The project results have resulted in the following changes in action: 1) aquaculture marketing workshops are encouraging farmers to seek sales of fresh, whole fish instead of fillets; these workshops are encouraging Kentucky farmers to approach restaurants directly for sales instead of sales via wholesalers and distributors; 2) A Community-Supported Agriculture owner in Kentucky is now contacting aquaculture marketing staff and farmers to feature Kentucky's Aquaculture products as part of their seasonal local-food products to their customers.

Publications

  • Rimmele, W., S. Dasgupta, S.D. Mims, and R. Onders. 2012. Intensive Production of Paddlefish, Polyodon spathula, in Decommissioned Waste Water Treatment Plants: An Economic Model. Aquaculture America 2012. Book of Abstracts, P. 398.
  • Dasgupta, S., R. Bryant, and A. Velasquez. 2012. Selling whole catfish to Hispanics: Results of a Marketing Project. Kentucky Aquatic Farming, 25(1): 3-5.
  • Bussen, N., S. Dasgupta, and W.Rimmele. 2012. is there a market for Kentucky-grown baitfish Kentucky Aquatic Farming, 25(1): 6-7.


Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: Activities: 1) Conducted a survey and experimental auction of locally-grown fish among Hispanic consumers in Shelbyville, KY (Fall 2011). This survey was done in cooperation with a Hsiapnic grocer. The grocer's storefront was used for the survey and results were shared with the grocer. 2) Conducted a survey and experimental auction of locally-grown fish among Hispanic consumers in Lexington, KY (Fall 2011). This survey was done in cooperation with a Hsiapnic grocer. The grocer's storefront was used for the survey and results were shared with the grocer. Dissemination of results: 1) Presented results of the surveys during Winter 2011 in a aquaculture meeting related to the Southern Regional Aquaculture Center conducted in Pine Bluff, AR. The presentation was titled: Dasgupta, Velasquez, Cuevas, and Rimmele. 2011 Kentucky fresh catfish survey & bdm auction results." 2) Shared results of experimental auctions with catfish with Hispanic grocery store owners. Events: 1) Selected a aquaculture farmer in Woodford County, Kentucky for a demonstration of cage culture of Tilapia (Summer 2011). Producer provided their own feed. The cultured fish were used in subsequent surveys of Hispanic grocers. However, producer did not keep input records, making it impossible to predict production costs. PARTICIPANTS: Students: graduate students Mr. Alejandro Velasquez and Mr. William Rimmele, Kentucky State University, assisted the principal investigator. Staff: a post-dosctoral scientist, Dr. Rafael Cuevas, also assisted the principal investigator. Mr. Velasquez and Dr. Cuevas are native Spanish speakers and they played a key role in the face-to-face surveys. They also translated questionnaires from English into Spanish. Mr. Rimmele's role was that of a support person during the survey process. Collaborators: Three farmers collaborated in this project. Mr. Dan Moreland and Dr. Robert Goetz of Kentucky supplied locally-grown tilapia and channel catfish for this project. Mr. Nathan Henton, a farmers from Woodford County, Kentucky, was a collaborator who cultured stocker tilapia from Mr. Moreland, in two floating in-pond cages. Additionally, two Hispanic grocers collaborated on this project: 1) Mr. Cesar, owner of Tienda Yanely in Shelbyville, Kentucky and 2) Mr. Manuel, owner of Aquas Calientes in Lexington, Kentucky. Mr. Manuel continues to collaborate by buying catfish from local farmes and sellng them through various grocery outlets in Lexington. Training or Professional Development: This project provided a first-time opportunity for a part-time fish farmer in Woodford County, Kentucky, Mr. Nathan Henton, to use a previously-unused large pond to grow two floating cages of tilapia during the summer of 2011. TARGET AUDIENCES: Two main target audiences served by this project were 1) fish farmers of Kentucky, and 2) Hispanic grocers of Kentucky. This project is teaching the fish farmers that small-scale tilapia and catfish production with the Hispanic community as a marketing outlet is profitable within the state. Hispanic grocery owners are learning that they can establish direct transactions with local farmers to buy fresh fish at a small scale. These trade relations are useful for future marketing opportunities that can involve a variety of food products from local farms to neighboring Hispanic communities. PROJECT MODIFICATIONS: The principal investigator found it useful to work with Hispanic grocers than with Hispanic churches as a means of food distribution. This is because grocers were able to provide fish processing services for end users while churches are not be able to do so.

Impacts
The experimental auctions conducted in Shelbyville and Lexington KY contributed to the following changes in knowledge: 1) discovered the willingness of Hispanics to buy fresh, whole catfish and tilapia 2) discovered that Hispanics are willing to pay sufficiently for catfish for both farmers and grocers to be profitable 3) discovered that male Hispanics have a higher proclivity to buy fresh, whole catfish than female Hispanics 4) discovered that there is sufficient demand for fresh catfish in Kentucky's counties with high Hispanic concentration for a sales of 50 lb of fish per store per day The experimental auctions and surveys conducted in Shelbyville and Lexington KY contributed to the following changes in action: 1) Hispanic grocer owner in Lexington , KY is convinced that there is a potential for making profit by buying fresh catfish once per week from farmers and selling them from their 6 outlets in the Lexington Area. Hence, the sore owner is going to buy 50 lb for whole, unprocessed, fresh catfish per week at $1.50/lb and sell from store. We are facilitating this by connecting the buyer with local farmers willing and able to supply fish. As part of this project, the amount of fish sold per week will be tracked with the final sales price.

Publications

  • No publications reported this period


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: Activities: 1)conducted an experimental auction of freshwater prawns among an ethnic group in Lexington, KY; 2) taught a KY State University, KSU, graduate student William Rimmele how to enter data from the auction, statistically analyze the data to evaluate the willingness to pay of consumers for freshwater prawns, and write a manuscript based on the research results; Services: provided education opportunity for KSU graduate student, William Rimmele, in agriultural marketing research, which included conducting consumer surveys, creating database, statistical analysis of data, and writing a research manuscript based upon the results Products: obtained primary data about the preference of Chinese consumers in Kentucky regarding fresh, locally-grown aquaculture products Dissemination: using the above database an extension article was developed and published in Kentucky Aquactic Newsletter, a regional extension media that is widely read by aquaculture farmers in kentucky and neighboring states PARTICIPANTS: Individuals: 1) Mr. William Rimmele, graduate student, KY State University 2) Mr. Shawn Coyle, co-Investigator, KY State University; Organizations: Kentucky Chinese American Association; Training and professional development were provided to Mr. William Rimmele, graduate student, KY State University, in agricultural marketing research TARGET AUDIENCES: Target audience: aquaculture farmers in Kentucky and surrounding states of Ohio, Indiana, Illinois, Tennessee, and Virginia, where there is a juxtaposition of small-scale seafood farming and etnhic consumers; Efforts: extension and outreach activities were conducted by publishing results of the research in an extension media (Kentucky Aquatic Newsletter)that is circulated in the aquaculture producer and extension communities in the above states. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Change in knowledge: the above activities resulted in the change in knowledge that Chinese Americans consumers are willing to buy specialty, freshwater seafood at premium prices. We learned that ethnic consumers are a profitable direct market for local seafood.

Publications

  • Rimmele, W. J. and S. Dasgupta. (2011) Willingness to Pay for Freshwater Prawn Among Asian Consumers in Kentucky. Kentucky Aquatic Farming, 24(1):7-9.