DO NETWORKS IMPROVE THE EFFECTIVENESS OF PROMOTION FOR VERMONT WINE PRODUCERS

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0227160
• Project Start Date: Oct 1, 2011
• Project End Date: Sep 30, 2015
• Program Code: [(N/A)]- (N/A)

Recipient Organization
UNIVERSITY OF VERMONT
(N/A)
BURLINGTON,VT 05405

Performing Department
Community Development and Applied Economics

Non Technical Summary
Wineries are an important and growing sector of the Vermont agricultural economy, and yet little systematic information exists about the sector and the effectiveness of promotional strategies used by farmers to attract customers and tourists. Farmers need to maintain existing market shares while also expanding into new business areas, even as they face growing challenges from global competition.

Animal Health Component

50%

Research Effort Categories

Basic

50%

Applied

50%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
601	6030	3010	100%

Knowledge Area
601 - Economics of Agricultural Production and Farm Management;

Subject Of Investigation
6030 - The farm as an enterprise;

Field Of Science
3010 - Economics;

Keywords

vermont, wine, agri-tourism, network analysis, marketing,

distribution, promotion

Goals / Objectives
The proposed research applies emerging tools of network science to the issue of evaluating alternative promotional strategies used by multi-functional wine producing operations. In addition to providing socioeconomic and basic marketing data on wineries in the state, key outcomes of the research include a more systematic understanding of the independent effects of producers' network positions and characteristics; demographic variables; and promotional strategies used on each producer's effectiveness as measured by sales or visitors attracted per dollar spent on promotions. The significance of the work lies in the fact that it will provide actionable educational materials for helping farmers to take better advantage of various networks in marketing their products. In addition, the approach of applying network analysis to the evaluation of promotional strategies promises to be useful for applications in other parts of the food system.

Project Methods
A survey/interview with winery owners in Vermont will be designed to collect information regarding demographics and characteristics of farm and farm operators, such as farm size, years of establishing traditional and nontraditional operations, tenure of the farm, sales and distribution methods, annual sales from farm operation, annual sales from other sources, annual expenses of promotion and other marketing, other annual operating expenses, and number of employees. Demographic information of the farmers/operators collected includes age, gender, and education levels. The next set of questions focuses on expectations, experiences and decision-making paths from the farmers' perspectives. Producers are given a set of assertions related to the above questions, and respondents should reveal their personal perceptions by choosing the level of agreement or involvement. Following well-established and accepted procedures within the social sciences (e.g., Wasserman and Faust 2007; Jackson 2008), a conventional network survey will be developed listing each winery (estimated N=30, with a possible expansion to include producers who are not members of the VGWC). In interviews, respondents will be asked to indicate how frequently they interact with each of the other producers listed (frequency ranging from daily, weekly to annual or none (and other)); how important the relationship is to their promotion strategy at this point in time (Likert scale of 1-5 with 1 being not important at all and 5 being extremely important); and what the nature of the relationship is (open-ended question to be filled in by interviewer). The latter may involve questions such as, do you approach this individual for promotion information, for production advice, for credit, or for other transactions. Individuals who are cited more frequently in this manner are also those who have more prestige (clout and trust) within the network. This instrument provides the core of the network details for winery owners/operators. Winery owners/operators will also be asked about their relationships with (1) service providers including education, training and other type of consultation provided by UVM Extension, government agencies (e.g., Small Business Development Center) and private firms; and (2) other tourism-related businesses including hotels, restaurants, travel agencies, recreational establishments (e.g., ski resort), tourism attractions (e.g., Vermont Teddy Bear Company), and local/state/regional chambers of commerce. All of these connections focus specifically on promotional strategy, and the three groups were identified as key elements in promotional strategies in the 2010 study identified above (see Preliminary Results section). To verify producers' answers related to marketing, a selective sample of customers will be surveyed to gather demographic variables, attribute for various products and services, characteristics of purchasing patterns, and satisfaction levels related to Vermont wine establishments. Descriptive statistics, regression, and network analysis using UCINet, will be applied to analyze data.

Progress 10/01/11 to 09/30/15

Outputs
Target Audience:Target audiences reached by our project include winery producers, vineyard owners/managers, students (college and beyond), extension educators, service providers, researchers, new and beginning farmers, and policy makers. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The information and survey instrument developed in this project has been shared with more than 20,000 agricultural producers, service providers, market planners, researchers, educators, and policy makers in the US. We offered 6 workshops and webinars to offer training and professional development programs to more than 2,000 participants. Topics included in these workshops and webinars included - indentifying winery development opportunities in your own communities, understanding how network strategies can support individual producers, the trend of Vermont and US wine industry development, business planning and financial feasibility analysis, and diversification of winery operations. How have the results been disseminated to communities of interest?The results of this study have been shared with more than 15 professional conference, associations, and workshops at state, regional, and national level. More than 20,000 producers, extension educators, farm management specialists, researchers, students, and policy makers have received information about the importance of developing strong networks in promoting wine and other local foods. Results of this study have also been used to develop new teaching paradigm in Dollar Enterprise curriculum through Community Entrepreneurship program at the University of Vermont. More than 2,000 students at UVM have learned about network marketing and creating innovative team relationships. A new marketing paradigm has been developed using Vermont winery owners' experiences, published in 2 books, and been widely shared with producers across the country. Finally the results of this project become the foundation of 3 new USDA projects - understanding resilience of regional food networks and entrepreneurial strategies to support local farms, examining demand and supply of local foods, and developing new strategies to support effective farm labor resources. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Survey results showed that 11 out of 15 winery owners worked together to share information of marketing, production, management, and technical support. Four winery owners were identified to be "leading sources" in Vermont wine industry, due to their longer history and existence in market. Four wineries were newly established at the time of survey, so they did not have solid data to share yet. It takes at least 3 to 5 years for a winery to establish their own vineyard and produce wines. The most popular network strategy was "wine trail", "wine weekends", "wine festival", or collaborating in offering a variety of educational workshops and events. Vermont wine producers also work with other agricultural producers to co-promote Vermont products. Cheese, apple, and bread are the most popular collaborative products with wineries. Data and analysis also showed that wineries that had stronger networking capacity (defined by frequency and levels of information exchange) indeed were more profitable and competitive in market.

Publications

• Type: Journal Articles Status: Published Year Published: 2015 Citation: Liang, C. (2015). What Policy Options Seem to Make the Most Sense for Local Food? Choices, a publication of the Agricultural and Applied Economics Association. 1st quarter 2015, 30(1). Available online http://www.choicesmagazine.org/choices-magazine/theme-articles/community-economics-of-local-foods/what-policy-options-seem-to-make-the-most-sense-for-local-food
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Liang, C. & Dunn, P. (2014). Discovering heterogeneity of entrepreneursA comparison of food and non-food entrepreneurs, Academy of Entrepreneurship Journal. Vol. 20, No. 2, pp. 19-31.
• Type: Book Chapters Status: Published Year Published: 2013 Citation: Liang, C. Chapter 2 Innovative Marketing Strategies using Network Analysis, Innovations in Services Marketing and Management: Strategies for Emerging Economies, Editor: Anita Goyal, 2013, IGI Global Publishing. ISSN: 2327-5502.
• Type: Conference Papers and Presentations Status: Published Year Published: 2015 Citation: Liang, C. (2015). Influence of Network Sciences on Food Industry: A Comparison of Local, Regional, and National Perspectives, Hawaii University International Conferences on Science, Technology, Engineering, Arts, Math and Education, June 13-15, Honolulu, Hawaii.
• Type: Conference Papers and Presentations Status: Published Year Published: 2014 Citation: Liang, C. & Pescatore, M. (2014). Influences of Social Networks on Food Choices: A Comparison of Local, Regional, and National Perspectives, AAEA/CAE Network Symposium, Montreal, Canada, May 28-30.
• Type: Conference Papers and Presentations Status: Published Year Published: 2012 Citation: Liang, (2012). Do Networks Improve the Long Term Profitability for Winery Owners? Presented in the 2012 American Wine Economist Association Conference, Princeton University, New Jersey, USA.
• Type: Books Status: Published Year Published: 2012 Citation: Liang, C. and Goetz, S. (2012). What Works  Entrepreneurship and Community Development in the Northeast, Northeast Regional Center for Rural Development, http://nercrd.psu.edu/Publications/rdppapers/rdp52.pdf

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: The purpose of this project is to identify and examine networking capacity and key elements of networks influencing wine producers' advertising and promotional strategies. A new network marketing theory was developed and examined using local wine producer survey in VT; regional wine producer surveys in PA, RI, MA, ME, NH; OHand national producer information from the MarketMaker program. More than 20 workshops, presentations, and information sessions were organized to share findings with stakeholders and non-technical audience. Over 2,000 producers and managers were interviewed and visited in more than 25 states. More than 20 communities and organizations were interviewed to gather information about creative strategies and collaboration. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Survey results have been shared widely withmore than 3,000 producers, extension educators and service providers in more than 40 states and international audiences. Workshops have been designed and delivered to (1) offer producers a better understanding of the current situation of wine industry relating to multifucntional agricutlure operation; (2) assist producers to plan and design marketing strategies through collaborative efforts; (3) assist new and beginning farmers to learn from others' experiences, challenges, and barriers; (4) analyze impacts of network on marketing success and failure; and (5) offer strategies to analyze various farming levels with respect to farmers' profile, demographics, and entrepreneurial characteristics. We also supported the 2014 National Value Added Conference - the PI was the Planning Committee Chair for this conference. The focus of this conference was to deliver the most recent research, extension, and education information to stakeholders who are involved and interested in promotion value added sector in the US. How have the results been disseminated to communities of interest? Workshops, webinars, news articles, and education materials have been shared widely with stakeholders in more than 20 events. What do you plan to do during the next reporting period to accomplish the goals? Create more publications in a variety of forms to inform stakeholders using the most recent survey results. We are in the process of collecting more information from restaurants, institutions, and other organizations with respect to network formation and support systems. We are also collecting more surveys from consumers regarding wine use and consumption in domestic market.

Impacts
What was accomplished under these goals? New information with respect to website promotion, social media promotion, and other information sharing were validated through science-based analysis. Producers relied on network marketing were more satisfied with sales and business development, most of the producers work with friends and family members (existing alliance), and most of the producers used collaborative strategies to jointly promote a local brand name (such as wine trail, festival, and special events). The major issues for producers included spending too much time and effort on web design, and had a hard time to keep track of reliable records about effective methods and messages to share with consumers. For consumers, it was challenging to identify reliable information to follow, and not very many people really understood what local means. The next step is to identify types of relationship influencing on individual's decisions to participate in a collaborative effort, and how local and regional economic and social environment impact on producers to interact with consumers. This Hatch project led to three newly funded USDA project about local and regional food networks that will expand and continue developing and testing network marketing theories that will benefit all ag producers beyond wine industry.

Publications

• Type: Journal Articles Status: Published Year Published: 2014 Citation: Liang, C. (2014). Dollar Enterprise and Network Marketing Development - From Theory to Reality and an Experiential Learning Exercise Applying Community Entrepreneurship to Plan and Operate a Small Venture, 5th Edition, Kendall Hunt Publishing Company, USA. ISBN: 978-1-4652-4104-7
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Brown, J., Goetz, S., Ahearn, A., & Liang, C. (2014). Linkages between Community Focused Agriculture, Farm Sales, and Regional Growth, Economic Development Quarterly. Available online http://edq.sagepub.com/content/early/2013/10/12/0891242413506610
• Type: Conference Papers and Presentations Status: Published Year Published: 2014 Citation: Liang, C. & Pescatore, M. (2014). Influences of Social Networks on Food Choices: A Comparison of Local, Regional, and National Perspectives, AAEA/CAE Network Symposium, Montreal, Canada, May 28-30.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: 1. Liang, C. & Dunn, P. (2014). Entrepreneurial Profile, Characteristics, Expectations, and Outcomes  An empirical Study to Compare Rural Entrepreneurs with Urban Entrepreneurs, American Journal of Entrepreneurship, Special Issue: Rural Entrepreneurship, Vol. 7, Issue 2, pp. 79-100
• Type: Journal Articles Status: Published Year Published: 2014 Citation: 2. Liang, C. & Dunn, P. (2014). Examining entrepreneurial characteristics, motivations, barriers, and outcomes for small versus large multifunctional farm enterprises in New England, Journal of Business and Entrepreneurship, pp 64-94.
• Type: Books Status: Published Year Published: 2014 Citation: 2. Liang, C. (2014). Dollar Enterprise  From Theory to Reality and an Experiential Learning Exercise Applying Community Entrepreneurship to Plan and Operate a Small Venture on Campus, 5th Edition, Kendall Hunt Publishing Company, USA. ISBN: 978-1-4652-4104-7
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Liang, C. & Dunn, P. (2014). Discovering heterogeneity of entrepreneurs-A comparison of food and non-food entrepreneurs, Academy of Entrepreneurship Journal. Vol. 20, No. 2, pp. 37-61.
• Type: Conference Papers and Presentations Status: Published Year Published: 2014 Citation: Marasteanu, I., Liang, C., Goetz, S., Ahearn, M., & Brown, J. Spatial and Cluster Analysis for Multifunctional Agriculture in New England Region, Poster, Applied and Agricultural Economics Association, 2014 annual meeting, Minneapolis, MN.
• Type: Conference Papers and Presentations Status: Published Year Published: 2014 Citation: Marasteanu, I., Liang, C., & Goetz, S., How Does Multifunctional Agriculture Contribute to Rural Development? Poster, Applied and Agricultural Economics Association, 2014 annual meeting, Minneapolis, MN.
• Type: Conference Papers and Presentations Status: Published Year Published: 2014 Citation: Liang, C. (2014). Multifunctional Agriculture in New England - Implications on Vermont Tourism Industry and Rural Development, Webinar, June 4, 2014.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Presented 11 papers and reports as professional presentations, workshops, and invited speeches in8 conferences. Audiences included more than 600 scholars (research, teaching, and extension), over 2,000 producers, over 300 service providers, and more than 300 policy makers at federal, state, and local levels. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? During all the professional presentation oppotunities, we shared our network marketing theory with producers, service providers, and schoalrs (research, extension and teaching). We worked with the National MarketMaker program to showcase the effectiveness of network marketing, potential benefit and profit for producers, and value added for cusomers. We also demonstrated how to develop the network marketing strategies that would enhance collaborative and individual success to attract more customers, more sales, and more name recognition for winery owners. How have the results been disseminated to communities of interest? Resutls have been shared in the forms of journal articles, news release, and conference papers. What do you plan to do during the next reporting period to accomplish the goals? We plan to complete all the analysis from different levels of data collection, and to offer more interactive training sessions for producers, extension educators, and winery producers. We already plan to participate in 2014 Value Added Agriculture Conference in Baltimore, Maryland; 2014 American Wine Economics Association conference in Washington; 2014 Northeast Agricultural Economics Association conference; 2014 Agriculture and Applied Economics Association conference; 2014 Vermont Tourism Industry conference; and a few other meetings where producers, policy makers, service providers, and scholars will get together.

Impacts
What was accomplished under these goals? Two different evaluation methods were developed to assess network impacts on promotional strategies for winery producers in the Northeast region. The first one was a scale-level ranking system to evaluate social media applications and effectiveness for various public-supported websites, email, twitter, and facebook functions. This scale-level ranking system was introduced and used by semi-randomly selected consumers/visitors to identify their preferences of specific communication methods with winery producers. This evaluation is on-going, and we expect to analyze data in Spring 2014. The second tool developed was a survey instrument to collect winery producers' perceptions of using social media to promote wines. This survey was mailed to over 600 winery producers in the Northeast region (VT, NH, MA, RI, CT, and PA). We are still collecting data and we will complete the analysis in Spring 2014. One major achievement of this project was to develop an innovative network marketing framework that would assist winery producers to make optimal decisions when investing their time and resources in networking and social media promotion.

Publications

• Type: Book Chapters Status: Published Year Published: 2013 Citation: 1. Liang, C. Chapter 2 Innovative Marketing Strategies using Network Analysis, Innovations in Services Marketing and Management: Strategies for Emerging Economies, Editor: Anita Goyal, 2013, IGI Global Publishing. ISSN: 2327-5502.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Brown, J., Goetz, S., Ahearn, A., & Liang, C. (2013) in press. Linkages between Community Focused Agriculture, Farm Sales, and Regional Growth, Economic Development Quarterly. Available online http://edq.sagepub.com/content/early/2013/10/12/0891242413506610
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Liang, C. & Dunn, P. (2013) The Love of My Life or The Life I Love  Investigating impacts of new venture creation on marriage. Journal of Business and Entrepreneurship. Vol. 5, pp. 95-114.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Thilmany, D., Conner, D., Curtis, K., Liang, K., Mulik, K., OHara, J., Sullins, M., & Woods, T. (2013). Researching market and supply-chain opportunities for local foods systems: Setting priorities and identifying linkages. Journal of Agriculture, Food Systems, and Community Development. Advance online publication. http://dx.doi.org/10.5304/jafscd.2013.034.018
• Type: Other Status: Published Year Published: 2012 Citation: Liang, C. and Michahelles, M. (2012). We Eat Where We Live  The Role of Consumer Coops in Local Food Distribution, Resources, Western Regional Center for Rural Development, May 2012.
• Type: Conference Papers and Presentations Status: Published Year Published: 2012 Citation: Liang, C. (2012). The Circle of Life for Organic Farming in Vermont, Northeast Organic Farming Association of New York, Winter Conference and Research Symposium, Saratoga Springs, NY, January.
• Type: Conference Papers and Presentations Status: Published Year Published: 2013 Citation: Liang, C. and Su, Flora. (2013). Understanding the Relationship Between Multifunctional Agriculture, Community Resilience, and Rural Development and Resilience, Poster Presentation, Agricultural and Applied Economics Association, Washington, DC, August 4-6.
• Type: Conference Papers and Presentations Status: Published Year Published: 2013 Citation: Liang, C. and Slone, T. (2013). Multifunctional Agriculture in New England  Financial Implications, poster presentation, 2013 Northeast Organic Farm Association conference, Burlington, Vermont, Feb 15-17.
• Type: Conference Papers and Presentations Status: Published Year Published: 2013 Citation: Liang, C. and Dunn, P. (2013). Buy Local - Restaurant Owners Perceptions, Importance for Practitioners, and Policy Implications, 2013 Small Business Institute Conference, St. Pete Beach, Florida, February 14-17.
• Type: Conference Papers and Presentations Status: Published Year Published: 2012 Citation: Liang, (2012). Do Networks Improve the Long Term Profitability for Winery Owners? Presented in the 2012 American Wine Economist Association Conference, Princeton University, New Jersey, USA.

Progress 10/01/11 to 09/30/12

Outputs
OUTPUTS: The purpose of this study is to examine the closeness and gaps in social and economic networks between winery owners, retailers, and other service providers; and how the structure of the networks influence the profitability of the wine industry in Vermont. In the first of the project, 3 survey instruments were designed. The first survey focused on the producers (vineyard owners and winery owners) to gather information with respect to enterprise profile, operation, management, promotion, and social/economic network links. The second survey instrument was designed to evaluate the effectiveness and attractiveness of webpages developed and maintained by public service providers, such as state/local government marketing service and producer associations. The third survey instrument was designed to gather information from retail wine shop owners regarding their clients and vendors - types of wine in inventory, relationship with winery owners, relationship with wholesale, and promotional strategies at the retail levels. We are gathering survey results from different target groups at this point. We will complete the data collection in year 2, and move on to data analysis using the UCINet network analysis software and regression analysis. PARTICIPANTS: Vermont Tourism Data Center Vermont Grape and Wine Council Vermont Farms Association Vermont wine producers wine shops in Vermont TARGET AUDIENCES: wine producers in New England service providers in New England PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Wine industry has been growing significantly in the New England area since 2000. Winery owners, especially the newly established operations, are looking for information beyond production and marketing. It seems that more successful wineries have better outreach activities and collaborative initiatives that would improve their promotion and competitiveness. However it is not clear how the producers connect with others at different levels (production, marketing, and management). This study will provide a quantitative analysis to map the social and economic networks for wine producers, retailers, wholesale, and other service providers in Vermont. The impacts of the networks will also be captured by potential improvement in profitability, promotion, and other satisfaction measurements.

Publications

• Liang, C. (2012). Winery and Multifunctional Agriculture, Association for American Wine Economists, Princeton University, Princeton, New Jersey, June.
• Liang, C. (2012). Do Networks Improve Effectiveness of Promotional Strategies for Vermont Wine Producers Association for American Wine Economists, Princeton University, Princeton, New Jersey, June.