Marketing local products:
Short and long distribution channels
[ Summary ]
Marketing local products via short distribution channels
A few general factors
New consumer trends, which are leading people to seek healthier,
more natural products whose identity is associated with an area
(mountain, protected area, etc.) are opening up new market
opportunities for rural products.
1.1 Short distribution channels, opportunities
for enhancing added value
"Short" distribution channels enable producers to cut out the
intermediaries between producer and consumer. The shortest
distribution channel is therefore one in which producers sell
their product direct to the consumer (direct selling).
Short distribution channels provide opportunities to create
added value in the area and to emphasise the distinctiveness of
its products. As a result of the close ties created between area,
customer and product, such forms of selling make it even more
difficult to relocate local products.
However, in order to market products via short distribution channels,
the only way to minimise the risks of embarking upon initiatives that
have no future and are costly in terms of investment is to adopt
a rigorous approach.
The gradual approach to marketing
1.2 A gradual approach
A gradual approach - which is often possible in this case - is one
of the keys to success. This means making the heaviest investments
only after the products, customers and producers have been matched
through small-scale initiatives.
Ideally, a gradual uninterrupted approach is the very best formula,
but in practice, where there is not enough consumer potential in the
production area, the solution is to go immediately in search of
urban customers, either via short distribution channels (shops) or
long distribution channels, as is often the case.
In developing these activities a formal market survey is an
essential next step after the test phase. Although the assistance of
an external consultant can be very valuable at this point, not many
consultants are able to carry out a simple survey that is both
inexpensive and integrates the maximum number of producers into the
process. Taking the advice of colleagues who have already undertaken
this approach, through regional or national networks or the LEADER
European network, for example, saves time and targets the search
In view of the special characteristics of rural areas, most large-
scale initiatives are carried out collectively. In fact farmers and
craft workers rarely have the means to develop the product ranges
and make the necessary investment on their own. This is particularly
true when it comes to reaching urban markets which, in quantitative
terms, form the largest market in Europe today. So, one of the
important roles of support structures like LEADER local action
groups is to guide and assist collective players right through to
the project development phase.
Lastly, developing such activities calls for a continual-evaluation
approach. This means devising and recording the appropriate
indicators (turnover for each product, number of customers, etc.).
This provides the working basis that will guide future actions.
1.3 Capitalising on geographical or cultural proximity
Selling via short distribution channels takes advantage of nearby
cultural and/or geographical markets: local consumers, tourists
staying in the area and emigrants originally from the area are all
potential customers for direct selling. Producers use their own
social network to refine their perception of the demand. It is an
easy form of marketing, at least during the initial development
phases. The aim of selling via short distribution channels is to
raise the selling price and hence farm revenues, and since selling
activities are carried out locally, this helps to keep jobs in the
1.4 Recognising the distinctiveness of an area’s products
Certain local products are distinctive: they are the result of
special historical, geographic or agro-climatic conditions or of a
specific production method. Nevertheless such distinctiveness is not
necessarily properly promoted by traditional distribution channels,
or perhaps not at a remunerative price. By fostering direct contact
with the producer (or the area, via a local shop), direct selling
makes it possible to explain such distinctiveness to the consumer
and thereby enhance its value in the consumer’s eyes.
The area and its potential are promoted through local products.
Explicitly signalling their presence in the shop is one way of
raising awareness among the public - both visitors and the local
population - about the very existence of the area, its value, its
culture and its distinctive products.
Definition of a short distribution channel
Short and long distribution channels: a question of intermediaries
Throughout their journey from producer to consumer, raw materials
are subjected to a succession of processes and procedures by
intermediaries who share out between them any added value on the
product. The shortest distribution channel is “direct delivery to
the consumer”, where producers themselves sell their products,
processed or otherwise, to the final consumer.
At the other extreme, one of the longest distribution channels is
that of conventional agro-industrial production. This is where the
farmer produces the raw material; this is then processed into food
products by multinational industrial groups; and finally the
resulting standardised products are sold to the purchase centres of
leading supermarket and hypermarket chains. The terms “long” and
“short” distribution channel do not refer to the physical distance
between producer and consumer, but rather to the number of
intermediaries between producer and consumer. For example, if a
producer goes into town with a van to sell his product directly from
a hypermarket stand, he is selling via a short distribution channel.
There is a series of alternatives between the two extremes, in which
producers deliver their product to the consumer more or less
directly, sometimes through the intermediary of a restaurant or