As any first year business student will tell you, there is a lot more to marketing than just advertising your product. The famous “Four P’s of Marketing” are; Product, Price, Place and Promotion. Here’s a quick tour of our efforts to take our compost to market.
We originally defined our Product as, the best quality compost in Oaxaca. Our intention was to sell worm compost from worms fed thermophilic compost, since that makes the best compost. Once we had good quality thermophilic compost, we decided to take that to market to see what we could learn about marketing compost in Oaxaca. We figured it would not be long until we could offer both thermophilic and worm compost. As it turns out, worm compost took us quite a lot longer to produce reliably. In fact we only just this fall got our worm compost production line working to our satisfaction so that we can offer it for sale.
If you are going to position yourself as having the best compost in town, you want to give it the best possible appearance. So we hired our daughter and artist, Quinn Dimitroff, to design our beautiful color label. We then placed her label on a durable gallon size ziplock baggie (our bulk compost is delivered in used sugar sacks with no label).
The other aspect of giving the best possible appearance is the screening process (even though lumpy compost would work just as well for the plants). Rigo and I were happy with a single 1/4 inch screening, but that is when Sarah stepped up and became our Quality Assurance Manager. For Sarah, nothing less than two screenings would do: the first pass with a 1/4 inch screen, the second with a 1/6 inch screen. This meant screening twice and rejecting more than half of the finished product, but the resulting product stands clearly above the rest (we work the rejected compost back into beginning of the composting process so there is ultimately no waste of material).
Our QA Manager at work, screening compost before (above left) and after (above right) we built our trammel screener. Paco is now working on an electric version of the trammel, which will make Sarah’s life easier.
To decide on Price, we researched the competition and decided to match their pricing, and beat their quality. Oaxaca is one of the poorest states in Mexico, so people are generally pretty price sensitive. Rigo says most people here would rather pay less for an inferior product. But even so we decided to compete on quality, not price. This has been a challenge for us in terms of profitability. Our sales price pretty much just covers our direct costs, but contributes nothing to overhead. Sarah likes to joke that we lose money on every sale, but we make up for it in volume. But we are hopeful that we can get our direct costs down over time and become profitable.
As for Place, we have been pleasantly surprised at how open most store owners in Oaxaca are to stocking our compost. We have found Mexicans in general to be very entrepreneurial, and store owners are pretty open to trying new products. I’m sure our “consignment” sales model doesn’t hurt. We got advice from a local business man that it’s best to make the store owners pay up front for the product, otherwise they will push other products where they need the sale to recover their investment. But in a poor state like Oaxaca, it makes it a lot easier for shop owners to accept a new product if they only have to pay for it AFTER it sells. We piloted the consignment model a few years ago, and have not looked back.
Valle Fértil thermophilic compost is now available in 10 retail stores. We have had our product in some other retail stores, but if a product doesn’t move the store owners give up after a while. They may not have an investment in our product, but they do have limited shelf space to consider. So not only do we need to get our compost into the stores, we need to help jumpstart demand.
About 2/3 of our compost is sold in bulk, delivered directly to customers, to feed the plants that adorn their homes, or restaurants.
And finally, Promotion.
People in Oaxaca love their potted plants (even more than in other parts of Mexico, or so we have heard). To try to understand our market, we asked one of our first retail stores what type of person was buying our compost. They said it was mostly older Mexican women buying it as a treat for top dressing their house plants. What marvelous news that it wasn’t just gringos!
We see lots of potted plants around Oaxaca. Many of the growing containers are quite resourceful and creative. We feel we have lucked out in terms of landing in a good local market for selling compost.
But we have also discovered that many Oaxaqueños would like to grow plants, especially vegetables, but don’t know how to go about it. So, one strategy we have developed to generate interest in our compost is to offer home gardening workshops in the locations where the compost is sold. This helps people learn to grow some of their own food, brings new people into our vendors’ stores, and gives us a forum to boast about how great our compost is. And we have found that the workshops themselves are more profitable than the compost we are trying to promote. In fact, as Sarah once pointed out, it’s the one thing we have actually made money at so far!
Above left: Sarah waiting for her ride to an interview on the local public television station to promote a Wicking Bed workshop. Above right: A Wicking Bed poster.
We have been hosting Wicking Bed workshops for about a year now. Wicking Beds are an idea that we got from the local Permaculture group. They are self-watering beds built from cheap or free materials, including fruit boxes, shopping bags, old clothing and recycled cans and bottles.
Sarah and I put on the first few workshops, me presenting in English, and Sarah translating into Spanish.
Then along came Katie Allen, a bilingual American who lives in Oaxaca year-round, who expressed an interest in getting involved in the workshops.
Katie now is in charge of the workshops, which have been expanded to include Worm Composting and Gardening for Beginners.
Katie also brings a wealth of experience with social enterprises, helping us keep our mission in view as we make decisions along the way.
We have most recently added to our team Katya Caravantes, a very talented college student with tons of local knowledge about urban gardening, AND she has experience teaching workshops.
We plan to have Katya teach the workshops going forward, as well as doing garden design and maintenance consulting.
But a funny thing happened on the way to the market. We found ourselves rethinking our whole business model. Compost is a commodity, so there is always going to be downward pressure on the price, no matter how good the product is. But a workshop is an experience, something people everywhere are increasingly willing to pay for. So we are now thinking of ourselves as moving from the Compost business to the Urban Gardening business. We will still offer the best possible compost to Oaxaqueños, but it will be combined and intermingled with Urban Gardening experiences.
So, being in the Urban Gardening business, we are now starting to think about new products like more durable, higher-end rooftop garden beds, and services like custom rooftop / in-ground garden design and consulting.
It opens up a whole new set of possibilities. And it also gives us more to talk to our customers about than just compost.