By creating value-added products and direct marketing their crops, rice producers can potentially improve their returns. But selling a crop to retail outlets isn't as easy as it sounds.

It takes a sound marketing plan, investing in a graphic designer to develop a logo and packaging, doing your homework to find reputable distributors and brokers, and logging hundreds of hours and miles to meet personally with grocery buyers.

"Be ready to really put your heart and soul into it," says Linda Raun, who with her husband "L.G." Lowell Raun Jr., grows organic Jasmine 85 rice near El Campo, Texas, and market it directly. "To be successful, you have to invest a lot of time and effort into it, and it probably won't happen overnight. It will take several years, and that's if you are producing something people even like."

Linda Raun speaks from experience. For a decade, the Rauns have slowly expanded their direct marketing to where it currently includes retail sales, mail order and Internet sales under the Lowell Farms label.

Choosing the market

The Rauns were looking for a value-added alternative to their commercial rice crop when they visited an organic foods store in Washington state while on vacation in 1989. They decided to grow a value-added product for the organic market.

"Jasmine 85 had just been released," Raun says. "When we heard about it and it's aggressive growing characteristics, we decided to try it. It has turned out to be a better marketing tool than the organic. The organic market is growing, but the Jasmine is what people like."

Working with representatives from the Texas Department of Agriculture and Texas A&M University, the Rauns developed a marketing plan.

Plan before marketing

Market research is one of the most important components of an overall marketing plan, says Danny Klinefelter, a Texas A&M professor of agricultural economics and an Extension specialist. "Just because you think you have a superior product doesn't mean the customer can differentiate it from others," he says.

This may mean conducting taste tests with panels or employing a firm that provides the service to see if you have a product with a potential.

Initially, you'll need to decide whether you're going to sell to retail clients, a processor or a wholesaler. If you go retail, Klinefelter recommends starting fairly small. You'll also need to establish name recognition that will differentiate your product from the nationally advertised brands. And how will you get shelf space and contend with the ever-increasing use of slottining fees by grocery chains?

You may decide that your rice has distinguishing characteristics that appeal to specific ethnic groups. Then you'll have to determine how to get your product into the small family-run stores that sell to those clients.

"You are going to have to work with their specific taste preferences for that market and find those retailers that sell into it or a processor that prepares rice for that market," Klinefelter says.

Those are but a few of the issues you'll need to address with market research before you move forward to writing your plan. If you've never taken a marketing research course, Klinefelter recommends reading up on the subject or attending a class. If you don't feel you have the time but still want to pursue direct marketing, there are other options.

"In many cases, unless you have the skill at it or are willing to spend a lot of time, you may be better off finding somebody who will do that type of work for you," Klinefelter says.

University and Extension agricultural economists who specialize in market research also can provide guidance.

Starting small

The Rauns started by promoting their rice in person to a few local retail grocery outlets. Slowly, they built up the number of grocers in the Houston area as well as San Antonio and Austin handling their product. If they wanted to continue growing, Raun says they realized they had to enlist the help of others, so they turned to a distributor.

They settled on a smaller, full-service one who handled specialty products and could develop relationships with the types of outlets the Rauns wanted selling their rice.

But going through a distributor can be chancy. "When you first start out, you have to go with a small distributor, and you are going to run the risk of them going out of business," Raun says. "You don't want to overextend yourselves. You're going to have to decide how much you are willing to risk. Once you're on the shelves, it's easier."

Linda also uses one broker to market their rice in California.

Little fish in big sea

As stores consolidate, direct marketing is becoming more difficult. When the Raun's first started, they talked directly to individual store managers who made buying decisions independently.

As chains grew, many decisions were moved from the local level to a central buying manager. And the chains now want to order enough product for all their stores. Small producers like the Rauns can't fill an order that large nor would they want to, Linda says.

Many grocery stores also have begun charging slotting fees, which Raun has escaped so far.

Mail order

Not long after their first bag hit the shelves, the Houston Chronicle in 1992 wrote a story about their operation. Raun began receiving calls from people wondering where they could buy the rice, prompting her to start a mail order business.

Though she admits mail order is labor and time consuming, she continues because it keeps her in personal contact with the end user.

More than a year ago, the Raun's began promoting their Lowell Farms brand over the Internet at www.lowellfarms.com.

Despite their success, Raun says they continue to experiment with other rice varieties and other crops that may provide another value-added product they can market under the Lowell Farms label. They still farm about 1,800 acres of commercial rice.