This is very long, but a section I am feeling confident in sharing. If you are thinking about becoming a farmer, this is an examination of the various ways to sell your products based on my experiences on both sides. I might release the Branding portion too (do you want it raw?) or take it with me to work on and finalize during my trip which starts on Friday!
Chapter 3 Marketing
Marketing is one of the most fun and invigorating parts of running a business. It’s how you get your product into the hands of the consumer. Marketing is what makes you into a legitimate, self employed farmer. And if the very word “marketing” strikes fear in your bones, rest assured that it will come so much more easily if you are following your passion. This doesn’t mean your product will sell itself, but it does mean you are a true life spokesperson. I am a successful marketer of my main farm product because I am truly passionate about it- if I didn’t absolutely LOVE duck eggs, I most likely couldn’t have forged a new food trend in my region. I cannot stress this enough, my #1 marketing tip- produce a product you love.
We have 2 primary elements to look at when it comes to Marketing your product- literally where and how; the point of sale (POS), and then the why and how; the process behind selling which I’ll refer to as Branding.
POINT OF SALE
The Point of Sale is just like it sounds- the point of selling your product- where and in which manner you will exchange your product for payment. It’s the logistics of selling. To make it sounds as important as it is- the POS is the place where the magic happens- when you sell your product you ARE a farmer! What’s your Point of Sale going to be? There are two primary venues for selling a farm product; direct retail or wholesale. You may decide to sell your farm products exclusively through one, or utilize both. There are many outlets within these two venues, and in this next section we’ll examine those various opportunities as well as the pros and cons of each.
There are many elements to consider when it comes to POS, and it’s essential you do this thinking and planning BEFORE you have your product ready to sell. The worst nightmare for a New Farmer, and a major potential threat to success is to have an amazing product ready to sell, but not having planned and lined up how it will be getting sold.
The first POS category is “Direct Retail” where you sell directly into the hands of your customer, such as at a Farm Stand, through a CSA program, a Farmer’s Market, or online. You get paid a premium and whole price, but selling retail means you do all the work of selling- vending, advertising, packaging, etc. Selling your product directly to your customers builds your community, your resilience, and eliminates the middle men who reduce the financial incentive for small farming enterprises. Some farmers love direct retail sales, love capturing the whole dollar from the customer, they love standing at their market stall or farm gate and engaging with customers and talking about their products, or marketing, packing and distributing their farm products in CSA boxes.
The second POS category is “Wholesale,” where you sell to an entity that then sells it to their customers. This can include grocery stores, grower’s cooperatives, distributors, and restaurants. With wholesale venues, you get paid less per unit, but you sell a bunch of product at once and don’t have to actually make each and every sale. Selling your product wholesale might mean you can focus more on farming and less on selling. Many farmers love the simplicity of bringing an order to a wholesale account, making the delivery and getting paid for the load of product all at once, sacrificing a bit of their profit margin so that they can get back out to the farm and farming.
Some farmers do some of both. It really depends on you and what you like to do, as well as what your farm operation entails. If you have a farm that needs lots of tending during the day, it could be dangerous to head out for the entire day to sell at a farmer’s market, unless someone else stays on the farm. You also need to be honest about how you feel about dealing with people. Some farmers are energized by interacting with customers, but some absolutely loathe face-to- face interactions, preferring to be in perfect solitude on their farm. Be honest with yourself about how you’ll be most likely to succeed at your point of sale. There is nothing worse for a customer than encountering a grouchy, anti-social farmer, so do us all a favor and choose the best point of sale to match your personality. Be reminded however, that whether you sell directly to a single customer or to a wholesale account, both transactions involve a customer, so if you are a real grouch, you might want to adjust your attitude to gratitude as you prepare for selling your product. Customers who pay you to be a farmer are all beneficial to you!
A quaint and rustic farm stand by the farm driveway, loaded with produce, eggs, bouquets, herb bundles, baskets of apples, maybe some frozen meat cuts in a freezer…it’s rather alluring to imagine. Unless you are on a busy road in a well populated area, however and have a wide range of products available to sell, this point of sale alone is not likely to sell enough product for you to make a living as a farmer. There are some exceptions as Susie Middleton on Martha’s Vineyard has shown. She grew her honor system farm stand business slowly and it is very popular, but she still sells her products through other venues as well. A Farm Stand could certainly be a great way to market your extra product, and if you feel comfortable doing the honor system, would take very little of your time. If it went better than expected, you could focus more on that as you grow your farm. One main concern if you didn’t have set hours of operation, would be keeping product out for long, unattended periods of time.
However, selling on the farm could be more promising than it seems, if you have the traffic or can bring it to your farm. Check in on the rules and regulations about what you are allowed to sell at a farm stand. Some states are open to you selling nearly anything that you’ve produced on your farm, while some restrict parking, signage and may even require a retail food retail license to operate. In our county, we can sell up to 1000 meat birds we raised and processed on farm, year round and even frozen, without any inspections or licenses. If we want to sell pork by the pound on our farm or at a farm stand, we’d need to have the pigs butchered in a state inspected facility, obtain a “retail food establishment” license and keep a meat-only freezer in a clean, neat area. If we raise eggs, we can sell them directly on the farm without any inspection, but not “pickle-bill” canned products or baked goods. Ask your Department of Agriculture for information, and don’t just do whatever you want until you get visited by the state and caught in the act- that is never a good way to run a farm business.
A farm stand could be so successful that you may end up making an actual on-farm store and lead you into more agri-tourism. You never know! That would be a whole other set of logistics and legalities to consider, and quite a bit more complicated.
Pros: Low overhead and risk, ease of sales in an honor system stand, you don’t need to go anywhere, potential to grow into something even bigger
Cons: High traffic is necessary, which is not possible in many rural regions, potential for theft in unattended stands, certain products may not be legally sale-able at a farm stand without licensing.
I think everyone knows what CSA stands for by now, but if you haven’t heard, it’s Community Supported Agriculture. The first CSA Farms were actually in Japan, where customers paid their farmer at the beginning of the year for their share of the season-long harvests, accepting the risks alongside the farmer. It’s a beautiful thing. The movement was started up in the US in the early 80’s by some progressive organic vegetable farmers. CSA programs can be all sorts of arrangements and all sorts of different food and farm products. You can find Yarn CSAs, Pickle CSAs, Fruit CSAs, Seed CSAs, Bouquet CSAs, Egg CSAs, Meat CSAs, Value-Added or Prepared Meal CSAs.
CSAs are starting to evolve into more of a prepay subscription farm product package, and the emphasis on the customer being expected to bear bad seasons out with the farmer has dissipated a bit. For instance, we always make sure to have something to put in our CSA boxes if that week’s harvest was a little lean, such as canned gods or extra soaps,etc. We want to make sure our members are as pleased as
possible so that they continue their loyalty to our farm. Despite the “loss” of total support, the CSA model is definitely still a very strong business plan in having the products pre-ordered and paid for.
For many farmers, having the payments come in ahead of time is the major choice for running a CSA. Your crops are presold. Only an unscrupulous “farmer” would take those prepayments and not deliver the very best they can for their members. That being said, some years, a crop or a farm can have devastating circumstances like floods, fires, predators, pests, early freezes, late snow. With CSA, the idea is that your customers have your back. But if they totally lose out one year, they might not come back the next. Something to definitely think through ahead of time.
One thing to consider with small scale CSA programs is the time it takes and whether it’s worth the money per share. If you had a weekly flower CSA, and charged $5 per week for 20 weeks, that’s only $100 per customer. If you had 100 customers and put together 100 bouquets each week, you’d be grossing only $10,000 for the season, which might not be worth it, and most likely is not enough income to make you into a full time farmer. If you had 500 CSA subscription bouquets to grow and prepare each week, there’s something more financially promising and rewarding. You could consider partnering with an existing CSA in order to offer their members something unique. We were even approached by a company that wanted to sell subscriptions to their veggie kids (a coloring book!) program along with our CSA. Some farms with a veggie CSA offer additional share options, like a bouquet or eggs or what have you. They then add to their gross sales for the whole CSA, without too much more effort. Just consider the headache factor if you do too many options available and have to juggle them all out everytime for each delivery.
Legalities to consider when starting a CSA are important for your success as well. If you are operating a Meat CSA, make sure you understand what the rules are, and if you cross state lines to deliver your meat, the animals must be slaughtered in a Federally Inspected Plant. Produce generally has no regulations, but if you start cutting things up, drying them, or processing them, you may need to do that in a commercial kitchen to be legal. You also may want to carry insurance for this type of program, although Joel Salatin argues in his book “Everything I want to do is illegal” that if you don’t have insurance, you’re less likely to draw troublemakers who might make a claim or complaint frivolously.
Complimenting, not competing. You want to approach starting a CSA carefully, because not only are you asking people, your future customers, to trust you and your farming skills, but you also don’t want to compete with existing CSAs. It’s a bad idea to come to the table trying to out do your elders, and low ball their existing business. Again, the Golden Rule: how would you feel if a new farmer came in to your market and tried to take your customers? If there are many CSAs already in your region, serving the same market base, think outside the box and either do something very different or go after a new market share. The number of potential customers in a city is enormous, and the number of people who
sign up for CSA share programs each year is growing. I just want to caution you to be respectful of what is currently in existence.
Think of offering a CSA in the off-season. There are also many “un-tapped” marketing reaches, where you can glean customers that may have never thought seriously about joining a CSA, such as
libraries and book clubs, gyms and health care centers, rotary clubs, hospitals. Ask your friends and family for ideas of groups they are involved with. You can offer to have an open session introducing your farm and how the CSA model works, and at the very least post flyers or brochures.
Decide if you’ll have the customer share the risk with you, or if you’ll give out refunds if something horrible happens. Meat is a tricky and expensive product to raise, but customers don’t seem as forgiving about the possibility of taking on all the risk with you. We always raise extra birds so if we have losses, we still have their number of birds. If we don’t have losses, then we get to eat more chicken, or sell the extras. Raising meat has not quite gone the way of vegetable CSAs where the consumer is willing to share the risk. We don’t let people back out of their deposit, that’s about the only risk on their end, but we do believe they need to get all that they paid for.
Pros: Your crops/products are presold. Your customers become your patrons, you are THEIR farmer. Creating beautiful, diverse boxes of food you’ve grown, all collected together is very gratifying. Generally you have one day of picking and packing, one day of delivering and then 5 days to be just maintaining things on the farm, no running around trying to sell your products.
Cons: You have to market yourself and your farm really well. Organizing a CSA is a crazy thing. Organizing the gardens for a constant stream of perfect crops is a crazy thing. Dealing with drop sites can be maddening. You have to plan everything out for the number of shares you hope to sell before people have all signed up. It can be a tight market if there are lots of other farms doing CSA in your area. You have to do all the communications with your members. You are prepaid for your crops, which is super stressful when things don’t work as planned. If you don’t do well, you might lose all your customers.
Selling your farm product at a Farmer’s Market might seem to be the most obvious choice for marketing, but it’s not a good fit for many farmers. You’ll need to devote the entire market day to being off the farm, rent a booth, carry insurance, make nice displays with bountiful products, load them up for market, unload and arrange them, and then reload anything that does not sell at the end of the market.
If your farm is located close to a busy and populated area, however, all this “trouble” can be make a farmer’s market very worthwhile financially. It is your job to be a successful farmer, and jobs are work. Some farms seem just made for Farmer’s Market success- they have great presentations, beautiful products, and unique offerings, but rest assured, they most likely worked very hard to get to that point. Make a goal for what your sales would need to be each week in order to make it a profitable endeavor, and set up a marketing plan to help you achieve that goal. Social media can be an incredible tool to instantly reach customers as they go about their busy lives, to remind/inform them when you’re heading out, what you’ll have for sale, what’s limited in quantity or the very best in-season that week. The food truck revolution going on in some cities has thrived due to their constantly keeping in touch with their customers. Some of them are parked at a new location each day, and so they will instantly message and tweet out the spot and menu as the lunch hour arrives. You can do the same for your market stand. Marketing your farm at farmer’s market doesn’t mean just standing there if you want to be successful.
Cons: Farmer’s Market’s are not always the easiest way to sell your farm product for several reasons. Most Markets will require you carry insurance. Depending on your products, you may need to get licensed by the state to transport and sell them at a market. You’ll need to have a consistent supply of
high quality products in potentially large volumes. You’ll need a tent and tables and attractive, informative signage. You’ll need to be friendly and talkative and standing for hours. You’ll need to make sure you are not stepping on any other farm’s toes with variety, products and prices. Most markets will have a weekly or season long table fee, which might be a flat rate, or a percentage of your sales. You’ll need to be away from your farm for nearly the whole day(s) when you are at the market. Some days you might go home with less income from sales than it took in gas money to drive there- you have to do your time before you have a steady customer base coming to your booth. Sometimes, no matter how hard you try, a market might never pick up enough steam to become a worthwhile endeavor for your time and effort. You might come home with all the products you picked, packed up and brought, and deal with losses on perishables. There is a lot of loading and unloading, and if your products are heavy, this is something to consider.
Any products that are not plain vegetables or fruit are usually highly regulated. Prepared foods, cut fruits and veggies, dried herbs, potted plants, wild mushrooms are all potentially suspect to more requirements to sell at a market. If you are thinking about selling meat at a farmer’s market,you’ll need to figure out how to rotate production and supply. If the market opens in June, you need to have meat to sell in June. You also need to make sure you are in compliance with the law, as meat products are highly regulated. Most states will require meat products to be slaughtered and butchered in a state or USDA licensed facility, and the labeling requirements are very specific as well. You’ll need to investigate which licenses you’ll need to carry as a transporter and vendor of meat products. You don’t need to try to figure it all out on your own, go to your state’s Department of Ag and ask them to help set up to be in compliance, and if you farm is in one state and sells in another, get straight answers about that too.
Online sales can come from connecting online, with the actual sale taking place in person, or a customer pays online,and you ship them the product. If you are selling a farm product that is not highly- perishable, and not too fragile, you may want to look into online sales. There are many selling venues to explore for online sales, such as Etsy, locaharvest.org, or a simple paypal button on your website. Shipping products can be lucrative and rather simple, if they won’t break, like soap or homespun yarn, or won’t need refrigeration, like fertile hatching eggs. Shipping products can be quite a bit more complicated logistically and online sales are generally not a good fit for many food products from a farm. But it can be something to think about, as the internet covers nearly the entire planet,
covered with potential customers.
Examples of selling in person after the initial online contact could include craigslist, Farmigo (a virtual farmer’s market concept,) a facebook page, or through Twitter. You take a nice picture of your product for sale, with price, quantity and other relevant details and put it out there. People could be required to come to you to buy, or you could have a date and time you’ll be coming to town to meet up for the sale. you have an abundant seasonal crop in your garden, you could post an ad for whatever surpluses you have for sale or offer a u-pick If you had a bumper crop of storage veggies, you could put together a one time Winter Share box, post a picture and take preorders, then either meet customers at a drop point to exchange product for payment, or have them come to the farm. Keep your mind open. Follow your state’s regulations for sales of meat or processed foods- but consider taking orders for chickens ready to go on your farm on poultry processing day, or if you had pork halves processed, boxed, and ready to go, you could take orders and possibly deliver.
Pros: You don’t have to maintain a beautifully presented and bountiful looking inventory, you can sell as you go, you can grow more as your business grows, no commitments, no standing at a market booth, everything is done on your time schedule, allows great flexibility, you directly benefit from your own level of effort, you can exit this venue without any penalty.
Cons: Lots of one on one communication, detail and follow through work, lots of trust in strangers is required, might not have enough sales this way to make enough volume of income, you might be marketing in the wrong venue or encouraging competitors, there’s no guaranteed market, might not work and you have lots of unsold product, it takes drive to continue on if you don’t have enough much response.
Just thinking about wholesaling farm products can be intimidating for a new farmer. Even the word “wholesale” conjures up images of a big box store. But all it means is your Point of Sale is with someone who does the work of selling for you. In return for this freedom of time and overhead, you receive less money per product, but you can sell more products at once. So if you are great at raising something, and would prefer to spend your time raising it and not marketing it, consider wholesale as a great POS partner. What wholesale requires from the farm is a steady volume, a consistent product and a fair price.
Within wholesale, there are many different venues; stores and shops, grower’s cooperatives, distributors and finally restaurants. Each has it’s own set of particulars to examine before deciding if this is a good fit for your farm product.
1)Stores and shops
Retail accounts, such as natural food stores, grocery stores, boutiques, etc all have shelves to place products for sale. These shops offer the benefit of a wide assortment of products for customers to select from and buy. There is a high overhead to operate a store front, and so each item for sale not only needs to sell regularly, but also needs to make them enough profit (that’s what they call margin) to keep running their business.
When you approach a retail account, consider what products they currently sell, what the prices are, and if your product would do well there. For instance, if the store currently seems to have a supplier of pastured chicken, and you come to them with another pastured chicken, with no other differentiation, they might turn you down. But if your chicken is pastured AND fed organic feed, that might be something they would be interested in trying to sell.
Most retail accounts will have one buyer for each department- such as produce, grocery, refrigerated, or meat. These buyers like to see and taste your product before making the decision to carry it in the store. You need to know your cost of production before you give them a sample or a price, as your wholesale price will be added onto by the store, and if it is too high, they might turn your product down as well. Each department in a grocery store usually has different margins, so ask the buyer for their feedback on your price and how it will appear on their shelf. It is imperative that you first know what it costs you to produce your product, including your time. Along with your wholesale price, the buyer will like to
know about the quantity available (don’t over promise), when it will be available (is it seasonal or year round,) the case quantity minimum for them to order (by the case is usually 12 units) and how they can place orders with you (email or phone.) You want to ask them what their delivery preferences are and how invoicing is best done for them. Ask if you can get 7 or 14 day terms on your invoices so that you get paid relatively soon after deliveries. 14 days seems to be the norm, but you could ask for sooner. Just be aware that being demanding, especially right away, might not be in your favor.
Pros: Your product will reach a greater audience, while you do not have to stand there and make each sale. Stores and shops will often help you promote your product, as it is in their best interest to sell large quantities. Generally you will get paid whether they sell your product or not.
Cons: You need to be consistent and your product needs to be consistent. You need attractive and legally approved packaging. You do not have an interface with each customer, so your product needs to sell itself. You won’t get as high of a profit on each item as you would selling directly- your wholesale price has to lead to an approachable retail price.
The co-operative model has a long history in agriculture, based on the power of numbers. Growers of a same product aggregate their production together to increase the quantity available for sale, the idea being that 100 farmers growing the same product can supply one large account, whereas one farmer most likely cannot grow enough to do that. A co-operative is very different than a wholesaler, however,
because the farmers are the owners of the business entity and they all equally have a vested interest in the co-op’s success.
There have been some unique farmer’s co-operatives formed and still in operation. Some have become an outlet for a large variety of farm food products, like the Wisconsin Grower’s Co-operative. The trickiest thing for a diverse grower’s co-operative is to ensure the quality is up to the same standard among st all the grower/owners.
Forming a grower’s co-operative is a whole other topic, but if there is one already in existence near you, it’s worth investigating the possibility of joining them. The main issue I see, honestly, is that there can be power struggles, especially if the quality is not consistent among the members, or if one member is doing more than their share of the work of operating the co-op. The most successful co-ops seem to
have one person who leads and directs the group, and this has to be transparent as operations get underway. The head person often becomes a much-needed manager, and not a farmer so much anymore. This direction and management is needed when trying to market various farm products, get
them collected from the farms and delivered to the accounts.
Pros: A guaranteed market for your product- you grow or produce what the cooperative needs, as designated in early season planning meetings. You know the price you will receive, also (usually) designated in the planning meetings, so you know exactly how much to grow to make a living. You do
not have to do any of the marketing.
Cons: You have to work as a part of a group, and are not totally independent in your decision making. If your product isn’t up to quality standards, it may not be accepted and you may not get paid what you’d planned on. You won’t make the same profit if you sold your product directly. You are highly
dependent on the cooperative to succeed with sales, if it does not, you may have a lot of product with no backup plan.
Many stores, institutions and restaurants do not have time or the staff to deal with small quantities, individual ingredients, or many farms and they prefer to order their ingredients, produce and other farm goods through a distributor. Distributors serve their accounts, and they have to do it well, or another distributor will take their place. They are the quintessential middle-man; they buy your product and then sell it to another wholesale type account who will then sell it or use in to make something which they sell.
Pros: Distributors are professionals at distributing products. They have many, if not hundreds of customers, who each serve hundreds, if not thousands more. Because of their multiple customers, a distributor is able to handle a large volume of product all at once, which is great for seasonal products and scaled-up farm production. Distributors may serve accounts you would never be able to approach on your own, and serve many more than you are personally capable of serving.
Cons: They will mark up your product to a customer who will mark up their cost- so you will not be making anywhere near the full dollar. There is no commitment on their part to buy your product, and no set price for you to plan your business around. You are not involved with any decision making. If your product is rejected at any point, you may be expected to give credit without having direct involvement to find out what happened.
Everyone knows the “Farm to Table” movement is hopping these days. More and more restaurants are featuring seasonal and local foods, farmers are being spotlighted on the menus, and restaurants will pay good prices for high quality and unique ingredients. Seems like a dreamy relationship for a farmer to consider!
If you get a restaurant account, it is imperative that you work with the chef and talk about what your seasonal bounties and expected quantities will be, before the time is upon you.
Pros: Selling to restaurants can be very lucrative, as you often will net a better price than selling to a distributor. Restaurants excel at taking obscure, unique and seasonal or specialty products and working magic with them. They may buy a diversity of products from your farm. They can make you feel like a rockstar, and all you do is grow the product.
Cons: Not all restaurants are interested in dealing directly with farms. The many who do may already have a core of farmer purveyors and unless you have something unique to offer, you may be turned down. Restaurants are often high maintenance and very reactionary, their ordering can be inconsistent and sometimes in small volumes. It is often expected that you will fill the orders no matter the size, or you may risk losing the account. There is no guaranteed sale, or guaranteed price. Restaurants usually have longer-out terms on their invoice payments.