| Information Sheet 9
Sell What You Grow Steve Bogash, Enterprise Consultant Overview: Selling fresh fruits and vegetables can be an excellent way to produce a good income off of small acreage by utilizing your resources in an efficient manner. Intensive horticulture production has the potential to net several thousand dollars per acre. Producing high quality fruits and vegetables is the key to market penetration and subsequently maintaining a lock on your targeted market share. Organic, ethnic and other specialty products have the potential of commanding a premium price over that of more mainstream items. The produce marketplace consists of two primary avenues to sell your product: wholesale and retail. In the wholesale market your product is typically sold through a middleman or wholesaler that resells your product to businesses that then direct sell your produce to the consumer. You get less for your product but are saved the effort of maintaining many accounts and can focus on growing your crops. In retailing and direct selling you must develop your clientele, service those same clients and collect from them. You get more for your product but are required to spend much more time on marketing and less time growing. Typically, unless you have plenty of money to invest in start-up, you will be direct selling through some of the markets that will be discussed in this fact sheet. Direct Markets: Farmers Markets: This is the most common method to use in developing a clientele base. Farmers markets have many advantages to the new produce grower: Provides excellent exposure - All businesses have one problem in common when getting started, that is: letting the public know about your product or service. The farmers market provides an excellent location to develop your salesmanship and display skills. Usually the municipality provides some advertising support and a central location that you could never get on your own. Networking with other growers - The other vendors at the market are good sources of reality-based information on a wide range of issues that effect your business. Time to develop cropping systems without the pressures of specific orders - Only the produce that is ripe and ready need go with you to market. In the beginning it is very difficult to balance the volume and variety of product that is harvestable in time for any given market. As a new produce farmer you are still learning what to grow, how much to plant, when to plant, etc. As your experience increases, it becomes easier to predict when your crops will be ready and then to accept preorders. Develop a clientele base - Many growers start at farmers markets for the exposure and actively promote the home farm produce stand, subscriptions or mail order business. Through the collection of names and addresses for a mailing list or providing ledger cards with your farms specifics you can entice your customers to follow you to your farm or order a subscription for delivery of produce. Modern consumers look to the products available at their town farmers markets as a healthy, local alternative to supermarket produce that comes from all over the world and is often not of the quality and freshness that locally grown can offer. They also provide the consumer with the opportunity to get to know the person that grows their food. Restaurants: For many produce growers restaurants are a logical step in balancing their sales in the direct marketplace. Once you get by the ofttimes difficult step of getting your foot in the door, restaurants can be good outlets since they use a fairly constant supply of similar items and have no shyness when it comes to specifying exactly what they are looking for in a product. Due to the restaurants high demand for specific product you must have a good handle on your inventory and future product availability to keep them as customers. Other considerations in dealing with restaurants include: Delivering your product on a schedule, Establishing a payment schedule, Packaging your product to your clients requirements, and possibly growing custom items for the restaurant trade. Roadside or On Farm Market: The general comment that determines the success in retailing is "LOCATION, LOCATION and of course LOCATION. Short of your farm stand being located along a major roadway you must develop your clientele off site as in a farmers market in order to sell produce successfully on farm. There is a great convenience and relief once your operation grows to the point that you can support an on farm market. No longer do you need to pack all the product for an entire day at the market and you are no longer limited to what your vehicle can haul in one trip. This convenience in having your outlet nearby can easily be offset by the now full-time need to provide an attendant to collect and package your products. Other advantages include: - The ability to carry products outside of your
regular line. An Aon farm market@ is in many ways an entertainment business and can open the opportunity to establish a pick your own business in conjunction with the prepicked sales outlet. Pick-Your-Own (PYO): While PYO operations have been on the wane for some time there are still some opportunities for these if your location and clientele match well this type of marketing. Today, PYO operations need to be located near population centers in order to provide sufficient traffic to sustain sales. In many areas, PYO's are synonymous with agritourism and entertainment farming since many of the most successful operations provide a wide range of entertainment. Typical entertainments include a petting zoo, hayrides and seasonal events like scarecrow making but can range to the downright strange like a tricycle grand prix track. PYO advantages: 1) Lessen harvest labor. PYO disadvantages: 1) Requires careful traffic management. Mail Order Sales: Mail order sales offer some unique opportunities to market a product as well as unique difficulties. First and foremost in the opportunities column is the instant ability to market to a wide region or nationally or even internationally. The range you cover is likely to be a measure of the depth of your pockets when it comes to advertising. If your product is fresh, you need to be able to ship quickly and package sufficiently for a reasonable chance of safe arrival. If you are processing a food product, you are immediately forced to deal with the Health Department. Your success will depend on a large degree on how well you can demonstrate your products advantages over the increasing stream of products available through mail order. Festivals, events and product shows are good avenues to show your product line, sample, share recipes and distribute order forms and other propaganda. Subscription Sales: This relatively new form of selling provides for a contract between the grower and buyer that shares the risks of production among both parties. Sometimes groups or cooperatives will form, hire a farmer to grow for them and share the bounty. More often, a grower will offer a limited number of subscriptions to the public and then provide a share of the harvest weekly over the season. The grower gets some or all of the cost of a share before production starts, thus greatly lessening the impact of start-up expenses. Usually, an end of market season survey of shareholders provides valuable feedback to improve or change the operation. Some growers will offer half subscriptions to smaller users or lower the cost per share to those that regularly assist in production or harvest. There are a host of other services and products that can come with a share including: flowers, bulk goods for home processing, delivery, etc. Marketing fruits and vegetables can be an excellent way to supplement your income provided you have your marketing planned before you start to plant. Growing annual produce is one of the easiest and lowest capital demanding businesses that the prospective agricultural entrepreneur can start. Fruits and vegetable production allows you to start small and grow into your business while sharpening your marketing and production skills. P95 |