ATTRAnews - Newsletter of the National Sustainable Agriculture Information Service

October 2009
Volume 17, Number 5

Newsletter of ATTRA - National Sustainable Agricultural Information Service: A project of the National Center for Appropriate Technology (NCAT). This issue of ATTRAnews is available online.

Planning and Planting for Your Markets

Until recently, most farmers and ranchers just raised food and animals. Someone else did the marketing. Now many producers sell their own products, hoping to capture more of the consumer dollars. Growers are also adding value to what they raise and creating new products. In this issue of ATTRAnews we offer tips and share guidelines for some of the best ways to market what you produce.

In this issue:

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Golden Rules of Marketing

Flowers at a farmers' market in Fayetteville, AR.
Flowers enliven the busy farmers’ market in Fayetteville, Ark.
Photo by Jim Lukens

Adapted from ATTRA’s Agricultural Risk Management Guides, which are available in English and in Spanish.

Know what you are selling. It is more than just the product. It’s a bundle of valuable things that are appreciated by your target customers.

Know who you are selling to. Each group of customers has a different set of characteristics and needs. You have to adapt your sales approach to meet these demands.

Know your own story. Your business’s story adds value to your product and you should emphasize it. You need to be able to tell your story in the time it would take you to ride an elevator to the top of a building with a potential business investor.

Don’t make assumptions. Don’t guess about the viability of your business plan or the behavior of your customers. Find some way to prove what you think is true.

Be customer oriented, not product oriented. Think, “My customers want lettuce. How can I get it to them the way they like it?” Don’t think, “How can I find someone to buy my lettuce?”

Sell features and benefits. Say, “This red lettuce contains more vitamins to keep you healthy,” not just, “I have red lettuce to sell.” Each feature has a benefit that your customers value. Point these out to make a sale.

Be a price maker, not a price taker. Don’t sell commodities. When you’re selling something that can’t be distinguished from another farmer’s product, you can’t control the price. If the other farmer has more to sell, you will lose.

To manage risk, diversify carefully in all directions. Growing many crops for many kinds of customers will reduce your risk of loss. But your management job can become overwhelming and then your quality and service will slip. You must strike a balance between diversity to manage risk and management time to maintain quality.

Start as small as possible and learn the market. Find the smallest way you can enter the market in order to minimize your risk. Once you learn how it works, you can increase your production.

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Plan Ahead for New Products

It’s a chicken-or-egg situation. How do you know you can produce something until you try? And how do you know you can sell a new product until you have it in hand to show people? The answer to both questions is: produce a small amount of product the first time. This way, any mistakes will be small and less costly. If you produce a large supply of a product without first securing your market, you may not be able to sell it, no matter how well it turns out. The take-home message is: experiment on a small scale this season to line up your market for next season.

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Marketing Resources

National Agriculture Library’s Alternative Farming Systems Information Center (AFSIC) offers extensive lists of resources on practical topics such as direct marketing, on-farm enterprises, value-added products, farm business planning, farm animal welfare audits, certification programs, and alternative crops. Telephone 301-504-6559.

Agricultural Marketing Resource Center is a national information resource for value-added agriculture. The center is a national partnership of land grant institutions and state departments of agriculture.

Localharvest.org is a comprehensive national self-listing directory of producers who sell to the public.

computer picture

Eat Wild is an online marketplace for pasture-based farms and ranches.

North American Farmers’ Direct Marketing Association provides networking about all kinds of farmer direct marketing, concentrating on farmers’ markets and agrotourism.

Sheepgoatmarketing.info is a national resource for sheep and goat marketing.

Price reports are available from several online directories such as those of the Rodale Institute and the Maine Organic Farmers & Gardeners Association. Both organizations offer an abundance of information about good farming and marketing practices.

Online farmers’ markets may be informative: www.co.rockingham.nc.us/vfm/farmlist.htm; www.locallygrown.net; www.discoverfrederickmd.com/farmersmarket

Access e-Commerce, from the University of Minnesota Extension, works to enhance rural development through electronic commerce.

Market Maker helps producers in more than a dozen states promote their operations and products.

Southwest Marketing Network provides extensive resources for producers.

Publications

Growing for Market magazine publishes practical indepth articles about how to make a living on a small farm. Telephone 1-800-307-8949

picture of books

Sell What You Sow! The Grower’s Guide to Successful Produce Marketing

The New Agritourism: Hosting Community and Tourists on Your Farm

The New Farmers’ Market: Farm-Fresh Ideas for Producers, Managers and Communities

All three books are available from: New World Publishing, 11543 Quartz Dr. #1, Auburn, CA 95602, telephone 530-823-3886

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Publications about Marketing from ATTRA

Looking for products to add to your farm’s output? In addition to this list of publications about marketing, ATTRA has hundreds of publications about specific crops, livestock, processing techniques, and organic and sustainable production methods that can diversify your operation and add to your bottom line. These are all available for free. You can see and download them at ATTRA's web site. Call 1-800-346-9140 to order a paper copy.

Adding Value to Farm Products: An Overview IP141

ATTRA publications.

Adding Value through Sustainable Agriculture—online only

Agricultural Marketing in the U.S. Southwest IP251—print version only

Beef Marketing Alternatives IP290

Bringing Local Food to Local Institutions IP242

Community Supported Agriculture IP289

Direct Marketing IP113

Economics of Grass-based Dairying IP210

Entertainment Farming and Agri-tourism IP109

Adding Value through Sustainable Agriculture Entrepreneurship: Overview and Resources —online only

Enterprise Budgets and Production Costs for Organic Production RL041

ATTRA publications.

Evaluating a Rural Enterprise IP041

Farmers’ Markets: Marketing and Business Guide IP146

Food Miles: Background and Marketing IP312

Grazing Contracts for Livestock IP247

Green Markets for Farm Products CT140

Keys to Success in Value-Added Agriculture IP172

Local Food Directories—online only

Market Gardening: A Start-up Guide IP195/201

Marketing Organic Grains CT154

Marketing Strategies for Farmers and Ranchers IP181—print version only

Moving Beyond Conventional Cash Cropping IP201

Natural Livestock Feasibility Study IP347

New Markets for Your Crops IP328

Nuevos Mercados para Su Cosecha SP309—papel o audio

Organic Marketing Resources IP124

Pork: Marketing Alternatives IP153

Selling to Restaurants IP255

Start a Farm in the City IP350

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Pros & Cons of Selling Directly to Consumers

Farmers' Markets
  • PROS
  • Highest margin—full retail
  • Can sell a little or a lot
  • No standard pack or grade
  • Good market intelligence
  • CONS
  • High selling cost per unit sold
  • Hard to move large volumes
  • You may not like selling face-to-face
  • Market schedule is grueling
Roadside Stands
  • PROS
  • High margin—full retail
  • Very high profit per unit
      after break-even
  • No standard pack or grade
  • No transport cost
  • Steady cash fl ow
  • CONS
  • Highest overhead expense
  • Have to keep it staff ed
  • High regulatory risk exposure
  • Location is critical
  • Must keep a clean farm
  • Management is intense
Community-Supported Agriculture - CSA
  • PROS
  • High margin—full retail
  • Best risk management
      with constant buyers
  • Shares production risk with
      CSA community
  • Reduces the need for
      operating capital
  • Can farm more ecologically
  • No standard pack or grade,
      light post-harvest needs
  • Emotionally gratifying; you
      see your product from seed
      to plate – and build a
      community in the process
  • CONS
  • Requires very heavy, skilled
      marketing management
  • Requires superb growing skills
  • Requires very careful planning
  • Positioning must be unrelenting
  • You are selling your story more
      than you are selling produce

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Pros & Cons of Selling Directly to Restaurants

  • PROS
  • Easy first sale
  • High margin
  • Purchase by the carton
  • May buy a little or a lot
  • Good market intelligence
  • Local
  • Reliable customers
  • Do not require a standard pack
  • CONS
  • Small order size/frequent delivery
  • Picky—require top quality
  • Slow pay
  • Require personal attention
  • High turnover of buyers
  • Must have a harvest schedule
      in advance
  • Require a specific delivery time
      window, such as 9 to 11 a.m.

Tips for Selling Directly to Restaurants

  • Sell with samples to the executive chef, but build a relationship with the sous chef in case the executive moves on.
  • Make sales calls from 9 - 11 a.m. and 2 - 5 p.m.
  • Give the chef a schedule of what you will harvest and when, and keep them informed of changes and upcoming new products.
  • Ask constantly about their needs, including pack, size, variety, post-harvest preferences and new items.
  • Take orders by fax, but also use the phone.
  • NEVER miss a delivery.
  • Don’t change your prices often.
  • Try to always have something to sell them, so that you never break the pattern of delivery. Always bring in something new for the chef to taste. For insight, see www.chefscollaborative.org.
  • Figure out what your minimum average order size is and decide how long you will give the customer to reach it.
  • Use the chef as your best source of market information. They will know what the next big thing is before you do.
  • Know how the chef is using your product and be prepared to talk about other ways to use it.
  • Make sure that you, your delivery person, your label, your prices, your pack, and your attitude all tell the same story.

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Pros & Cons of Selling to Independent & Small Grocery Stores

  • PROS
  • Large order size/frequent delivery
  • Fair margin
  • Buys by the box, pallet, or bin
  • Sometimes local
  • Potential for co-marketing
  • Will buy a range of products once
      you have introduced the first
  • CONS
  • Hard first sale; slow pay
  • Few customers
  • Potential bureaucratic barriers
  • Insists on standard pack
  • Must have good post-harvest practices,
       keep produce clean and cold
  • Price sensitive

Tips for Selling to Independent & Small Grocery Stores

  • Be professional, reliable, and on time. Find the decision maker, but build relationships with everyone who handles your product.
  • Take advantage of what makes you valuable to the store: you are local; your product can be more ripe (true vine-ripe tomatoes can be brought right from the field); you are entertainment for the buyers and put them in touch with the farming side of their business; you are a marketing opportunity to them.
  • Provide waterproof point-of-purchase cards about your farm to fit the store’s displays.
  • Choose a signature product, and then piggyback other products to broaden your line. Be the produce buyer’s tomato guy, but sell a few boxes of peppers and cilantro and basil with each delivery.
  • Ask when to make sales calls and deliveries, and then try to develop a steady routine.
  • Give the buyer a schedule of what you will harvest and when, and then keep them informed of changes and upcoming new products.
  • Ask constantly about their needs, including pack, size, variety, post-harvest preferences, and new items.
  • Don’t change your price and try to get an agreement for regular deliveries.
  • Try to always have something to sell them so that you never break the pattern of delivery.
  • Figure out what your minimum average order size is and decide how long you will give the customer to reach it.
  • Make sure that you, your delivery person, your label, your prices, your pack, your point-of-purchase cards, and your attitude are all telling the same story.

These pros, cons and tips are adapted from ATTRA’s Agricultural Risk Management Guides, available in English and Spanish.

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Evaluating Your Resources

Ask Yourself These Questions Before Starting a New Enterprise

picture of restaurant.

Marketing

Where am I going to sell the products?
Who is the customer?
What is the size of the potential customer base?
Where do the customers live?
How will their location influence my selling to them?
What are the customers’ needs and desires?
Am I going to sell directly to consumers?
Am I going to sell wholesale to the commodity market?
What seasonal price fluctuations can I expect?
What quality standards must I meet?
How much time and fuel will it take to reach my markets?
Are there legal or food-safety considerations?

Personal

Do I have time to devote to this new enterprise?
Does the workload correspond to the season I want to work?
Will the new enterprise complement my current enterprise?
Do I have written objectives describing the desired outcome?
Do I have the skills and experience necessary to do this?
Do I like to supervise people?
Have I managed a business before?
Do I have enough personal energy to do this?
Can I count on my family members for support?
Do I care what the neighbors think about my new enterprise?
Why do I want this enterprise?

For Land-Based Enterprises

After you have determined that the enterprise is something you really want to do, consider these additional questions.

Land

What is the water drainage like?
Are the soils suitable?
What is the seasonal rainfall pattern?
What will happen to my enterprises during a flood or drought?
Are these plants or animals adapted to this region?
Is water available for irrigation or watering livestock?
Do I want concurrent uses for the land, such as wildlife
conservation, fishing or hunting?

picture of farm buildings.

Buildings and Machinery

Do I have adequate facilities?
What additional machinery will I need?
Can I rent or borrow machinery or storage facilities?



Labor Needs

How much labor will be required?
What is the source of labor?
How much will it cost?
Is seasonal labor available?
Will I need housing for my workers?
Does this enterprise use existing labor in off seasons?

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New from ATTRA

New and Updated Publications

New Value-Added Guide from ATTRA

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ATTRAnews is the bi-monthly newsletter of ATTRA - National Sustainable Agriculture Information Service. The newsletter is distributed free throughout the United States to farmers, ranchers, Cooperative Extension agents, educators, and others interested in sustainable agriculture. ATTRA is funded through the USDA Rural Business-Cooperative Service and is a project of the National Center for Appropriate Technology (NCAT), a private, non-profit organization that since 1976 has helped people by championing small-scale, local and sustainable solutions to reduce poverty, promote healthy communities, and protect natural resources.

Teresa Maurer, Project Manager
Karen Van Epen, Editor
Mary Ann Thom, e-newsletter production

Subscribe to ATTRAnews

Comments? Questions? Email the Weekly Harvest Newsletter editor Karen Van Epen at .

ATTRA - National Sustainable Agriculture Information Service
PO Box 3657
Fayetteville, AR 72702
1-800-346-9140
1-800-411-3222 (Español)
www.attra.ncat.org

National Center for Appropriate Technology (NCAT) logo and link to home page© Copyright 2009 NCAT

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