Small-scale fresh produce growers tend to plant first and look for a market afterwards. This can be risky.
It is important to locate the target market and establish the degree of competition before you put the crop in so that your rewards can be fully reaped with your harvest.
Decide where you are to sell your produce, what the market wants from you and how this fits into your budget.
There are several different pathways your fresh produce might follow to the end consumer. It all depends on your choice of market.
If you have a more introvert personality and don’t like dealing with a lot of people this might be your preferred option.
Indirect sales institutions have strict requirements for producers, and may require Global G.A.P. certification, where you have to produce according to a strict set of regulations that applies to the pesticides you use, fertilizer, water quality and labour conditions.
There could be a delay in payments when using indirect methods.
With wholesale marketing you are selling all your crops to one place, like a store, restaurant, co-op or market. This is one of the fastest ways to sell your harvest, but it won’t bring in the same profits compared to more direct methods.
At terminal wholesale markets in urban areas your agricultural produce is traded to the buyers. These markets have the advantage of high concentration for supply and demand, with larger volumes traded.
It is important to note that wholesale buyers expect high quality, consistency, timely delivery, sorted crops and clean products. This market is more vulnerable to variability.
When you plant seasonal crops, it means you will compete with several other producers in the market, leading to lower prices.
Processing is quite costly and this means most of the processing of fresh produce is done by large companies, since processors need to keep their unit costs low to stay competitive. Expect to sell your produce at lower prices.
When you produce for a processing market, you usually have to deliver according to a contract that was set up before planting that specifies the type and amount of vegetables or fruit you produce and deliver.
It is a sure way to sell your produce, with a fixed income at the end of the season and it allows you to plan ahead for the next planting season.
SUPERMARKETS AND FOOD RETAILERS
Food retailers are normally interested in locally produced vegetables, as it promises the freshest product on their shelves, and shows community support.
These markets vary from farm stalls, independent, locally-owned grocery stores to large grocery chains.
Large chain stores have defined methods of buying in their products and have specific requirements. It might be challenging to persuade your local chain store to sell your produce, since purchasing usually requires approval from regional or central management.
The prices are also likely to be linked to regional prices rather than local prices. High quality is expected and produce might be rejected if it is not up to standard at delivery.
The advantage is that you can sell your produce in bulk, on a weekly basis. Depending on the crops you plant and the size of your farm, you have to spend extra time and money on cleaning and packaging as well as branding.
INSTITUTIONAL OR FOOD SERVICE BUYERS
These include schools, colleges, nursing homes, hospitals or prisons that have to produce food at low cost which translates into low prices for your produce. These institutions usually have requirements and food safety regulations that must be kept up.
It does provide you with a secure end point for your produce.
Most restaurants will pay a premium for quality local products, especially for speciality produce that are not readily available in local supermarkets.
A good personal relationship with the chef is important to ensure they turn to you for their fresh produce need. The chef must be regularly updated with your planting and harvesting schedule, since they run a tight schedule.
Quality is of key importance, as well as reliable, timely delivery.
Remember chefs are really busy, and try to contact them outside of mealtimes or when they are preparing for meals.
This is a direct method used to sell your product to customers and can be very time consuming for farmers. If you are a good planner and like to talk to people, this method can work for you. Remember, someone should permanently man the stand, like you, the farmer, a family member or someone hired at extra cost, to do the selling.
There is no middleman involved that eats away at your profits, but there could be a rental cost. This method is more profitable and you get paid directly, but takes up more time.
FARMERS’ MARKET OR COMMUNITY MARKET
Many people go to these markets to get the freshest vegetables available. Ensure the market is popular with locals and located in a busy place. The market must also be clean and well managed.
You will compete with other farmers and their displays, so be sure that your offer stands out with variety, quality and freshness as well as something extra like a sauce or product made from your vegetables.
A few things to remember:
- Display is very important; group all same coloured vegetables together. Bright colours like yellow or red will catch the eye of your customer.
- You can also make up some packages, recipes or staple vegetables in bargain packages.
- Add a sign with the name of your farm or name of your business, so people can recognise your stand or see the pricing for your products. Be creative.
Location is very important when selling your produce next to the road. Choose a busy area with lots of traffic, especially foot traffic, where there is also enough space for vehicles or people to pull off the road.
- You need a structure like a table or small building to sell your produce that might add to costs.
- The weather can have an influence on your business. Rainy or very hot weather can be bad for business.
- It can be helpful to put up a sign that indicates the produce available and prices that will attract customers.
- Collaboration with other farmers makes for more variety on the display stands.
- Remember certain towns have laws about food stands. Get to know the rules so that you can stay inside them.