Gardening for Profit

Selling what you sow: An experienced hand at gardening for profit offers his perspective on growing and marketing produce.
By Mort Mather
February/March 1999
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Tim and Jill Stark, owners of Eckerton Hill farms in Hamburg, PA, welling their colored and flavored peppers. They have been gardening for profit since 1995. The business cleared $25,000 last year. "We could have made our money just selling to restaurants," says Tim, "but getting a price worth our time was too tough. If you have a great product and you know it, you should be bold and charge what you think you're worth...and don't be afraid to start small."
PHOTO: MOLLY MILLER
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The demand for organic food keeps growing. That it exceeds the supply is certainly good news for anyone interested in organic farming or gardening for profit. It is interesting that people who ask me about starting a business of growing vegetables for market are most interested in marketing. I tell them marketing is the easiest part of the process. Planning, preparing the soil, planting, controlling weeds, and harvesting are the tricky parts. Grow it and they will buy.

That is an overstatement, of course, and someone who takes it literally could get themselves in a lot of trouble pretty fast. I'm reminded of the person who called me several years ago to ask where one could sell an acre of zucchini that was ready to harvest.

Where do you sell a perishable crop that doesn't have a good frozen or canned market? You can't take it to a processing plant. An unconscionable broker might he interested — one who didn't have contracts with other farmers for all that could be moved and didn't care about depressing the price for other farmers he or she dealt with. If you are gong to raise a perishable crop, you better have a pretty good idea who is going to buy it before you plant the seeds. You also ought to double-check the market as you get closer to harvest. Let your buyers know that the crop will he ready soon, which gives them the opportunity, if they are like the unscrupulous broker, to give you a little warning that things may have changed since you first talked.

Hard Lessons and First Steps

Establish your market before you buy the seed. You may find that there is no market for what you think you want to grow.

My neighbor, Bob, has been delivering manure and animal bedding to the side of my garden this past year (lucky me!). I wanted to repay him in kind. Well, not exactly in kind, but rather with the results of his gift to me. In discussion with him, however, I found that his family doesn't eat much of what I grow. They have a small garden of their own, which gives them the few vegetables they eat.

What if I decide to market through a farm stand, only to learn the hard way that none of the people who drive by my door are into vegetables or that they themselves all have vegetable gardens? A good marketing plan must begin with some market research.

Knowing what people want is not enough (Bob likes tomatoes). It is also necessary to know...

1. Where do they get their produce now?
2. Are they satisfied with what they are getting now?
3. Would they buy from you if that were an option?
4. Do you feel comfortable competing against the current supplier?

When you know what you are going to sell and to whom, the real challenge begins: planning. The right combination of seed supply, feet of row, and the right planting moment will hugely affect the bushels or pounds or ears or heads you think you can sell. This is an article on marketing, but planning is a big part of success in marketing perishable crops. If you are planning to sell as many tomatoes as possible to a processor, you may want to plant just one variety with a short harvest season. If you are supplying a restaurant or your own roadside stand, you will want to have tomatoes both early and continuously until the season ends.

The third major element in marketing, after what and to whom, is presentation.

Size, color, shape, cleanliness, and even (wonder of wonders) taste are part of presentation. Presentation will change a little with different marketing strategies, but the look and feel of the product and its packaging, display, and surroundings are extremely important. There is still the impression among some that organic produce doesn't have to look as good as produce grown using pesticides. If you are planning to sell your produce, you should banish that thought. There is no reason for organic produce to be inferior in any way to chemically grown. Wormy is not a seal proving pesticides were not used. Rather, it is an indication of poor agricultural practices.

Thinking Big: Starting Small

Before getting into further specifics, I should say that I like to start small. I would probably never be interested in having a big operation, so those of you who have visions of big tractors and tractor-trailer loads of produce being shipped to far-off places should probably stop reading here. I like my land and I like to be close to it. I like people and I greatly enjoy having someone tell me that my produce is wonderful.

I am going to give you some thoughts on seven different ways of marketing farm produce. At a farm stand or a pick-your-own operation, your customers come to you. Community supported agriculture (CSA) is both a marketing plan and a financing possibility and can involve people coming to your farm, you delivering to a central location, or you delivering to people's homes. Another direct-to-customer marketing possibility is selling to restaurants and/or food stores. Farmers' markets are similar to food stores, since in both instances you take your produce to a location where customers can find it easily.

Let the Customers Come Unto You

A farm stand on the road in front of your house is the simplest application of this principle. You can start really small with this approach by putting garden surplus on a table at the side of the road, a sign saying, "Cukes 10¢," and a can with a slot in the top. Since you are not expecting to make a killing with this approach, we might better call it market research. You will find out if anyone passing your house will stop to buy cucumbers. You can improve the research by printing a list of vegetables. Ask those who stop to check off the vegetables they would like to buy from you if you had a bigger farm stand.

Planning production with this very small start is easy, too. Most gardeners have some surplus at some part of the season. We can easily plan to have more surplus for this test market, just by planting a little more lettuce or peas or beans than we know we will need for ourselves.

Cucumbers will hold up fairly well in the open, but lettuce lying around on a table in the sun isn't going to sell well. Improve the presentation with an umbrella over the table for shade. A colorful umbrella will also attract attention and is more likely to bring in customers than the simple table. Once they stop, you want them to see crisp, clean lettuce — perhaps a couple of heads of leaf lettuce standing in water in a bread pan. If you are planning to build a business, you want people to be impressed by the quality they see.

In the beginning, price is not terribly important, but it should probably be close to the supermarket price or perhaps a little lower. You are asking people to stop, get out of their car, and do something new. In big-store terms, this approach is called a "low-price leader" to get people in the store. They assume once someone is in the store, he or she will purchase more items. In this case, you want people to break the barrier of resistance to change. If they stop once, they are much more likely to stop again. If they like the results of the stop, they are even more likely to stop again, and they may even start advertising for you. Many off-the-beaten-path farm stand businesses have been built from these small beginnings.

This approach can take many forms. I know of one very shy person who farms a couple of acres on a busy road and never talks to his customers. He has used the honor system for a couple of dozen years. The stand is a cart with a roof. I have never seen him near the cart, but it always has an array of fresh vegetables. Another farm stand that I knew (it had its start in a local garage) is now a major store selling wine, cheese, breads, fancy desserts — you name it. It even maintains a mailing list and sends out newsletters.

Pick-your-own is another home marketing approach. This is usually done with fruit like apples and berries, but peas and green beans are also reasonable crops for pick-your-own. It is appealing to people who want to get out in the country and do something interesting, often as a family outing. Lower prices are also appealing, especially for those wanting to preserve, can, or freeze large quantities. Even though harvesting is the greatest expense for these crops, don't lower your prices too much. Pick-your-own is attractive for reasons other than price. It appeals particularly to consumers who like the idea of spending time in a chemical-free environment. Planning takes on a new dimension in pick-your-own. Rows need to be farther apart, since you will have more people clumping around. You also need to plan for traffic to and from the harvest areas. Pick-your-own can involve planning for a very long season, opening with strawberries in the spring and closing with apples and pumpkins in the fall. It can go even farther with cut-your-own Christmas trees.

I can't think of any cost-effective market research for pick-your-own. Jim and Julie Morrison wanted to grow berries, so they went to work and planted an acre. They left plenty of room between the rows and planted it to grass that could be kept mowed and looking neat. The first year the berries produced, the Morrisons found themselves doing a lot of picking. Since berries are a perishable crop, the couple had to do something to preserve them. Easy. They made preserves. The business built over the years, and now families come out for a breakfast of blueberry pancakes before hitting the blueberry bushes to pick their own. They might buy some of the Morrison's preserves to take home, just in case they don't get around to making preserves from their berries.

Another farm in my area specializes in pick-your-own strawberries. It has taken several years to build the customers for seven acres of strawberries. The farmer didn't start with seven acres, though; instead, he planted more each year, estimating how many more pickers were likely, based on the past year's success.

Some will tell you that the three most important considerations in business success are location, location, location. If your farm is 20 miles from the nearest concentration of people and no one ever drives by your door, your location is likely to be a problem. But you don't have to he on a well-traveled road to have success in getting people to come to you. People will drive several miles out of their way to a farm stand they have come to like. They will tell their friends, too. They will drive even farther to a pick-your-own operation. How far? That depends on the area. We have driven ten miles to pick strawberries and farther to buy apples from an orchard that also has a great fall view. A farm stand four miles off the beaten path has become a year-round grocery store just by getting a loyal following. The food they truck in is frequently a return load, following on the heels of a delivery of their own produce to food brokers in the city.

Community supported agriculture (CSA) is a partnership between consumers and farmers formed before the growing season begins. Consumers pay the farmer in advance for shares of an expected crop. This gives the farmer money to bury seeds and cover other planting season expenses at a time when cash flow is at its lowest. The investors will be repaid in food as the crops come in.

This idea was initiated 30 years ago in Japan, where a group of women, concerned about the increase in food imports and the corresponding decrease in the farming population, initiated a direct growing and purchasing relationship between their group and local farms. The idea came to this country in the mid-1980s and has been growing steadily. The University of Massachusetts Cooperative Extension reported there were nearly 600 CSA's in the United States and Canada as of the summer of 1996.

This approach can't be beaten for starting small. If you have a garden that supplies most of your family's vegetable needs for the year and you want to expand, go to your closest neighbors without gardens and offer to plant and tend a garden for them. Tell theirs you will double the size of your garden, harvest some things for them, and let them know when it is time to harvest others; in exchange they'll agree to give you an amount of money now. You can determine the amount of money by figuring the time you spend gardening (not counting the time you spend dubbing around and enjoying it), cost of seeds, soil amendments, etc. Or you can keep track of the food you take from your garden and what it would cost if you bought it. Of course, this calculation would be done the year before you start your mini-CSA.

Market research with this approach is absolute. You know you have customers before you plant because they have paid you in advance. Planning should be easy, as well, if you have been doing a good job of supplying your family with lettuce from, say, May through October. If not — but you know why — having a responsibility to someone else may help you get those succession plantings going on time. The presentation is also easier with this approach, because your customers are somewhat involved from the beginning. They are likely to be more tolerant of soil that splashed up on the spinach since they are aware of the rain that caused it and can make that direct association. Still, you should wash the spinach before giving it to your neighbor. There's no excuse for negligence.

A CSA can be built by direct solicitation of neighbors, of people in an organization like a food co-op, church, business, or by direct solicitation in a neighborhood removed from your farm. Members can also be found by advertising.

There are several special reasons for someone to join a CSA that go beyond other marketing approaches: 1) Support for local farmers keeps money in the local economy, helps preserve farmland and open space, contributes to the maintenance and establishment of regional food production, encourages communication and cooperation among farmers, and helps farmers concentrate on doing the best job they can rather than on looking for buyers. 2) One fourth of the members of one CSA reported that they were eating better because they were eating more fresh vegetables. The vegetables were already paid for and in their house, so they used them. They also learned about new vegetables they would probably never have tried otherwise. 3) CSAs frequently encourage their members to visit the farm and some offer volunteer opportunities. This is an excellent way for children to learn something about where their food really comes from. Many CSAs publish newsletters with information on how to prepare, eat, and store their products. Some have potluck suppers for their members.

The following is the contract one CSA asks members to sign: "I/We appreciate locally grown, organic produce and want to ensure that it remains available in Central Illinois by becoming a shareholder/shareholders in Prairieland Community Supported Agriculture. I/We understand that the farmers, Jon Cherniss and Bob Brackett, will do their best to provide the organic fruit and vegetable varieties they propose at the times they estimate. However, as a sharer/sharers in both the bounty and the risk, I/we understand that nature ultimately decides what I/we will receive and when I/we will receive it."

Prairieland CSA sets out its fee structure as follows: "The price of a large share for the 1998 season is $366; small shares are $217. These fees also include organizational costs for the produce distribution, newsletter, and other PCSA educational programs. This works out to an average of $14 and $8 of produce per week, respectively. The volume of your produce will resemble a bell curve, peaking in about mid-August."

A CSA in Pennsylvania charges $285 for a small share and $485 for a large share. Members can pick up at three locations: the farm and distribution spots in two cities. The value of snares among CSAs will vary widely, as each may offer a different mix of vegetables, fruits, and sometimes other farm items like eggs or dairy products.

Home Delivery

CSA is not just a method of financing; it's also a method (or, rather, methods) of marketing. The customers can come to you, or you can deliver the produce to them. In most instances where CSAs deliver the food, they bring it to a location that is handy to the membership they have developed. I've heard of a CSA that provided home delivery on a bicycle. I don't know the details, but my impression was that the farmer drove his truck to a neighborhood, unloaded a delivery bicycle; loaded the bicycle with produce, and made deliveries. In this age when so much is being sold through catalogues, the Internet, and television shopping channels, can it be long before we do our grocery shopping in these ways?

I remember visiting my grandparents in Philadelphia in the '50s and seeing a variety of vendors come down the street hawking their products. One was a vegetable man in a horse-drawn wagon. It had a roof to shade the vegetables, but the sides and back were open to allow people to see the wares and to "air condition" the wagon. I especially remember the scale dangling and rattling at the back. Houses were quieter back then. There were televisions, radios, and phonographs, but they were usually silent during the day. There were no humming air conditioners. Windows were open in the summer and sounds like the bell on an approaching vendor's horse or his call — "Fresh fruit, vegetables! Fresh fruit, vegetables!" — could actually be heard by potential customers.

Home delivery today would have to be prearranged. A neighborhood could be canvassed in the winter (a market survey). If I wanted to do this, I would probably start by tucking a letter about my intentions under people's doors during the day explaining that I would be back two evenings later. I would· ask them if they were interested in having fresh vegetables delivered to their door. One consideration in the '90s is that many families have no one at home during the day. A solution would be to establish a place in the shade to leave the produce safely. Another possibility would be to deliver in the evening.

Urban Restaurants

Good restaurants were my favorite market. They are the same as home delivery, except the volume is much better. Whereas a family may use two pounds of carrots a week, a restaurant can use 50 to 100. A family may go through two heads of lettuce while a restaurant is chopping up three or four cases.

Restaurants may be more interested in the price you are charging than a family would be. When you figure in a volume discount, which is reasonable because there is less time and effort involved, and then figure in a delivery charge (both of which are hidden in the price), you can sell to restaurants at a price close to the retail supermarket price. I told my chefs that I would match the price of the wholesaler who sold to them year-round. That was frequently higher than they could have paid in a supermarket, but the convenience of having it delivered to their walk-ins was worth the higher price to them. Nobody every complained about my price, since I wasn't setting it.

Market research is easy. Catch the chefs in the winter when prices are high and quality low: After lunch is the best time, when things are quietest in the kitchen. Ask what they use and in what quantities. A little conversation about fresh produce at this time of year will get good chefs salivating. Ask if there are any special things that are hard to get, like fresh dill, basil, mint, or other herbs that you could plant for them.

Ask who is supplying most of their vegetables In the summer. If it is another local farmer, do unto him or her what you would have another do unto you. Go talk to him or her to see if there is a place for you with that restaurant, without going head-to-head with a colleague. I can't predict the outcome of the conversation, but I'm sure it will be positive. Even if you both decide to compete, at least you will both know what is going on and will be able to plan for it. That is much better than suddenly finding, in the middle of the season, that an important part of your marketing strategy has disappeared.

You'll need to start rounding-up crates. That is part of the presentation to a volume buyer. I was always fortunate enough to find friendly kitchen staff willing to set aside used crates for me. They stayed friendly as long as I was friendly back and didn't let the saved crates pile up in their storage area. The rest of the presentation is the same as for all customers. The lettuce must be clean and not harbor any slugs. The broccoli should be free of green worms. The zucchini should be fairly uniform in size. No oversized cucumbers. The tomatoes should be ripe but not soft.

Farmers' Markets

Farmers' markets have roots in ancient times and were common in colonial America. However, there were very few operating 25 years ago. There were none in Maine back then. Now, there are 49 scattered around the state, and a large year-round complex opened last year in Portland. California has gone from practically none to 350 in the same period, and in 1997, the governor of New Jersey declared September Farmers' Market Month.

If you want to add to the growing numbers of new farmers' markets, find a good location and ask the owner for permission to establish one. You may think that a supermarket parking lot is not a good place, but you may be wrong. Most businesses, even ones that sell produce, will welcome farmers' markets because they attract people to the area. When I was farming, several businesses called me to offer locations for a farmers' market. I wasn't interested, because I had already found my niche.

A farmers' market is like a farm stand that you operate out of the back of your truck. There are two major differences. You are attracting pedestrians instead of highway traffic. Even if the market is located on a busy road rather than in a city setting, the cluster of vendors and whatever collective signage has been established should stop potential customers. The second difference is that you have direct competition. The other vendors are actually more of an asset than a liability. Collectively, you all provide a wider selection of items to buy. Competition is best met with all of the things I have mentioned — high quality, a fresh product that looks good, clean, and neat (though funky is OK). While you can get away with some imperfections in a CSA, on your farm stand or at a market, imperfect items will be picked over and left behind.

Market research, if you are planning to enter an existing farmers' market, can be done by attending the market as frequently as possible the year before you take the plunge. Talk to the other growers. What sells well? What is missing at the market? Would people buy it if it were there? Do they consistently run out of something? Check it out at different times of the day and throughout the season. Then you can see where the market opportunities lie. What is in short supply? Do you have something earlier or later than anyone in the market has it?

You don't need to worry about warning your competition that you are planning to compete with them. They will probably welcome you, because they know that more is generally better. The more vendors there are, the more interesting the market is, and the more people it will attract.

Food Stores

All of the market outlets described so far provide excellent opportunities for you to interact with your customers. Even though you don't get to talk with the patrons of the restaurants you serve, the chefs and cooks will appreciate the quality of your produce and give positive feedback, which I found as rewarding as the checks they wrote. Selling wholesale to stores is much less personal. The produce manager may comment on how good your produce looks, but probably not. They are middlepersons. They buy stuff, move it around, display it, sell it. It's an informational vacuum.

Selling to restaurants is a kind of wholesale, but the restaurants don't resell your produce until they have added some value. Their profit comes from the value added and, while they want to keep costs down, they don't make a direct and immediate connection between the cost of a head of lettuce and the price they charge for a salad.

Stores do. They have to make money on the difference between the amount they pay you and the amount they charge consumers. They have to pay for the space and for the labor. Even though produce is usually one of the smallest markups in the store, it is still significant. Don't blame the store for the markup. It is essential if they are going to stay in business and thus provide you an outlet for your produce. Your price has to be low enough so that the price of the item with the store's markup is competitive.

Why sell to a store rather than through a farmers' market? To answer this question, you should figure out how much the farmers' market costs you. What is the difference between the price you got retailing it yourself and what you would have gotten selling it through a store? Divide that amount by the hours you spent at the farmers' market. That is your hourly wage for the day. After making this calculation you may wonder why anyone would go the farmers' market route. Maybe there is no store available. Most likely, they enjoy the time they spend in the company of their peers and talking with customers.

There is a whole lot about farming that makes no sense to people trained to believe that money is somehow a measure of success. Life is measured in increments of time, not units of tender. Success, I believe, is a measure of how enjoyably our time is spent.


Farm Stand Signs

If you think you need more signs, you probably have too many. Signs can be important, but the general appearance of the stand will do more for you than any amount or quality of sign. Consider a kid sitting at a table along the side of the road with a pitcher on the table may be a sign that says-Lemonade" tacked to the front of the Table and it may give the price, but cars approaching can't even see the sign because it is parallel to the road. It doesn't matter, because the picture speaks for itself, People may stop because they are thirsty or because they think kids selling lemonade are cute, They won't stop because the price is right or because the sign attracted them.

A farm stand can do much the same thing. It can be funky. It can even have a certain dishabille surrounding it, as long as the chaos is due to recent activity and not neglect. The look of the place will do more to bring in customers than any sign. A single "Farm Stand" or "Smith Family Farm" or "Fresh Vegetables" are possible permanent signs for the stand. Make sure your sign or signs are visible, not by someone standing in front of the stand, but by people driving by in car.

Unlike the lemonade stand you do need to let people know a little more about what you are selling. A blackboard or some other sign that can be changed easily and that conveys the message that it presents "Today's News" works well. Another possibility is a sign from which other signs hang, providing a listing of what is available. The value of this sign is that it gives the impression that there is a lot of produce available. Remember, it is not so much what the sign says as the impression it makes. Some examples:

"Cucumbers 6/$1" says, "Good deals here."
"CORN!!!" says, "This is what you have been waiting for."
"OUR OWN!" says, "You won't get any better anywhere else."
A list of items says, "You'll find what you are looking for here."


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