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Small farms have to figure out how to maximize profit on the produce they grow, which isn’t as easy or straightforward as it sounds. In this article, we’ll detail the pros and cons of selling produce via a CSA vs farmers market vs local restaurants vs wholesale.
This article is the third installation in our Small Farm series where we discuss various aspects of starting and operating a small, regenerative farm. As with other articles in this series, this article is a collaboration with Chris Miller, owner/operator of Horseshoe Farm in Greenville, SC. (If you haven’t already done so, you can meet Chris in our first article.)
CSA vs farmers market vs restaurant vs wholesale
For small farms, growing produce can often be the easy part of the business. The hard part? Getting all your produce sold for a good profit before it becomes compost.
Most farmers enjoy growing food, but don’t always feel enthused about the sales and marketing side of the equation. However, a truly sustainable farm has to be profitable, so it’s essential that a small regenerative farmer place as much emphasis on selling their produce as they do on generating healthy soil and plants.
Chris Miller of Horseshoe Farm has valuable insights for other small farmers who are trying to figure out how and where to sell their produce: CSA vs farmers market vs wholesale vs restaurant?
Here are seven small farm sales tips from Chris, based on over a decade of experience working on or operating various farms around the United States:
1. Your market & location drive your sales approach.
There is no one-size-fits-all answer for every farmer out there trying to figure out the best place to sell their product. You’ve got to consider factors like your location, the uniqueness of your product, your specific market, your time & resources, etc.
When Chris worked on farms near Chicago and Grand Rapids, Michigan, restaurants were a huge sales outlet and they could often pay close to retail prices since the produce was unique and high quality. Another farm he worked at near Hot Springs, North Carolina, didn’t have upper-end restaurants close by, so sales were driven primarily by farmers market and CSA.
Bottom line: every farm has to figure out how it best fits into the unique local market, and those dynamics will likely change over time.
2. Don’t just be diverse in what you’re growing, be diverse in where you’re selling.
Even here in Traveller’s Rest, SC (just outside of Greenville, SC), there is a strong demand for CSA, wholesale, restaurant, and farmers market sales. What does Chris do? All of the above, depending on the season and what produce he has available.
The reality is there are pros and cons to each sales method and there’s no silver bullet. It should make you anxious to only have one source of sales…
What if the retail outlet or restaurant you’re selling to goes out of business or the chef leaves? What if it’s a bad day at the farmer’s market or you have a ton of produce you need to sell during times when the market is closed? What if a high percent of your CSA customers want to pause their CSA during the summer vacation months?
Crop diversity helps ensure you always have something to sell even if another crop fails. Sales diversity helps ensure you always have somewhere to sell it.
3. Be sales-minded.
Does your truck door magnet advertise your farm or CSA? Do you wear a shirt with your farm name and website on it? Do you have business cards (with sales pitch) with you? At the farmers market, are you also advertising your CSA and building relationships while selling one-off produce to shoppers?
You (and your team) are the best marketing tool available to you, so it’s important to be sales-minded when operating outside the farm. This doesn’t mean you should operate like a door-to-door vacuum salesman. Quite the opposite: focus on building relationships with other people and businesses in your community, and the “selling” part is just a natural part of a conversation.
In fact, Chris says his favorite thing about selling at farmer’s market is meeting new people and promoting his CSA. Somebody stopping by his stall to buy some fresh produce is the perfect person to chat with and let them know about the CSA and stick an informational flier in their bag. (More on that point below.)
4. CSAs aren’t dead, and you should strongly consider starting one.
If you look strictly at the numbers, CSAs are declining around the country. That decline is NOT because people no longer want local, organic food (demand is higher than ever), it’s because there are now more ways than ever to buy local, organic food.
For a farmer, the wonderful thing about a CSA is you get paid upfront before you grow the crops and you command retail prices. The three most challenging parts of operating a CSA:
- you’ve got to have a lot of crop diversity (and volume) to keep things interesting for your customers;
- you’ve got to figure out delivery or pickup options that are convenient and affordable;
- having a website or online portal that provides automated online/digital payment processing and subscription flexibility (ability to pause/cancel/renew or change other subscription options) is a big plus, but many farmers are not tech savvy.
Despite the challenges, it’s worth figuring out the details to start your own small farm CSA. At Horseshoe Farm, the CSA is the largest and most profitable sales outlet. Asked if he had to choose only one method to sell his crops, Chris doesn’t skip a beat: “I’d do it all through CSA,” he says.
Word of mouth is the primary driver of sales for Horseshoe Farm’s CSA. However, as Chris expands acreage, he’s planning to find new CSA customers via targeted facebook ads and even putting fliers out in target neighborhoods.
Side note: Chris has found that offering a few different CSA options — especially including shorter-duration CSA options like one month — make his CSA an easier sell. The same thing goes with offering delivery for a small fee.
Today’s customers want more flexibility, convenience, and (ideally) some customization options. Do your best to match those needs with your CSA offerings.
5. Follow the chef, not the restaurant.
The second biggest sales outlet for Horseshoe Farm is local restaurants. There are some wonderful aspects of selling produce to local restaurants:
- chefs like unique/unusual produce and know what to do with it;
- they can be great repeat customers for many years;
- they can pay a price that’s typically higher than wholesale but not quite retail, with minimal aggravation required (you just show up and drop off the produce at a set time);
The downside? Restaurants go out of business. Or the chef you were working with last week is gone and the new chef has no idea who you are or how much you were owed for your last delivery.
Like pretty much any farmer who has regularly sold to restaurants over the years, Chris has plenty of stories about getting burned. A couple of tips he offers for other farmers selling to restaurants:
- COD – Get cash or check on delivery, not “next week.”
- Follow the chef – Chefs have a tendency to change restaurants and when that happens, it pays to know about it up front and have the business relationship carry over to the new place. (Especially if the old restaurant soon goes out of business.) Heck, you might even be able to double your restaurant sales if you can work with both the old and the new restaurant!
6. Relationships are the best reason to sell at a farmers market.
More and more people are realizing the connection between their health and what they eat. They want local, organic food and love the idea of knowing their farmer(s).
How do you get loyal, repeat customers or find new people to join your CSA? One good way: get to know them at your farmers market. In fact, Chris considers those relationships to be the primary reason he sells at farmers markets, not just for a quick sale.
If you or someone on your team isn’t a “people person” or can’t get amped up for a day at the market, it might not be a worthwhile investment of time. Or, if Saturday is reserved for a much-needed day off/family time, that might be another reason not to sell at a farmers market.
Chris also chuckles about some of the negative experiences you’ll have to endure selling at a farmers market:
- empty markets on days when local university football games are on at the same time;
- scorching hot summer days when you and your once-fresh produce both look a little weather worn;
- the peculiar consumer psychology that makes people want to buy a lot of your produce when your pile of veggies is stacked head high, but avoid your stand like the plague once your pile has sold down to about 20% remaining (“there must be something wrong with that farm if that’s all the produce they have to sell!”).
However, over the course of a season, a farmers market can not only generate immediate sales, it can help you form relationships that can sustain your farm for years to come.
7. Wholesale may be the best backup plan you have available.
Let’s say you need to unload a lot of produce quickly… For various reasons, the farmers market, your restaurant contacts, or your CSA won’t cover the volume. What do you do? Make very expensive compost?
Nope. Chris has relationships with a number of local wholesalers who can take on a bunch of produce on short notice.
Wholesalers don’t pay nearly as much per pound as retail or restaurants, but they can be a lifesaver for small farmers in a pinch. So, reach out to your local wholesale markets and find out how to get into their network (and get their price sheets).
These small farm sales tips have helped Chris reduce produce loss to almost zero on his farm. As he says, “our problem is not enough volume to meet demand rather than having surplus supply.” And that’s exactly the position you want your small farm to be in!
Whether you’re a small farmer or simply someone who loves to support your local farms, we hope you find this information interesting and helpful!
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