Puzzle pieces laying over a city building.
Updated: March 17, 2021
By Ginger S. Myers , and Kim Rush Lynch

Marketing challenges and opportunities

There are many marketing opportunities for urban farmers. When agriculture can take place literally in the customer’s backyards, this high visibility in a populated area can attract a wide variety of customers. Urban producers still face the challenge of competing with farmers from peri-urban areas that have more land, can produce greater volumes of product, and have lower cost of production.

Both urban and rural producers have the same set of problems:

  1. Balancing the price that customers are willing and able to pay with the costs of paying yourself and your employees a fair wage.
  2. Understanding and complying with regulations for both production and sales.
  3. Dealing with unpredictable weather conditions

Because of these challenges, pursuing the correct marketing channels can be just as important to the success of any farm enterprise as its production practices. Producers will need to understand and promote all the attributes of their products and develop a targeted market strategy. Implementing this strategy will require market research, detailed planning, and a plausible implementation schedule.

Urban advantages:

Figure 1: What makes your tomatoes different from all the other tomatoes your customers could buy? Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library.
Figure 1: What makes your tomatoes different from all the other tomatoes your customers could buy? Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library.
 

A good marketing plan begins with a firm grasp on the benefits and attributes of your product. For example; you’re not just selling tomatoes. You’re selling local, vine ripened tomatoes (features) that are days fresher and more nutritionally dense (benefits) than tomatoes from the grocery store. For customers such as chefs, food truck vendors, or specialty food producers, urban grown products are miles fresher, support the B2B (Business to Business) community model and can help them differentiate their food items from their competition.

Food that is grown and consumed in the city contributes to the food security of urban populations. In times of abundance, this is often minimized. But in times of natural or man-made disasters, it can help fill the supply void. While urban production may seem small, urban farmers can maximize their production potential per square foot more so than their rural neighbors. Small plots can be micro-managed for fertilization and water applications to maximize yields.

Moving from producer to marketer—do what you enjoy

Figure 2: It takes a team to make any business successful. No one person has all the skills needed! Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library
Figure 2: It takes a team to make any business successful. No one person has all the skills needed! Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library
 

While your marketing efforts are still in the growing stages, develop a marketing perspective that helps you find a comfort zone. Some farmers really like the challenges and social aspects of direct marketing. They enjoy talking with customers and other producers on a regular basis. Other farmers are perfectly happy staying on the farm and are uncomfortable with the idea of “selling.”

If that’s the case, then perhaps a spouse or other business partner would be better suited to handling your direct marketing venues. It pays to know yourself and be honest about which jobs you like best and which jobs you dread.

Marketing basics:

The time-honored marketing tenets of who, what, when, and where to market any products still apply to marketing the products of urban growers. These tenets are often referred to as the 4Ps of marketing - product, price, place and promotion.

1. THE PRODUCT: Exactly what are you going to sell? Define it in terms of what it does for your customer. How does it help your customer to achieve, avoid or preserve something? You must be clear about the benefits it offers and how the customer’s life or work will be improved if he or she buys your produce.

2. THE PRICE: Exactly how much are you going to charge for your product, and on what basis? How are you going to price it to sell at retail? How are you going to price it at wholesale? How are you going to charge for volume discounts? Is your price correct based on your costs and the prices of your competitors?

3. THE PLACE: Where are you going to sell this product at this price? Are you going to sell directly from your own farm or through wholesalers?

4. THE PROMOTION: How are you going to promote, advertise, and sell this product –at this price, at this location? What will be the process from the first contact with a prospect through to the completed sale?

1. Define your product

Who will purchase your product and why? Determine who your customers are before you put in that seed order. What are their purchasing traits? What would make a shopper select your produce over that of the grocery store’s or even another local grower? How does your product satisfy their wants or needs and translate into a sale?

What are you selling?

Producers see their products as the final result of their work. But, we are really seeking a different end product - a satisfied customer. Maximizing your sales potential requires producing the highest quality product. Your sales message is that “produce is not just produce.” Your produce is “special” because of your production system, variety selection, and environmental stewardship.

Quality is a field to plate issue. Customers will purchase your products based on a set of expectations. They expect to pay a fair price, though probably higher than for conventionally grown produce, for a product that is always safe and of a certain quality and consistency with every purchase.

Once you can grow a consistently high quality crop, you can start to market your product. But what is your product? What are its benefits and features? Who is your target customer and why should they buy from you? So, what are you selling?

Differentiating what you sell:

Figure 3: Consider what features motivate your customers to purchase your product. If you have a pollinator garden next to your vegetable patch, take photos and share them on social media as part of your marketing campaign. Photo by Edwin Remsberg, ©University of Maryland—AGNR Image Library.
Figure 3: Consider what features motivate your customers to purchase your product. If you have a pollinator garden next to your vegetable patch, take photos and share them on social media as part of your marketing campaign. Photo by Edwin Remsberg, ©University of Maryland—AGNR Image Library.
 

The first step is to analyze your product from your customers’ point of view. Remember, Gillette doesn’t sell blades, it sells smooth shaves. 3M doesn’t sell tape, it sells convenience and time. Begin by analyzing your product along four lines: What are its...

  • Concrete Features—These are the tangible things about a product that a buyer can see, hear, and feel. A car’s leather interior, front-wheel drive, and racy style are good examples of concrete attributes, as is a good price or loan terms.
    Does your product have a good fresh color, attractive packaging, and an informative label? Can you provide shipping and cooling of products if necessary that are in compliance with wholesale or cooperative markets?
     
  • Abstract Features—These are the intangible things about a product that you can’t see, hear or feel, but which exist nevertheless. You can’t see “good quality.” It is a conclusion derived from an overall evaluation of the product’s features by you and others. But that image is a powerful selling tool. Abstract features of ice cream include “rich taste” and “fattening.”

    Is your product locally grown under certified organic practices? Does your farm and family contribute to sustaining your local community? What are your products’ other abstract features?
     
  • Functional Features—These are benefits created directly by the product. A car “handles well.” A toothpaste “whitens teeth.” A lending company gives “two-hour approvals.” In each case, the benefit comes directly from the product to the buyer.

    Is your product GMO free, untreated, or an heirloom variety? How does the nutrition levels in your product compare to similar products? How does it taste?
     
  • Psychosocial Features—These are psychological benefits that come to the buyer indirectly. A car which produces admiring looks from others, a cookie mix which makes a boy tell his mother, “These are sooo good.” These features are important because we want others to approve of us and what we have. It was psychosocial pressures more than anything else that drove many women away from natural fur products.

    Do your farming practices help save the Chesapeake Bay and preserve soil and natural resources for future generations? What are your products’ other psychosocial features?

Note: Do NOT make medical claims about your product.

Crops with the most potential:

One of the most common questions aspiring growers ask is, “What crops should I grow?" Unfortunately, the answer is not clear cut.

When choosing what to grow, it is important to balance what you can produce well, what your customers want, and what customers are willing to purchase at a price that will cover your costs. For urban growers with a food access mission, it may be necessary to raise some crops that can be sold for high prices to customers who can afford them (herbs, microgreens, etc.) in order to subsidize the costs of raising other more calorically dense crops destined for the community you are trying to serve. Alternatively, if job creation is a primary goal, you may need to focus more on high-value crops to pay good wages.

In an urban setting, space is a limiting factor, whether you are growing outdoors on a side lot or indoors hydroponically. So urban growers can benefit from choosing to raise crops and livestock that are physically small, thrive in small spaces and challenging growing conditions, and have fast life cycles. The last point is important to maximize the amount of income or food produced per square foot.

For those growing using organic methods, most organic buyers in this region have indicated that if a conventional produce item does well then its organic counterpart has potential to sell as well. Also, crops which typically have few insect and disease problems are perhaps the easiest crops to produce organically.

Really knowing and understanding your product is the first step in determining your marketing strategies. Your ability to describe what products you sell, what they do, what makes them unique or special, who will buy them, and how much you will sell them for starts the marketing process. Focusing greater attention on matching your product’s traits with customers’ needs will result in greater marketing success.

Customers and the competition:

Do you know what your competition is up to? If not, you could be headed for trouble because ignorance isn’t bliss when it comes to your competition. There is always competition. Even if you’re the only urban grower in town, you face competition from the sale of other kinds of produce where your customers will spend their money instead of with you.

The first step to understanding your competition is to know who they are. This sounds easy enough, but it’s more complicated than just listing your obvious competitors. There are really three types of competitors to study.

  1. Competitors that sell similar products or who use marketing strategies similar to yours, such as low inputs producers or labels like pesticide-free.
     
  2. Competitors that compete for the same customers’ dollars – your target audience.
     
  3. Future competitors. Your competition could be a new business offering a substitute or similar product that makes yours less desirable. Don’t just research what’s out there already. You need to constantly be on the lookout for new competition.

2. Price

Whether you’re gearing up to sell at a farmers’ market, through your roadside stand, or by private contract, you cannot thrive in business today without a pricing strategy. The price you set for your product must fall between two points: what the customer is willing to pay and your breakeven point (the point at which you start losing money).

Remember this golden rule when setting prices: perception is everything. How customers view your product or service and what they are willing to pay for it is based upon perceptions. In the end, customers will tell you loud and clear through their purchasing behavior whether or not your prices are too high, too low, or right on the money.

Where to begin:

Setting your price requires knowing who your customers are and what they are willing to spend on products like yours. It is vital to know your cost of production per item type since pricing below that will mean marketing at a loss. It also requires knowing your competition. You already have a vital piece of the puzzle for determining price from your earlier market research.

Customer demand. How many units of your product can you plan to sell over the production season? The demand for your product is driven by consumers tastes, consumer income, and the availability of other products like yours at different prices. What are your competitors charging for products or services similar to yours? Assess how your offerings measure up in terms of quality. Customers almost always do quality comparisons before they buy. If you only determine your competitor’s price and then charge a little less, it’s no guarantee of success. Being the lowest priced product on the market could create just the opposite effect, because for most customers, buying a product isn’t just about price, but rather about value. These are competition-oriented approaches to pricing that you’ll recognize:

  • Customary pricing. This is when the product “traditionally” sells for a certain price. For example, packs of candy or chewing gum usually cost a predictable amount.
     
  • Loss-leader pricing. This approach works on the premise of losing money on certain very low priced advertised products to get customers in the door who will buy other products at the same time. Grocery stores use the loss-leader approach, stacking sale items on the end of aisles so customers must pass shelves of other products before getting to them.

    Loss-leader pricing might also be used to sell off or stimulate interest in products considered to be in maturity or in a declining stage of their life cycle. For example, discounting prices in the final hour of a farmers’ market can reduce losses from produce not sold that would not last until the next market.

Once you have determined your price you may want to consider some special adjustments such as quantity, seasonal or cash discounts. Be cautious when using discounts or sales to attract customers. If you use them too often, customers will come to expect these lower prices all the time.

Resources for pricing:

Several sites on-line provide excellent resources for checking weekly produce prices based on regional markets. A link to these resources will be at the end of this chapter.

3. Place

Growers in Maryland have several marketing alternatives. Each alternative has characteristics that make it more advantageous for different types of producers. Important factors to consider when choosing a market or combination of markets include:

  1.  the volume of produce grown;
  2. location of the grower;
  3. the time available for marketing activities;
  4. and product quality. Producers may be better able to use or develop more alternatives if they know the major characteristics of each marketing alternative.

Marketing alternatives for product may be classified as direct or non-direct markets. Direct markets involve producer interaction with consumers on a one-on-one basis, and include pick-your-own operations, roadside stands, and farmers' markets. Non-direct markets involve producer interaction with market intermediaries. The non-direct markets include processors, grower cooperatives, and retail outlets.

The discussion which follows explains the basic concepts of marketing, regardless of the market outlet, followed by an exploration of the characteristics, advantages and disadvantages of the principal non-direct or direct market outlet.

Direct marketing alternatives:

Using a direct marketing outlet allows growers to capture the retail dollar that consumers pay at other markets. To receive prices similar to those at retail outlets, growers must provide the same services as other retailers. Consumers, on the other hand, purchase from direct markets to buy high quality fresh fruit directly from producers at competitive prices. Locally grown foods and products are now unique and "special" to consumers simply because, by buying direct (e.g., local), consumers feel they can short circuit the industrial production and distribution systems, a source of food safety concerns and debatable production practices. The popularity of “local” is based on authenticity – real products, from real farmers.

Farmers' markets

Farmers' markets are an increasingly popular form of direct marketing. Farmers' markets differ from other direct marketing operations in that growers share insurance, advertising, and other marketing costs. Successful farmers' markets are very helpful in increasing the incomes of the vendors who participate in them.

Figure 4: Roadside stands can be convenient for both producers and customers. But be sure to check local zoning and permitting rules. Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library
Figure 4: Roadside stands can be convenient for both producers and customers. But be sure to check local zoning and permitting rules. Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library

Maryland now has farmers’ markets operating in every county and the City of Baltimore.

Producers who utilize farmers' markets usually fit into two categories: commercial (full-time) growers or part-time farmers. Full-time growers use the market as an alternative market or, in the case of the part-time 

farmer, as a viable market outlet. In order to participate in a farmers' market, producers need transportation to the market site, selling tables, a cash box or register with change, price display signs, signs for any applicable certifications such as organic, various containers, certified scales or other measurement devices, and sales people.

Producers should carefully plan production of crops that are to be sold at a farmers' market. They should try to grow a wide variety of crops for availability as early in the season as possible.

Major advantages to producers who sell at farmers' markets include:

  • Producers have limited liability for customers since they are not on the farmer's premises.
     
  • Parking space, restrooms and other facilities are not the farmers responsibilities. These facilities are provided by the market.
     
  • Attracting customers is a function of the market and farmers do not have to worry about advertising individually.
     
  • Many markets accept federal food assistance benefits and have matching programs that allow low-income customers to purchase more with their benefits.

Some of the disadvantages include:

  • Time required to transport and sell at the market takes
     
  • away from the farm operation.
     
  • Market hours are controlled by the policies set for the farmers' market which may not be ideal for individual producer. Also, advertising, or lack of it, is controlled by the market.
     
  • Markets that are poorly located may not attract consumers and peddlers may operate to depress price.

Community Supported Agriculture (CSA)

Community Supported Agriculture (CSA) is a term that has come to describe a variety of direct marketing model with certain common characteristics, including:

  • Emphasis on community and/or local produce
     
  • One share is generally enough to feed a household of four or more.
     
  • Shares are paid in advance by subscribers, providing farm capital for spring start-up costs.
     
  • CSAs helps build agriculturally supported communities.
     
  • Weekly deliveries or pick-up to members/subscribers.
Figure 5 The variety of produce supplied in a weekly CSA share is one of the big draws for customers, and one of the big challenges for producers! Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library
Figure 5 The variety of produce supplied in a weekly CSA share is one of the big draws for customers, and one of the big challenges for producers! Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library

CSA is a partnership between consumers and farmers in which consumers pay for farm products in advance and farmers commit to supplying sufficient quantity, quality, and variety of products. This type of arrangement can be initiated by the farmer (farmer directed) or by a group of consumers (participatory). CSA is sometimes known as "subscription farming," and the two terms have been used on occasion to convey the same basic principles. Subscription farming (or marketing) arrangements tend to emphasize the economic benefits, for the farmer as well as consumer, of a guaranteed, direct market for farm products, rather than the concept of community-building.

Most CSAs offer a diversity of vegetables, fruits, and herbs in season. Some provide a full array of farm produce, including shares in eggs, meat, milk, baked goods, and even firewood. Some farms offer a single commodity, or team up with others so that members receive goods on a more nearly year-round basis. A typical CSA will grow over 30 varieties of crops and harvest at least 7-12 crops per week!

Good communication is a hallmark of many successful CSAs. Many include recipe ideas with their weekly deliveries, especially early or late in the season when cool-season crops (beets, turnips, kale) are harvested. These crops may be unfamiliar to many consumers, who may be waiting for more familiar later-season crops. It is common for CSA farms to issue a newsletter in each share. The newsletter can provide facts about the farm, as well as update members on how the season is progressing and how the various crops are shaping up for harvest.

General advantages CSA operations for producers include:

  • Guaranteed market
  • Advanced payment provides working capital
  • Allows better off-season planning
  • By tailoring production to the market, greatly reduces crop waste
  • Containers are re-used until they wear out.

Potential disadvantages to the producer are:

  • Must educate consumers to eat seasonally
  • Added labor of packaging and delivery
  • Weather challenges

What to grow/varieties − you like “big” sizes but

  • customers want “small’
  • Must be a “people” person

Selling on-line, a 24/7 opportunity

The USDA’s first survey of Local Food Marketing Practices, conducted in 2015, found 167,009 U.S. farms sold $8.7 billion in edible food directly to consumers, retailers, institutions, and local distributors. Consumers accounted for 35 percent of these direct food sales, and retailers, 27 percent. Direct farm sales include both fresh foods and processed or value added products such as bottled milk, cheese, meat, jam, cider, wine, etc.

Although 73 percent of all farms in the survey reported internet access, only 8 percent sold product via on-line market places. Not too long ago, access to reliable internet service proved to be a barrier to on-line sales for farms in different parts of the country but, since three-quarter of the farms responding to the survey had access, that problem can’t be the deterrent any longer. The popularity of sites like Amazon, countless retail sites, and the annual “Black Friday and Cyber Monday” shopping seasons, attest to the potential customer base that exist for on-line sales. So why aren’t more direct marketing farms selling their products through on-line sales channels and engaging in e-commerce?

Electronic commerce (e-commerce) is a transaction for goods or services enacted on-line. It could be the sales of products, reservations, or providing a service all simply paid for on-line. E-commerce can be an attractive and very cost effective way to allow customers to shop anytime, anywhere, and on multiple devices. It can also allow you the flexibility to fulfill orders on your own time schedule. But like any other marketing channel, you need to consider both the positive and negative impacts launching on-line sales can bring to your business.

You should consider:

  • What on-line tools will I use (e-commerce, website, social media, e-payment gateway, etc.)?
  • Do I want to offer shipping and if so, what are the charges and carriers for that service?
  • How will I promote my on-line sales?
  • How will I accept on-line order and payments?
  • What procedures will I need to implement to get orders processed quickly and efficiently?
  • What’s my costs/benefits equation?

A major component of e-commerce, and the one producers often reference that challenges them the most, is the need for customers to be able to make a payment on-line. Electronic methods of taking payments are called “gateways.” The most common gateway is credit card processing. Third party merchant accounts are very secure but can be cost prohibitive for small businesses. Alternatives to a merchant account are Person-to-Person (P2P) payment services. These keep track of funds available to both the buyer and the seller. The buyer and seller (or service provider) both need to have an account with the P2P service. The most popular P2P service is PayPal, but others are now gaining market acceptance. On-line payment options are a must when considering developing your on-line store.

“With 90 percent of all online purchases made with credit cards, you literally cannot afford not to add this payment option to your site. If you've been hesitating to accept credit card payments online, the good news is that, as soon as you give your customers this option, you should see a noticeable jump in sales.”

Corey Rudl, Payment Options for On-line Shoppers, Entrepreneur

Setting up and operating an on-line store for your products or services is a big job, but it can have big returns for your business. Internet sales are only growing, not contracting. If you think e-commerce is the next step for your business, here are some basic pieces of infrastructure you’ll need to develop. Don’t think you have to go it alone. Hire the technical assistance you need.

  • WEBSITE
    A website is the cornerstone for a farm’s online presence. Not having a website is like not have a phone number.
     
  • SHOPPING CART SOFTWARE
    When offering multiple items on-line, a shopping cart helps. Check with your web hosting company or e-commerce platform provider to see what they offer.
     
  • PAYMENT PROCESSING
    Figure out how you’re going to take payment on-line.
     
  • EMAIL SUPPORT
    You’ll need to have an email address where customers can contact you if something goes wrong, they want to change their order, or arrange for pickup.

Setting up an e-commerce store doesn’t need to be overwhelming as long as you’ve done your research and made informed decisions. Additional resources and publications supporting direct marketing opportunities are available on the University of Maryland Extension Agriculture Marketing website: https://extension.umd.edu/programs/agriculture/programs/farm-and-agribusiness-management/ag-marketing

Best practices when working with chefs

If possible, dine at the restaurant you want to sell to so you can experience their menu and their facilities.

It would be a good idea to market to chefs before planting but this doesn’t work unless you have photos or samples from storage. Your first contact with a chef may be just to gauge if they are interested in purchasing directly from a farmer.

Don’t just show up at their kitchen door with your products. Call ahead and make an appointment. If you don’t know who to ask for, request the Executive Chef. Don’t call between 10:30 AM and 1:30 PM, this is their busy time of the day. The best time to call is between 2:00 PM- 4:00 PM.

Show up on time for your appointment. Bring two samples of each item you would like them to consider. Bring your best products and do not charge for them.

Have your logistics in order. How will you bunch, pack, or case a product? Know your product- organic, sustainable, hormone and antibiotic free, how was it grown? Be able to tell your story. Bring your business card and contact information along to leave with them.

Have your invoicing and payment terms in writing and agree on a payment schedule or C.O.D. Discuss the need for a delivery charge on less-than-minimum orders, and the need for on-time payment. Ask what the restaurant's normal billing schedule is. Two weeks, 30, 45 or 90 days is common; can you live with that? Be sure your pricing still leaves room for the chef to make a profit.

Don’t make promises you can’t keep. Don’t make promises you can deliver on Saturdays when you can’t every Saturday. Or promise you’ll have asparagus until middle to late summer. Be honest, be clear. The chef knows if he’s worked with farmers, whether it’s produce or livestock, that prices fluctuate. Be honest and communicate. Communicate and be clear on what you’re able to do and how you’re able to do it.

Weekly or biweekly check-ins. Let them know about supplies as weather dictates. Whether it’s voice, text or email. It’s probably best to send a product list through text or email and not voice because a chef has something to go off of when it’s written down. Talking to farmers is great, but when it comes to product lists, it needs to be in a written format.

Since restaurants have limited cooler space, they require frequent deliveries and accept only limited volume per delivery. This means more invoices and paperwork.

Chefs need lead time. If they are aware of what you have and plan on it, they can get it on the menu and really showcase the items. If you show up with something new unannounced, it can be difficult.

Chefs want information about how to store and handle the products, shelf life, and ways in which the product can be used.

If you can’t make a delivery, the delivery will be short of the agreed upon amount, or product isn’t up to par, let the chef know right away so they have time to make menu changes.

Stay nimble with your products and in conversation with your chefs. What is a “hot” item this year may be different than a newer request for the next season. Be ready to source new varieties of seeds or meat cuts to keep up with chefs’ menu changes.

 

 

 

Non-direct marketing alternatives:

Processors

Other non-direct marketing options for producers are fruit and vegetable processing plants. These plants have the capacity to process large quantities of produce. However, most processors will expect to purchase produce at wholesale prices, which may only be economically viable for the largest-scale urban growers.

Figure 6: Products like jams and pickles can be a good way to add value to produce that would otherwise sell at a low price or go to waste. However, food safety and labeling regulations are much more rigorous for value-added products than for fresh produce. Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library.
Figure 6: Products like jams and pickles can be a good way to add value to produce that would otherwise sell at a low price or go to waste. However, food safety and labeling regulations are much more rigorous for value-added products than for fresh produce. Photo by Edwin Remsberg, © University of Maryland—AGNR Image Library.
 

Additionally, at this time, there are a very limited number of processors specializing in organic products.

Producers usually contract to provide processing plants with a certain amount and quality of fruits and vegetables over a certain period of time. However, processors do not contract for all of their produce. Generally, they contract for about 60 percent, purchase 30 percent on the open market, and produce 10 percent of the total quantity needed. This allows processors the freedom to "play" the market and possibly receive the supplies at lower prices.

Good managerial capabilities are essential for a producer to provide the required amounts and quality of produce for a processing facility. Processors may control the production practices through the contracts and their field representatives.

Producer advantages associated with processor contracts are:

  • Price and quantity contract agreements assure producers of a market.
  • Production expertise is sometimes provided by the processor.
  • Processors may provide harvesting assistance.

Producer disadvantages associated with processor contracts are:

  • Prices received may be lower due to less risk.
  • Quality standards may be stringent.

Cooperatives – marketing groups

With the volume requirements of most produce buyers, cooperatives may develop out of necessity. Objectives of produce marketing cooperatives are to secure higher prices, guarantee markets for produce and reduce input and handling costs for their members. Most fruit and vegetable cooperatives also provide various marketing services for their patrons including harvesting, grading, packing, cooling, storage, and transportation services. Cooperatives allow members to bring their produce to one location and pool their produce which allows producers to meet buyer requirements that they often cannot meet by themselves. However, some cooperatives also provide purchasing, pooling, processing, and bargaining functions for their members.

Some benefits that cooperatives provide are:

  • Growers gain benefits of large volume marketing
  • Often a sales specialist is available.
  • Growers gain benefits of increased bargaining strength.
  • Producers may reduce level of market risk.

Some disadvantages of cooperatives are:

  • Producers lose some independence by selling through a cooperative.
  • Members may only sell through the cooperative when prices are high and then use other marketing channels, which hurt cooperatives' reputations.
  • More experienced, better producers might subsidize inexperienced producers, and, therefore, not reach their profit potentials.

Retail outlets

Large, value-priced retail businesses require large volumes of product at low prices, which is impractical and economically challenging for small-scale urban producers. However, some opportunities exist for small acreage urban producers who are willing to deliver fresh produce to targeted retail outlets.

With the popularity of locally grown produce, some restaurants purchase locally grown fresh fruits and vegetables. Small independent grocery stores are also potential contacts for sale of fresh local fruits and vegetables. Other potential markets may include exclusive hotels. Selling to these markets requires a truck to transport the merchandise, time to deliver to each location (as several will be needed to make delivery cost efficient), and the ability to deal with several buyers on an individual basis. Buyers and sellers usually negotiate prices and delivery times. These outlets require frequent low volume deliveries of a variety of produce. Institutional markets may purchase lower quality grades and not require specific containers.

Producers need to make contact with potential buyers in the winter months before the growing season in order to identify packing, quality, container, and variety requirements and to become acquainted with buyers. Contact should again be made with the buyers prior to harvest in order to deliver samples and place orders. Growers should deliver the amounts and specified quality contracted on time. At the end of the season, producers should ask buyers what changes would improve the operation. Consulting with buyers allows them to influence the operation and makes them more likely to purchase produce next season.

Advantages of dealing with retail outlets include:

  • Growers may be paid at the time of delivery.
  • Growers can negotiate price levels.
  • Packing costs may decrease and special containers may not be necessary.
  • Producers replace middlemen in the marketing process.

Disadvantages of dealing with retail outlets include:

  • Superior quality produce may be demanded.
  • Producers need time and extra planning to develop client contracts and deliver produce.
  • There is the possibility of high transportation costs per unit volume.

 

Value-added processing for urban farmers:

For urban farmers whose production is limited by space or other constraints, value added processing provides a way to increase the profitability of harvest.

When deciding what product to produce and sell, research your target market and distribution outlets to determine demand, taking into account which foods and products are popular and/or desirable but difficult to find. You should also consider the cost of inputs, such as time, equipment, and raw materials, and select products that you can produce relatively inexpensively, so as to ensure a high enough profit margin and product viability. When considering starting up a home or commercial kitchen, it is important to research which agencies regulate licensing of the product, inspection of the facility, foods allowed and not allowed to be produced in each facility, local zoning laws governing the use of the building, and building codes.

Information on food processing regulations, training courses, and food safety updates are available on the Maryland Rural Enterprise Development Center website: http://extension.umd.edu//programs/agriculture/program/farm-and-agribusiness-management/maryland-rural-enterprise-development-center

For more information about value added processing and marketing in particular, see the University of Maryland Extension publication, “Processing for Profits: An Assessment Tool and Guide for Small-Scale On-Farm Food Processors,” by Ginger S. Myers, available for free download on the Extension website. See marketing resources link at the end of this chapter for details.

Advantage of producing value-added products:

  • Can be used to add value to produce that otherwise would sell for low prices (like cucumber) or might go bad quickly (like raspberries)
  • Producing shelf-stable products can enable sales in the winter to even out cash flows
  • Can provide an additional enterprise to employ more family members or employees

Disadvantages of producing value-added products:

  • Food safety and labeling regulations are more challenging than for fresh produce
  • Requires additional skills, equipment, and storage

Which markets fit your operation?

Producers must learn how to combine different market outlets that suit their production cycles in order to maximize profits. To do that, careful evaluation of what buyers want/need before making production decisions can help producers decide which market outlets are appropriate for their marketing plans and overall operations.

Here is a chart from University of Kentucky Extension that compares retail and direct marketing outlets, the resources required and their profit potential.

  Available Sales Opportunities

Things to consider

Direct: On-Farm, U Farmer's Markets, CSA Produce Auctions Marketing Cooperatives Local Wholesaler, Local Grocers, or Restaurants Regional Wholesalers, Chain Store Distribution Centers, Terminal Markets, or Brokers
    Production and Marketing Challenges

Difficulty getting into the market

low low low-medium medium high

Marketing time required

high low low medium-high medium

Compatible with off-farm employment

yes yes somewhat somewhat difficult

Importance of product quality (especially shelf life) 

medium medium-high high medium-high high

Investments: Time and Money

Initial commitment level required

low low medium-high high high

Management level required

low low medium high high

Level of service buyers expect from individual growers

low-high low low high high

Initial capital investments required

low low medium medium-high high

Postharvest equipment and facilities investment required 

low low low medium high

Income and Potential

Prices

high variable medium medium-high medium

Price stability

high medium medium medium medium

Product volume required

low low medium medium high

Market/sales volume potential

low-medium low-medium high medium high

Likely further development potential

excellent good good good fair-good
Marketing Options for Commercial Vegetable Growers, University of Kentucky Extension, ID-134

 

4. Promotion

Once you have established what your product is, where you are going to sell it, and how much you are going to sell it for, it’s time to promote it. But what does that mean and entail for an entrepreneur?

Promotion is communicating with your customers about the benefits (most important) and features of your product with the intention of soliciting a purchase. It involves using a combination of marketing tools including your branding, digital media such as your website and social media, print media that may include business cards and flyers, incentives such as coupons and free samples, and even farmers market demos and customer appreciation events.

Creating a brand through your story:

How you will present “your story” to your target market? People buy from people. Your best branding asset is you! Before you think about a logo and other marketing collateral, you need to be able to tell your story in a way that’s concise yet compelling. Your story is your promotional foundation.

In “Made to Stick,” authors Dan Heath and Chip Heath, state that there are five things you must do to ensure that your story “sticks” with consumers:

  1. Simplicity. Keep your audience focused with the critical essence of what you do.
     
  2. Unexpectedness. Creating surprise keeps your audience tuned in!
     
  3. Concrete. Be specific and relatable and communicate your story in a way that your audience will understand.
     
  4. Credible. Give details that help to paint the picture, but be authentic!
     
  5. Emotional. When you make your story about your audience’s needs and appeal to their emotions, they connect with you.

Think about what makes your farm business unique. Need help? Review your S.W.O.T. analysis from you business plan and pick your top three compelling strengths to highlight. This may include your production methods, unique location, and philosophy on why you grow and raise your food the way you do. It’s also important to incorporate any community giving, testimonials or recognized news stories. Most of all, it’s important to highlight what problem your unique business solves for your ideal customer. All of these strategies are a part of your relationship building portfolio that leads to sales.

Building your brand:

While you don’t need to be a graphic designer or best-selling author, you do need to be thoughtful about how your present yourself. Not only will you tell your story through words, but images, too. The most widely used image will be your logo. There is no mistaking Target’s bullseye or Apple’s...well...apple. When you are working with a graphic designer to develop your logo, think about how it conveys your story. Also consider all of the applications where you may use your logo. The simpler the logo design the better as it will have more flexibility in terms of reproducibility across various types of marketing collateral from your social media profile to your farm store banner.

Marketing collateral:

Ideally, you will work with a design professional to create a few basic marketing pieces such as your logo, postcard card or rack card, and business card. Additional pieces may include a farm business profile or fact sheet (your unique story), product sheet, list of articles and news stories about your farm, and price sheet. Testimonials can be sprinkled through your various forms of marketing collateral, both print and digital. It is important to develop a stylesheet for your brand that coordinates with your logo and includes the colors, fonts, and images that you will use throughout your marketing collateral. You want people to identify anything that you produce - from your website to your product labels - with you and your farm.

Make sure that all of your print marketing collateral includes the following:

  1. business name
     
  2. business location
     
  3. phone and email
     
  4. logo
     
  5. tagline
     
  6. website
     
  7. social media icons for the platforms you use (include your handle if it’s short)

If you need help creating print media and you are on a budget, consider creating your promotional piece in Canva or another similar on-line graphic design platform with a variety of templates to suit your marketing needs. Canva is free (with nice upgrades for a price, of course) and easy for even the most graphic design challenged person to use and still produce a splashy, yet professional piece.

Digital marketing tools:

As mentioned earlier, if you don’t have a website, you don’t exist. Working with a website developer to create your website is well worth the investment, however there are some low cost options on the market including user-friendly website builders such as Sitebuilder, Squarespace, Wix, Weebly, and WordPress. Your website will be a home base for all of your marketing information including promotional tools such as social media links, e-newsletters, YouTube videos, and even podcasts.

Website

There are several important factors to consider when creating a dynamic website. Remember that you only have a few seconds to capture someone’s attention. Your website should have a clean, professional look and include your branding elements. A good website delivers your story and drives the viewer to jump on your “call to action.” Here are ten questions to consider when building an effective website:

  1. Does your domain name convey your farm business image?
     
  2. Do your pages have a clean look with an appropriate amount of “whitespace” or are they cluttered?
     
  3. Do you have your social media icons and newsletter sign-up button at the top of your homepage so it’s easy for visitors to connect with you?
     
  4. Is your navigation bar simple and easy to navigate? Does it appeal to your target audience, and is it effective in directing visitors to what they need?
     
  5. Are you using concise, clear language for the average reader who may not know much about farming or your product?
     
  6. Have you created compelling content that is written in small paragraphs with large, easy to read fonts and includes appropriate images?
     
  7. Do you have a clear call to action?
     
  8. Does your site reflect your branding, story, and personality?
     
  9. Is your site mobile friendly?
     
  10. Have you set up analytics on your website to track usership?

Before you publish any of your materials, including your website, be sure to run it by a few friends, family members, and business savvy professionals including your local agricultural marketing or business development specialist. Sometimes what we think is obvious is as clear as mud to others. In addition, search for your business name or the title of any website, blog, newsletter, or podcast you are considering in Google or another search engine to make sure it isn't already taken. You can also look at the State of Maryland’s Department of Assessments and Taxation (DAT) searchable business database to see if your business name is already being used by another business. Once you settle on a business trade name, you will file it here as well.

Social media

Facebook, Instagram, and Twitter, Oh my! There are so many social media platforms available that it’s challenging for a social media professional to stay on top of it, never mind a farmer. In order to determine how to tackle social media, ask yourself two important questions:

  1. Who is my target market and what social media platforms are they using?
     
  2. Which social media platforms do I enjoy most? If none of the above, then which do I feel most comfortable with trying?

Once you decide on a platform, check around and observe how other successful small farm businesses are using their accounts to leverage sales. Often this is the best way to get ideas for your own social media strategy. At Extension, we are big fans of R&D - Research & Duplicate. If you see a successful strategy, think about how you can incorporate it into your own social media marketing. We are not suggesting that you copy, but you can use other’s work as inspiration. Regardless of what social media platform you use, here are some best practices:

  1. Know your audience and what content appeals to them.
     
  2. Develop a unique, authentic voice.
     
  3. Be an expert. Be transparent.
     
  4. Be consistent with posting.
     
  5. Mix-up educational with cultural and just-for-fun posts.
     
  6. Use a variety of content including original and user-generated.
     
  7. Give credit to authors and sources by “tagging” them.
     
  8. Use hashtags (#) and handles (@) to increase engagement.
     
  9. Post visual content (images, videos, GIFs, infographics).
     
  10. Make sure images are optimized for both desktop and mobile.
     
  11. Respond to fans (and haters) in a timely, positive fashion.
     
  12. Get a few professional photos taken (headshots, products, farm).
     
  13. Put your logo or website on images.
     
  14. Use your headshot, logo, and farm images widely.
     
  15. Use graphic design apps to create professional, eye-catching social media images.

Let’s reiterate the importance of video in your social media toolbox. It’s much more likely to generate engagement then a graphic. Taking it a step further, live videos earn more interaction than regular videos. Forget plain old text. It’s not a priority for many social media platforms including Facebook’s algorithms which heavily favor visuals because they gain more comments and shares. This trend is even more obvious as the pictorial Instagram continues to rise in popularity and has become the king of engagement. This is important to keep in mind when drafting posts and developing a social media planning calendar. If you have a Facebook page for your business, consider creating a Facebook Group which fosters natural interactions, something that Facebook algorithms encourage.

Graphic design for the graphic design software challenged

Let’s face it. Not all of us have time to learn how to manipulate Photoshop. Fortunately, there are both desktop and online programs and phone apps with fantastic templates to assist you with your DIY graphic design. Many people rave about Canva, but there are others to consider including Word Swag and Adobe Spark. Ask your friends and colleagues and do your research as new programs continue to emerge. Having these tools in your back pocket on a rainy day will make creating your marketing materials more of a fun creative project than a laborious chore.

When drafting materials, it’s important to use bold colors, unique images and illustrations, and don’t discount using text as part of a graphic. If done well, text can be compelling and add interest. While it’s best to use your own graphics, there are free, royalty free images available from online sources such as Unsplash and Pixabay.

The most important concept to keep in mind when creating graphics for your social media and other marketing collateral is the KISS principle (Keep It Simple and Straightforward).

Email newsletters: still one of the most effective marketing tools

While a sector of marketers claim that email newsletters are dead, others say it’s here to stay. According to an article in Forbes in 2018, 59% of B2B marketers report that email marketing is their most effective channel for generating revenue. While some point to emails as spam, surveys show that people don’t mind emails as long as they are relevant, interesting, and offer value. This is why more organizations are segmenting their email lists to target the content to the reader. In 2018, the Direct Marketing Association reported that “segmented and targeted emails generate 58% of all revenue."

There are many ways to begin building an email list. Keep a clipboard at your farmers market booth or farm stand. Have a sign-up button on your website, Facebook page, and in the bio of your Instagram profile. Also, many newsletter content management systems integrate with your website and social media accounts. Speaking of which, while you can develop email lists in your regular email service, consider a professional email marketing system such as Constant Contact, MailChimp, and CakeMail to name a few.

How do you build your email list? Consider your target market and what they find interesting to read. Do they enjoy recipes? Food storage tips? Fun facts about your farm? On occasion, it’s not a bad idea to ask your readers what they would like to hear more about as well as what they’d rather do without! Be sure to include graphics and videos because emails with these features tend to have higher open and click-through rates. Finally, make sure that subject line is catchy! September Newsletter may tempt your readers to hit “delete” while “Chris, Savor Summer at our Solstice Supper” may peak Chris’ interest. And if you add the sun emoji (while we’re thinking about the summer solstice), you’re likely to get even more opens according to the latest marketing statistics. Emojis and including the recipients name in the subject line boost open rates.

Podcasts help percolate your fan base

While bloggers enjoy photography and writing, that’s not everyone’s strength. Some entrepreneurs are more at home with creating conversational environments. In the same respect, while some customers enjoy reading blogs, others would rather get the same information by listening to a podcast. In fact 17% of the U.S. population listens to podcasts weekly, and this figure is on the rise. What are some best practices to keep in mind? Before you begin to podcast, you need to pick a theme. It needs to be specific enough to generate interest and target your listeners, but also broad enough to give you enough content to discuss without painting yourself in a corner. Where to start? What are you most passionate and knowledgeable about? Once you settle on a theme, you will need to pick a title for your podcast. It must be catchy, but it also needs to include keywords that would rank in a search.

Once you have selected the name and theme, it’s time to look into equipment and software. There are many choices with a variety of price points so do your research. Essentially, you will need a headset, microphone, and recording software. Record and edit your podcast, upload it to a hosting service like Podbean or Buzzsprout, and then list your podcast in directories like Apple Podcasts, Google Podcasts, and Spotify.

You are on your way to Podcastville!

Incentivize your customers

There are a few relatively simple ways you can incentivize new customers and retain existing patrons. Your incentives could include free samples at a farmers markets or community event (please check with the health department regarding sampling permits), a coupon in your monthly e-newsletter, or more expensive give-a-away schwag such as t-shirts, travelers mugs, or shopping bags. Regardless of which incentives you provide, think about what might interest your customers at a price point that you can afford and that is in alignment with your marketing goals.

Many customers are looking for an experience and more importantly, a community. Consider hosting a customer appreciation event either on-site or at a local venue if your space isn’t conducive to hosting guests. Some farms have had great success with creating virtual communities through facebook groups and social media photo and video contests using farm products. Winners win more product AND are highlighted on your social media and in an upcoming newsletter. These contests are a win-win because they use existing customers to promote your farm’s products and services. Remember, this is part of your marketing strategy so make it work for you.

Are my promotional tools working?

Now that you have a nice mix of tools in your promotional toolbox, you need to evaluate them from time to time to see which are most effective for your business. Social media has built in metrics to facilitate evaluation, while other tools will require you to set up a metric with a tracking system. For example, when you send your July email with a coupon (be sure to include an expiration date and a tracking code), track the redemption rate and sales related to that coupon campaign. You will also need to factor in how much you spend on any particular marketing campaign. For the email coupon, that will be your time to develop the coupon and newsletter as well as the cost of the email marketing service for that month. If you posted any social media ads for cross promotional purposes, you will need to factor in your reach, sales, and costs of the ads when determining if the promotion was a good fit. At the end of the day, increased sales is the ideal indicator for success, however increased engagement can lead to more sales down the road which is one of the reasons why social media and newsletters can seem like a time sink without much return on investment. Regardless, they can be an important component of your relationship building strategy. Finally, if a promotional tool isn’t working for you, feel free to tweak it or abandon it all together. It’s important to make an adjustment before you are too far down the road to the point of no return.

Bottom line when developing your promotional toolkit: talk with your customers AND competitors, think outside the box, be flexible, and have fun!

 

Summary

Pursuing the correct marketing channels can be just as important to the success of a farm as its production practices. The four P’s of marketing are product, price, place, and promotion. What are the benefits and attributes of your product? What price are you going to charge for your product? In what place will you sell your product? How will you promote your product to customers? To answer these questions, you will need to learn more and make decisions about many topics, including customer values, costs of production, market prices, direct and non-direct market outlets, branding, and digital marketing tools. Whether you are growing herbs for high-end restaurants or vegetables for your neighbors, taking the time to develop a marketing plan will help ensure that what you’ve spent so much time growing actually gets where you want it to go.

Additional resources and literature cited

To learn more about marketing, start with these helpful resources:

Agricultural marketing educational websites:

Food processing and value-added products

Direct marketing

Pricing

Selling online

Building your brand

Additional literature cited in this chapter