Retail and restaurant sales are an opportunity for farmers and food businesses to increase sales volume and revenue, while building brand awareness in the local marketplace. But selling farm products to retail buyers isn’t as easy as showing up with samples. Before approaching grocery store and restaurant buyers, farmers must understand the market, obtain required insurance and certifications, and comply with industry standards for packaging and labeling.
Understand the market: products, people, promotions and pricing
Visit the grocery store(s) you wish to sell product to. Survey the store’s current products, customers, promotions, and pricing. Pay special attention to similar products that your products will compete against, noting the price range. Typical retail mark-up is 40%; if the retail price of fresh asparagus is $2.89 per pound, the grocer paid about $1.73 per pound.
Enjoy a meal at the restaurant you wish to sell products to. Look for language or signage that promotes local sourcing. Notice fellow diners- will your products appeal to the restaurant’s typical customers? Review the menu and consider if your products are a good fit. Make note of prices on the menu. Restaurant industry food costs average 30-35%, depending upon the style of restaurant.
Insurance and certifications
Retail and restaurant buyers may require vendors to maintain a level of product liability insurance, worker’s compensation and/or other insurance policies. Grocers may require vendor farms to be Good Agricultural Practices (GAP) certified. Buyers will appreciate a copy of your farm’s food safety plan, and an invitation to perform an on-farm food safety inspection.
Be prepared to provide buyers with documentation proving your products are USDA Certified Organic, Certified Natural, Verified Non-GMO, Animal Welfare Approved or other specialty certifications. You may need to explain terms like “grass-fed”, “pasture raised”, “natural”, “antibiotic free”, and how those terms can be used to market products to customers.
Packaging and labeling
Grocery stores and restaurants require product to be delivered in packaging that complies with industry standards. Packaging may need to include USDA or industry grading, sizing and quality standard information.
Understand legal regulations for labeling retail products, including Country of Origin labeling, USDA inspection seals, label claims, weights and business contact information that allows for product traceability. Many grocers require a price look up (PLU) or universal product code (UPC) label.
Pitching your farm products
Farmers that understand the market, obtain required insurance and certifications, and comply with industry standards for packaging and labeling, can approach buyers with confidence! The first successful sale is the start of a long-term mutually beneficial buyer-seller relationship.
Need help getting ready for retail?
Join the Ohio State University Direct Food and Ag Marketing Team for MarketReady Producer Training.
Dates: Two-part training on Thursday, November 1, 2018 and Friday, November 9, 2018
Time: 10 a.m. to 2:30 p.m. both days
Location: OSU Extension- Cuyahoga County, 12200 Fairhill Rd. E Bldg. Cleveland, OH 44120
Fee: $30 covers both days (lunch is provided)
Register: Contact gardner.1148@osu.edu or 740-289-2071 ext 132 by October 30th.
*Article originally published in Farm & Dairy Newspaper