PANEL 3 Lessons from Different Market Strategies

Jamie Lionette, Sales Director, City Growers (Moderator)

Kelly Erwin, Project Director, Massachusetts Farm to School Project

Rachel Corey, Specialty Foods Buyer, City Feed and Supply, Inc.

Michael Leviton, Owner and Chef, Lumiere Restaurant

(AUD = Audience question or comment)

Kelly Erwin could work with folks interested in setting up relationships with institutions

JL:  City Growers entering 4th year growing and selling, successes and challenges. They started with small plots in Dorchester and Roxbury. There is an advantage to being right in the city.

City Growers focused on selling to restaurants in first few years, though it was not too successful. They sold directly to restaurants and markets. The food was very fresh, moving from field to the table in one day. They grow salad greens and lettuce.

It is beneficial to everyone, and the source of the food is local. Getting the production picked the same day for the customer is important. This model brings the farmer and the customer together. The first step is establishing a direct relationship with the customer that is also more forgiving when a crop isn’t available.

Taking core items and getting on menus is important. Some restaurants say “City Growers mixed greens”  so that people know their food is sourced from local farms.

One of the challenges is that because they do not use pesticides, etc. they don’t always have huge bounty. The cash flow is more difficult for the CSA model. City Growers did it differently. This year, they are working through a farmers’ market (direct sales). That works well, but more time is needed (4-5 hours per week) to be at the market and to meet customers.  That  can be tough for startup farm.

RC: City Feed and Supply brings customers and local urban farms together.

Michael:  What does dollar amount look like? Direct-to-restaurant or market sales allows for greater access but a bigger discount. This is more expensive for the farmer but develops a reliable relationship with chefs. Several years ago I produced(??) red-leaf lettuce for restaurants, which devoted a lot of land to this purpose. But it is good for the restaurants to know the prices they are getting. It is more predictable for them. The only other cost is the delivery, but it is essentially a guaranteed sale.

JL:  Growing specifically for restaurants gets what chefs want at price chefs and farmers want, they will buy it every week, only extra time/resources is delivery; more costly at  farmers market.

KI:  Question for audience:  How many attendees currently farm in urban areas or want to start?  (about ½) How many have a market they are thinking of?

AUD: John Bashingall (??), Southeast Regional Director for the Trustees of Reservations , lots of land & greenhouse space to farm, non-profit, want to hire youth, but how to start?  There is an indoor space of six acres in New Bedford that is being used for farming. But New Bedford  is not Boston.

KI:  Tease out what your options are:  develop relationship with customer – this allows negotiation for business planning, then what should you be growing, packaging and distributing.  How much does it cost you to grow food? How do you package and distribute it? A business plan is half and half:  ½ numbers/abstract plan and ½ relationship-building. Direct-to-customer means lower prices but greater predictability and a stronger customer relationship.  Relationships make all the difference, and the customer will go the extra mile for you.

ML:  New Bedford is not Boston, but is very large seafood market, all about relationships, and figure out where you want to start.  My restaurant will be more demanding, but I’ll pay a premium. I can be more forgiving if you are short of something in a given week. Greenhouse space = long season and winter market, with high quality food.

AUD: John Bashingall (??) again – We have a multi-faceted mission. It’s not just about agriculture, but how it fits into a community.

KI:  Could help them work with New Bedford school system. Think of how New Bedford will benefit from this.

JL:  Don’t need to focus on high end restaurants, look at neighborhood restaurants, institutions, sell at same price but remember that different goods are wanted by different buyers. Uptons Corner and Haley House are two examples where agriculture is seen as part of community service. Certain crops work in these urban environments, such as collard greens and carrots.

KI:  Institutions look at processing, what kitchens are prepared to work with. Institutional customers sometimes don’t feel that they can buy products for their needs unless they are packaged. Convincing them to deviate from this standard practice is part of developing a relationship with them.

JL:  Find items that the rest are already using. Conventional food more influenced by strange weather patterns (snow storm in Arizona made lettuce prices double).

AUD:  Jen Fagel – The Pearl meat factory is turning into a large community kitchen/commissary kitchen. There is a space for cleaning and prepping, which adds value. We expect it will be up and running next year.

JL: Much of what we do and what our customers want is contingent upon our love of the city. Many people have a passion for city-grown local food. A local market is a happy market. There is pride in buying from our own area. Customers want this. This is true for both restaurant customers and restaurants.

KI:  Private schools higher end buyer – want to highlight in cafeteria, admissions materials, really draws students, will buy at high price!  If you only have small amount of land look at crops that grow high-yield. MDAR has lots of staff that are experts in certain areas – free resources!!  At startup look for lots of advice for business plan.

AUD:  There is a micro-stand in Brookline. It is a small youth program, where teens grow the food. Local chefs were interested in supporting the program because of the youth, but skills were lacking. So the organization allowed the chefs to write off part of their purchase as a charitable donation. They then advertised the local produce and the program on their menus.

ML:  Putting the name of urban farms on the menu promotes commitment to local/sustainable agriculture and selling a story.  Local produce costs more, but the story helps sell the product and justifies the price.  The more back story the better!!  Trained wait staff sells it.

RC:  understand wholesale not everything, but distribution portals like Farm Fresh RI and Food-Ex.

KI:  Wholesale sometimes has a better margin than retail, because there is less time, work and travel involved than in a farmers’ market. If you can find a nearby customer, that can support you well. If they like getting out and talking to customers, farm markets may be best; if they just want to grow and sell, wholesale may be best.

AUD:  Odessa Piper – I once owned a restaurant in Madison, WI. We tried to source our purchases for local foods. We also practiced what I call “gleaning.” We would write menus from what was available and started working with farmers to get their leftover produce to our restaurant. We actually encouraged our restaurant staff to go to the farms and help farmers glean what was the last of their crops, often less desirable foods. Otherwise, these foods would have rotted in the fields. Farmers are often so focused on food in “good condition” that they overlook wilted or damaged crops that may have great use in a more processed recipe. Even crops that are less flavorful could be processed into things such as sauces and reductions, which are delicious.

ML: It is important to try to test different things and seek customers for different things.

JL:  You need to have core items that are as reliable as the restaurant.

AM:  Odessa Piper – This requires a lot of trust, and thrifty and creative chefs. Also, wait staff that are involved in this take great pride in what comes to the table, and will tell the story of the food to the customer. That’s good marketing.

ML: Gleaning on urban farms is tough.

AUD:  How much is a head of lettuce?

JL:  A 24-count case of lettuce heads goes for approximately $18-20; it can go for as much as $30.

RC: If we buy for $1.50 then we can sell if for $2.00.

AUD:  Outside of Boston, Many larger farms are growing for institutional uses. Are there any examples in other urban areas of urban farmers growing for institutional uses such as schools?

KI: There is a special chef program in Brookline schools. Here’s another institutional issue. When the Farm-to-School program started four years ago, we all though colleges and universities would be our customers. But 90% of such institutions have contracts with corporate food management services. The same is true for most grade schools. Many had national or regional contracts and would not buy from local vendors. And they may not buy anything from you. Therefore, ask them right away if their food services are self-operating or do they have a management company running the food service?

Also, there is an opportunity to connect your urban farm to larger rural farms so that you would be the market portal. Together you can create relationships and have more at your disposal.  Represent yourself as one entity growing a lot of variety. Then you could continue to sell a given product if you run short of your own supply. You may not want to or be able to grow a large list or amount of produce, but you can pool your supply with others.

JL:  It’s hard to get into institutions with a corporate contract:  But you can find niches within these institutions – e.g., salad bars, etc.

AUD: ? – This question is for Rachel and Michael. Does it matter how often you can get the food you want delivered. What’s your purchasing schedule?

ML: It depends on the products. Some will only deliver baby greens once a week, but I have to have it fresh. I don’t want to serve 8 day old greens. I need a higher delivery frequency – at least two to three times per week. On the other hand, root vegetables and winter crops I can buy once per week.

RC: We want to work with products to the extent we can in a way that accommodates their supply channels. We could buy once a week from one grower and another grower a few days later.

AUD: Michael DeMino, Massachusetts Small Business Center – There is a free public resource that may not have a lot of agricultural insight but is able to give farmers a lot of expertise in business planning. We have six state offices. Also, I’ve only had the privilege to eat at Lumiere twice, but if you ever get the chance to go, please do so. Go for a chef’s tasting, and go with parents. The website you should visit is http://www.msbdc.org.

AUD: Is there a mismatch between the school season and the growing season?

KI:  September and October are the best months for farmers, but have farmers with greenhouses  can provide winter crops. The season is extended through meats, cheese, honey, maple syrup, etc.  We are launching a new promotional project called “Harvest of the Month” in pubic schools for specific products, such as pears. Go to website and get materials.  Worcester works with a lot of different farmers, some just do one or two crops

JL:  City Growers sell through December.

AUD: ? – How many schools do you work with?

Kelly: Many just want one supplier of local crops.

AUD:  Orion ?, Eddleston (Eggelston??) Farms Market Coordinator – How can we organize farmers’ markets to support local farmers? Many customers want crafts and other non-food items at the market, but that can detract from sales and the focus on local farms. What is the farmers point of view?

Jamey: The less craft that are available, the better. The focus should be on local foods.

AUD: Orion ? – Maybe markets can be arranged so there is a focused food area, with crafts and other non-food items in a different area.

KI:  Do  farm market folks at MDAR have advice?

AUD: MDAR person:  (David Webber?)  There has to be a balance, rotate crafts but keep farmers. We don’t really have hard data.

KI (?): Balance is key. Use what works in your neighborhood. Crafts attract browsers rather than shoppers. Separate the sales.

JL: One advantage of having craft as well at a farmers’ market is that there is something available for sale of farmers are having a bad season.

AM:  Other venues – summer camps, field trips to farms.  Health clubs with cafes.

AM:  Question about more traditional marketing/distribution, are any open to local agricultural produce?

JL:  Baldor, Costco, interested, but scale is issue for urban farms. There is probably less of an opportunity for urban farms.

ML:  For Cisco, it has to be efficient. You need a sufficient stock.

KI:  It may not be great price, unless they make you “pet farmer” and have a story, and could sell for more. There may be a market opportunity for large distributors.

AM:  For small-scale growers, are there resources to help us set prices?

ML:  Chelsea terminal markets provide a daily crop update and set a daily price, and will tell all wholesale commodity prices. This is not competitive for small growers, but it gives you an idea.

KI:  How much does it cost to grow your food? That is a guide.

JL:  Look at how other local farms are selling. Pick two farms, one high and one low, and put yourself in middle.

RC:  Make more selling to restaurants than institutions.

AUD: Ellie O’Keeffe – Cisco’s biggest customers are cafeterias, but cafeterias want local food. Seek them out.

ML: One thing about trying to sell larger volumes is that you shouldn’t put all your eggs in one basket. If a buyer decides to use another source, you’re in trouble. You need to diversify.

AUD:  Are you Interested in hiring a sales person?

JL:  I do sales, but my real role is to promote farmers. Not many farms have a dedicated sales person, but that’s the nature of maintaining farming.

KI:  Use a family member or business partner.

ML:  Make sure you as small business person have diversified portfolio of where you can sell.

AUD: Question for Michael – Have you seen any collective buying (i.e., corporations, businesses)?

ML:  All big businesses (Google, MIT) have corporate cafeterias. Bon Appetit is an excellent example because they are very committed to local and sustainable food purchasers and promoters.

KI:  Emmanuel, Lesley, MIT have Compass/Bon Appetit accounts. They are very devoted to buying directly from farmers.

AUD:  Regarding Bon Appetit, the real challenge  for urban farms is trying to find customers and facilitating more local buying on campus. Could you help folks find buyers?

AUD: We all grow outside cities, but we need to pass inspections to become certified, and we need to get insured, which is difficult and expensive. How can we manage that?

KI:  The Good Agricultural Practices (GAP) program will require you to be insured and get certification. Contact Mass DAR and speak with the GAP inspector. Ask about GAP certification and how they can help you. They are there to regulate but also to help you get things done.

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