Direct marketing and value adding can be the logical next step on the path to farm expansion. Whether it’s growing strawberries to sell through your own retail outlet, or hosting dinners in the old bank barn, or any of the 1,000 other possibilities, such opportunities can help the farm capitalize on its investments and expand its markets.
But it takes careful preparation. All too easily, farmers can find there are way more twists, turns, ruts, and sometimes even dead ends than they thought on the path to selling value-added products and services.
For this column, we talked to experts and farmers with experience in value adding to uncover these pitfalls.
If you’re thinking about selling to the public on your farm, there are a lot of things you need to consider, cautions Jessica Kelly, direct farm marketing program lead with the Ontario ag ministry. While it seems exciting to open a farm market or host an event on your farm, the reality is that you could be dealing with regulations, extra insurance, zoning changes, and an increase in property taxes, she says.
Getting all the required approvals and paperwork in place will probably take longer than you think — and cost much more than you think as well, says Amy Strom, co-owner of Strom’s Farm and Bakery, an agri-tourism operation near Guelph, Ont.
While it varies between municipalities, Strom says in her experience approvals that seemed like they should be issued within a couple of months ended up taking three years.
“It wasn’t difficult but it took a long time,” Strom says. She advises familiarizing yourself with all of the regulations that will have an impact on your venture ahead of time.
And make sure you contact your insurance agent. When you open up your farm to the public, you should be informing your insurance company due to the extra risks involved with wagon rides, infectious diseases from exposure to animals, and other risks to the public on your farm, says Kelly.
Strom agrees. You need to be completely transparent with your insurance company about what you’re doing, she says. “You want to make sure you’re covered… you don’t want any surprises.”
Strom says it pays to get three quotes. The cost of insurance is significant and can vary substantially between companies.
Also be prepared to take the time you need to get on top of your costs.
Too often, producers start value-add or retail projects without understanding the prices they’ll need from the market in order to generate an adequate return on their investment and labour, says Kelly. As a simple example, she asks, “If you start by making jam from berries that would otherwise go to waste, if the market grows can you still make money if you are no longer using ‘waste’ berries?”
Strom says some farmers are tempted to offer wagon rides for free or to give away pumpkins, but she cautions against doing anything for free. “Wagon rides have a cost. The cost of maintaining the tractor, the fuel, your time.”
There’s also a price to changing your mind mid-stream. Strom says there can be a backlash when people are asked to start paying for something that was previously free.
Perhaps the biggest question, though, is one that you have to answer by looking in the mirror.
Do you have the right personality for the project, especially if it involves selling to the public? Is it the kind of challenge that would add a spark to your life, or would you be dragging yourself out of bed?
“It takes a special type,” Strom says.
Do you like meeting people? Do you like answering questions about your operation and your product? Do you know how to handle customer complaints?
Meghan Snyder, co-owner of Snyders Family Farm, an agri-tourism operation near Plattsville, Ont., agrees with Kelly. When she says “You really have to like people to run an operation like this,” she pauses and adds with a laugh based on experience, “I mean really, really like people.”
Strom goes even further. Not only do you have to like people, you have to like them in your personal space.
If you open up your farm to the public, she says, “you can put up fences but you’ll still end up with people in your backyard.”
Strom recommends keeping the public space separated from your living space so you can maintain some privacy. Also be prepared, because it may take a lot more room than you realize.
When the Stroms developed their on-farm bakery, they thought they were being smart by having their loyal customers come to a retail shop that they set up in their garage attached to their house — nice and convenient when the Stroms had to work there, but still not in the house itself.
Then, when they actually opened the business, they learned that success means getting as many as 5,000 people on the farm on a single day.
Everyone wants to be successful, but not everyone wants 5,000 people standing in a line beside the kitchen window.
Work-life balance is also a challenge when they are open, says Strom. “It’s long days, seven days a week, which makes it difficult to find time to rejuvenate,” she says. “With the bakery attached to the house, there’s a tendency to work more.”
Social media adds to the challenge of work-life balance, says Kelly. “It’s hard to turn it off. You could get people sending you messages late at night expecting an immediate response,” she says.
That’s been Snyder’s experience. She says today most queries come in via email or social media and people expect a response within the hour even if it’s 10 o’clock at night. “It can be hard to bring your best self when you’re tired.”
Not only will you be dealing with customers day in and day out, you’ll also likely need staff. If you don’t enjoy hiring, training and managing, you’ll need to hire a manager, says Strom.
Staff training is key, agrees Kelly. Do you even know how to give your staff safety and first-aid training? Do they know how to respond if someone gets hurt?
You have to wear a lot of hats, adds Snyder. “Farmer, builder, creator, HR… you have to have a lot of skills when you are letting people onto your farm,” she says.
Strom found that too. She chose her job title — director of first impressions — because it encompasses the many hats she must wear and helps keep her focused.
The job title also keeps her focused on the job she always has to be up for, she says. “First impressions are really important to keep people coming back.”
What are the opportunities?
Today’s consumers, especially Millennials, are interested in a product’s back story, says Jo-Ann McArthur, president of Nourish Marketing, a Toronto-based food and beverage marketing business. They want to know not only how the food was grown and processed, but also how the workers and animals were treated.
Be aware, too, that nine out of 10 Canadians have never been on a farm, so opening your doors to the public can fill a niche.
Rebecca Mackenzie, president of the Ontario Culinary Tourism Alliance, a not-for-profit organization that has helped develop many successful food tourism ventures, is also excited about the prospects for farmers. She says the three Ts —Taste, Tour, and Takeaway — can help leverage more sales and diversify income.
When consumers taste samples before they buy, there is an opportunity for them to become more educated about the product, which adds value, explains Mackenzie. Plus, people are more likely to buy if they’ve tasted the product, she adds.
Tours also add value because people want to learn the story behind a product, adds Mackenzie. But tours do not have to be guided tours, she says. Signage in the blueberry patch explaining the history of the farm and the family can provide that educational piece, she says.
Continuing with her example of the blueberry farm, Mackenzie says having pies for sale creates a takeaway element. People become ambassadors for your farm when there is a takeaway, she says.
Resources
- Ontario Farm Fresh Marketing Association, a not-for-profit organization for farmers interested in direct sales. Workshops and annual bus tour.
- Alberta Agriculture Direct Farm Marketing Checklist
- Culinary Tourism Alliance tourism association is an industry-led, not-for-profit organization that promotes food tourism.
- The Agri-food Management Institute offers Transition Smart workshops across Ontario for producers considering making the leap to processing.
- North American Farmers’ Direct Marketing Association (NAFDMA) is a trade association for farmers who are passionate about agritourism and farm direct marketing.
