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Wholesale Logistics Presented

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This article comes from the NOFA/Massachusetts 2013 October Issue Newsletter

by Caroline Pam, co-owner Kitchen Garden, Hadley, MA Reviewed by Cathleen O’Keefe

 
Caroline Pam and her husband, Tim Wilcox, operate a family farm in the Pioneer Valley. Over the past eight years, their farm has grown from one acre to twenty. They don’t, as Caroline says, “ship pallets to Whole Foods,” nor do they “do commodity crops,” but they run a pretty good business managing a CSA, attending five farmers’ markets, and selling wholesale to many restaurants and other outlets in the Pioneer Valley. Caroline shared the following tips, gained in her years on the farm. Before selling to customers, establish a brand identity. A business name or slogan will give people a sense of what you are about. Sell yourself, your experience, your knowledge and dedication, and always be clear about your standards. Your self-presentation defines how you are seen. Small local businesses prefer to establish personal relationships. In the case of restaurants and retail stores, make a list of businesses that provide food in line with your standards. If you wouldn’t spend your money there, you probably do not want to sell your produce to them.
 
Many new farmers struggle to build a customer base when they are first starting out. Caroline has two words: be shameless. When meeting prospective new clients, give them your business card or contact information and be sure to get theirs as well. Do not be shy. Continue to send product lists to possible clients, even if they are not currently purchasing from you.
 
Get to know your buyers by soliciting feedback in frequent communications. A newsletter can be a great way to share stories and information about your product line. Offer samples, especially when introducing new products. Trust is created through frequent, reliable interactions. When determining what crops to grow, know what sells in your market, and then grow more of the best selling product.
 
At farmers’ markets it’s important to be the first vendor to sell a particular item. In many cases this means planting early varieties of crops or growing crops in a greenhouse to shorten production time. In wholesale markets, however, it is more important to guarantee a supply; Caroline recommends offering only crops which you can produce regularly and in sizeable quantities. Selling wholesale has many merits, including having to harvest only what is ordered and thus reducing waste. In addition, wholesale production can be significantly less time-consuming. Caroline estimates that at the Kitchen Garden, they can sell in one wholesale order as much as they sell in eight hours at a farmers’ market.
 
For most wholesale buyers, an attractive product list offers both staples and niche products. To maintain consistency, always deliver products that are uniform in size, well packed, and well washed. Keep your customers happy by offering refunds on any damaged or sub-par product. It is important that all vegetable varieties have a good shelf life, unless they are offered as a special or marked for quick sale. Labeling seconds (fruits and vegetables with minor blemishes) and pricing accordingly will help maintain quality standards.
 
Before setting the season’s prices, know what your quality standard is and price accordingly based on other wholesale and retail prices. Subscribing to competitors’ wholesale lists will also give you a good gauge of market prices. In general, wholesale prices can be as little as a third of retail prices, but a grower of high quality or specialty products can charge a premium for those products. Additional services, like weekly deliveries, flexibility in ordering time, and small order quantities also garner a higher price.
 
Caroline recommends providing clients with a weekly price list. She publishes hers on Friday afternoon and has a Sunday evening deadline for orders. Orders are delivered on Tuesdays, which leaves Monday for harvesting and packing produce. She advises farmers to never negotiate prices but rather solicit more information about the customer’s needs in hopes of better tailoring future orders.
 
During a farm’s peak season, a common problem is how to price products of which you have too many. If you have excess produce, avoid lowering prices; rather, find other buyers and use incentives, like bulk discounts and lower prices for seconds. Offer specials of the day/week for very ripe, abundant crops.
 
When dealing with restaurants, be knowledgeable about what you are growing and how to use it in recipes. Always be prepared to offer substitutions, in case one crop is unripe or in short supply. Work on their schedule: call between 2 and 4 pm, after the lunch rush is over. It generally takes a chef one to two weeks to incorporate items into a new recipe. In Caroline’s experience, chefs are not necessarily concerned about organic labeling; they’re more focused on quality and flavor.
 
In order to generate a profit, gross sales for the year should be five times net sales. Be patient. At the Kitchen Garden, the owners didn’t pay themselves for the first four years.
 
Resources • Wholesale Success: A Farmer’s Guide to Food Safety, Selling, Postharvest Handling, and Packing Produce. Jim Slama.

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