Farmers and ranchers create the foundation of the food supply chain with their fruits, vegetable and meats.
The food chain culminates in the kitchens of the people who eat the food. Food retains its story and authenticity when the consumer shakes the grower’s hand. For this reason, many growers and consumers seek to shorten the food chain through direct sales.
Today’s consumers have various reasons for wanting to buy their food from people they know, and it varies by demographic.
The “greatest generation” generally seeks to buy their food locally, so their food dollars benefit their communities’ economies.
Baby boomers and Generation X, the sandwich generations simultaneously caring for their older relatives and their own children, desire unprocessed, healthy food.
The youngest generations, the millennials and Generation Z, care about how the growing and processing of their food affects the environment and the welfare of the animals they eat.
Of course, many of the people who want to know where their food originates combine these reasons as they change how they buy food.
Opportunity in change?
“A critical driver for what people buy is because they care about food’s ability to impact the environment,” says Chris Kerston, the Savory Institute’s director of market engagement and public outreach. “That’s what the whole regenerative [agriculture] movement is about. The way food is grown and raised can solve so many of society’s problems — whether it’s climate change, world hunger or water insecurity. People connect that our food and clothes actually impact these mega-level issues.”
Direct marketing creates profitable food sales with the people who care about local economies, health and the environment. The main hurdle for rural farmers and ranchers is moving their products to urban buyers. This hurdle requires direct-to-consumer strategies carefully evaluated for financial sustainability.
Building a direct market
For years, the main avenue for direct sales between growers and consumers has been the farmers market. Yet many growers find it an inefficient use of their time.
“You sit there all day,” Kerston says of his farmers market experiences. “What you brought never seems to be what the market wants that day. You’ll always kind of have one hot seller of the day, but it’s never an even sale of all your products.”
Farmers markets, at their heart, are community gatherings that introduce you to people that seek locally grown food.
“Farmers markets are great if you want a place to meet your farmer, listen to live music and buy a couple items for a special meal that weekend,” Kerston says. “It’s not the way to replace getting groceries to feed your family on a weekly basis. We need to start thinking about how we get food to consumers more efficiently.”
He observes that grocery stores won’t go away, and many are meeting customer needs through food delivery. That business continues to grow.
Kerston sees more profit for farmers in other direct marketing efforts, such as food buyers’ clubs. Buyers’ clubs combine food delivery with optimal ease for both grower and buyer. The grower posts on the club website the food items available for delivery in the coming week. Club members place their food orders online. The grower assembles the orders and meets club members at designated drop-off points, generally in urban centers. This process is efficient for both the grower and the food buyers.
If your ag business primarily produces meat, Kerston recommends selling only wholes and halves through buyers’ clubs, or to individuals who seek monetary savings in wholesale purchases. “I wouldn’t mess around with quarters, because they don’t cut themselves cleanly,” Kerston advises regarding selling meat in bulk. “Who gets the tri-tip and who gets the flat iron?”
For the wholes and halves, set up orders with folks up to three to four months in advance. Require the customers to pay a half-down deposit. This helps your cash flow at the abattoir, and it covers the costs of slaughter, cut and wrap. When the customers pick up their meat, they pay for the other half of the order. At that point, most of that cash is profit.
“We only dealt with a customer once a year, because they would buy a year's worth of meat,” Kerston says of gained efficiency. “It’s all very scalable, and you can move a lot of meat very quickly to an often-overlooked demographic of suburban and rural people that buy in volume. We retained 95% of our customers because of the convenience.”
You can learn more about the Savory Institute at savory.global.
A shorter food chain
To do direct-to-consumer marketing well, view the concept as a business separate from the ag production side of the farm. The second enterprise organizes the transportation and distribution logistics, marketing, food safety, and packaging of the food produced on the farm or ranch. Many farmers and ranchers proudly care about the food they produce and how it affects the environment, but they don’t want to manage direct marketing.
The Savory Institute seeks to connect these growers to consumer packaged-goods brands that want to source food products grown in ways that regenerate landscape health. Through its Land to Market program, Savory endeavors to retain the story, authenticity and increased profit that growers gain by selling directly to consumers — without the growers shouldering the entire marketing effort.
“We have a cadre of amazing growers doing incredible things,” Kerston says of Savory’s Land to Market program, “and we have a growing number of amazing brands that want to connect on all the same values. The disconnect is in the supply chain in between. Business models now present themselves where a brand can form a long-term partnership with a grower for transparency and traceability.
“The brands want to tell the producer’s story in their marketing in a way that elevates them and creates more brand value.”
Partnering with brands can get you all the value of farm to table without you having to do the marketing and selling yourself, Kerston adds. “I think that’s the next plateau in this whole food-chain evolution.”
Regardless of the method you choose, using a consumer packaged-food brand intermediary or selling directly to consumers to retain 100% of their dollars, market opportunities abound in a shrinking food chain between grower and consumer.
Hemken writes from Lander, Wyo.