First-Generation Farmer Success - Roundtable Recap
We recently sat down with Tom Bennett of Bennett Farms and Liz Mason of Honey Bee Hills on the Direct Farm Podcast for our first Farmer Roundtable. This podcast is perfect for beginner Farmers looking for information on buying or renting land, finding a processor, and the importance of creating a strong local brand.
This blog summarizes some of the key topics covered in the Podcast episode, including Pricing and Packaging. However, we highly recommend plugging in while doing your morning chores or sitting in the driver’s seat to listen to the full episode: Farmer Roundtable: How These First-Generation Farmers Found Success.
Tom and Liz are both first-generation Farmers. Residing in Michigan, Tom purchased land while he was serving in the Marines. After finishing his service, he started farming as a hobby. Soon, word spread locally, and more people became interested in his pastured proteins, leading him to break into his first local farmer’s market to start selling direct-to-consumer. (Read more about Tom Bennett here).
Liz Mason lives in North Carolina with her partner, running Honey Bee Hills Farm, a certified organic produce, flower, and plant Farm. Their Farm beginnings were a happy accident for them, purchasing land after quitting their day jobs. What started as a means to grow local food became a full-time operation expanding to 15 cultivated acres! (Read more about Liz Mason here).
Tactic #1: Pricing your Products for Success
When starting a Farm business, Farmers often struggle with how to price their products. It’s easy to think that you should directly compete with local commodity prices for customers to justify buying from you, but both Tom and Liz disagree. They, in turn, price their products at a premium to account for their costs and give themselves a living wage.
“We wanted to make sure our margins were good on our inputs. We looked at the whole animal unit, broke down all the cuts, then valued each cut to get us to a certain amount above what it costs us to raise, market, and sell that animal. That way, we have a healthy profit margin on everything we do,” Tom said. “We’ve never wanted to be the cheapest in any given sector. We can price it how we want, and if we price too high, we’ll have stuff in stock for a little bit.”
Tom continued, stating that it’s essential to be fair, to yourself and your customer. “When I first started farming, I thought I could do it better. I could do it cheaper. I could compete on cost. We’ll be the Farm for everyone. But that’s not possible. Once you start looking at the costs, you’ll quickly realize you’re not going to compete with grocery brands' prices, so don’t try. They can’t compete with you on quality. It’s like comparing a Ford Escort to a Ferrari. Yeah, they’re both cars, but they’re completely different.”
Liz takes a similar approach, understanding that the value of her products is greater than that of what’s found at the grocery store. Instead of setting prices that are competitive with commodity products, she compares the products at the farmers’ market because they have similar quality. “We do our market research at the farmers’ markets to see what other Farms are charging. We’re usually priced towards the top of the market as we’re one of the two certified organic producers in our area. For us, that adds costs and value to the customer.”
Recounting her first farmers’ market experience, Liz shared how they price their products low: $3 for a bag of lettuce. Thankfully, another Farmer pulled her aside and asked her: ‘Have you done the math on what it costs you to pick this lettuce?’ This comment opened Liz’s eyes: “as you develop a business, you start understanding your costs. In vegetable production, labor is a huge cost. With employees, and rising prices in fertilizer, seeds, fuel, and labor, it makes you realize what your time is worth and how you price your products.”
Your customers and community understand the value of your products. They know purchasing locally demands higher prices because of the quality and care you put into your products. More than 80% of customers will pay more for a product to support local businesses - that’s huge! Charge your customers based on what they’re willing to pay versus what they could pay for commodity products.
Tactic #2: The Ins and Outs of Packaging
Packaging is a reflection of your brand. From the colors to the labels to the packaging materials, it represents what you value and who you are. However, every Farmer can take a unique approach to this. Some opt for outside resources, like Tom:
“We found our private labeling company from our USDA processor because that’s who they were using, and it was simple to implement for our butchers. With private labeling, there are butcher supply companies in almost every state that Farmers can call and get set up. Then, the USDA will approve that label and sign off on it. It’s important to order the labels as needed – we usually buy like 20,000 – 30,000 at a time.”
However, other Farmers, like Liz, opt to use more “in-house” processes regarding packaging and labeling. “I design all of my labels in Word, then I print them out. That works for us for stickers on lettuce bags and other things.” This ensures that the Honey Bee Hills Farm logo is shared on all their products, making their brand recognizable in their community.
The two Farmers both agree on finding regional box suppliers. Tom suggests that protein Farmers look at the box from your butcher. Often, there’s a stamp at the bottom of the box indicating who they got it from. Liz suggests that Farmers reach out to other fellow Farmers at the market because they’re often willing to share where they get their supplies from, and some will even partner with you to order large quantities of boxes to split shipping costs.
However, the issue of colder products, like proteins, was discussed when Tom shared that insulated boxes with additional cooler packets can rack up costs for your Farm. That’s why Tom opts for a different approach, requiring his customers to keep a cooler out for deliveries. “I've never had a customer call me upset because they forgot to bring in their orders. When I leave a $75 order on a doorstep, and there's no cooler, I call them. If no one answers, I’ll leave the package because refunding a $75 order is a better possibility than re-delivering the next day. I won’t be going back to that neighborhood for another two weeks…
So if it's a $75 order, my cost is $35, what will it cost me to redeliver it? I have too many orders to get out to worry about it. No one has ever had an issue, and nothing has gone bad. So I guess until it becomes an issue, we'll just keep doing it that way!”
Barn2Door helps streamline the Delivery process for both Tom and Liz, making it easy to remind customers of their orders and deliveries. With automatic Order Reminders, both Tom and Liz leave instructions about how to get or prepare for their order arrival (i.e., have a cooler ready at the door). This is typical for any Delivery service and makes it convenient to shop from local Farmers.
Every Farm needs to start somewhere. These first-generation Farmers found success through trial and error. They understood the value of their products and services, and in turn, the community saw their value. Now a staple to their local areas, both Tom and Liz have created thriving local businesses.
Barn2Door provides an all-in-one solution for Farmers to grow and manage their business. If you’re curious to learn why successful Farmers run on Barn2Door, watch this 5-minute video.