In the second decade of the 21st century, growers willing to be proactive marketers potentially have more ability to influence their potential for success than ever before. Social media, instant communications, the changing wants and needs of consumers, societal change and other factors provide opportunities generally unavailable to most growers in years past.
At the same time the availability of instant communications in a global economy can create challenges for even small farm owners – challenges that must also be addressed proactively. John Berry, business management educator at Penn State Extension, suggested growers seeking to optimize return on investment must adopt the mindset of a marketer rather than viewing themselves as simply sales representatives for their farm’s products. “We must eliminate the word ‘sales’ from our thoughts and mouths,” Berry said.
According to Berry, every successful businessperson eventually must become involved in finance, production and marketing.
“These three activities are essential to effective business management,” he said. “While most farmers describe themselves primarily as producers, they also have to finance and market what they produce.”
Professing to be “wildly optimistic” about the future of the food and farm products business in the long term, Berry noted the future challenges are tremendous.
“We live, socialize and work in a global environment. At any time, an event on the other side of the Earth could sneak up and throw our business, our lives, into a whirlwind of uncertainty and change,” he said. “If we cannot operate in these conditions, we best find a job working for someone else. Managing an enterprise today is not for the faint of heart.”
As used by professionals like Berry, real differences exist between the terms “sales” and “marketing,” especially regarding the mindsets implied by the two words. Growers concentrating on sales are generally focused on selling the crop in the most expedient way at an acceptable profit; buyer, seller relationships tend to be structured, bound by contract.
The marketer, on the other hand, is focused on selling the entire crop not only at a profit but realizing the entire potential income the crop is capable of returning to the farm; a minimal profit is not acceptable if enhanced profitability is available. Optimizing return means the entire crop is not always sold through one or even two outlets; flexibility is at a premium. Marketers look to the long term rather than the short; future sales are as important as present sales.
Delight your customer
Berry said the foundation of his approach to working with growers is borrowed from his mentor, Dr. Richard George. “He regularly taught food marketers their real mission was not to satisfy their customers, but to ‘delight’ them. A satisfied customer will sometimes try others to provide for their wants and needs. A delighted customer remains loyal and, becomes your best promotional tool,” Berry said. “The marketers I know that are successful continuously assess who they serve and how to exceed their customer’s needs. This is the challenge. What will delight your customer?”
Diversification and marketing
Growers desiring to improve profitability and or the stability of the farm operation must create change to achieve those goals. That can mean adjusting the timing and destination of crop sales, changes in the crop grown or, more commonly, the exploration of one or more avenues for direct to customer sales.
BelleWood Acres, a Whatcom County, Washington, orchard, demonstrates how a grower can shift from a sales mentality to a marketing focus and, in making the shift, enhance the potential for profit and long-term stability. As reported recently in Growing (May 2016), BelleWood’s owners came to the apple growing business with a focus on sales.
When John Belisle and his wife and partner, Dorie, arrived in Whatcom County in the mid-1990s, “We thought we’d go up to Washington and grow some apples, put them on a truck to the wholesalers in eastern Washington and go to Hawaii for the rest of the year,” Dorie said. “What a silly fairytale that turned out to be!”
The “fairytale” for the Belisles came to an unwelcome end just as the trees they’d planted in their new orchard began to bear marketable quantities of fruit. A price collapse combined with a devastating pest infestation made it obvious to the couple that having all the BelleWood apples in one basket was unacceptable as a long-term plan. Diversification and the marketing required to make that diversity work provided the solution to the vagaries of the wholesale market, at least for BelleWood Acres.
To address the twin issues of profitability and survivability, John and Dorie called on previous business experience to develop a marketing plan for the future. As a result, BelleWood Acres is, today, a multifaceted operation with an established marketing plan addressing present and future growth. Agritourism, traditional wholesale, alternative wholesale, on-farm processing, U-pick, retail and a distillery all coexist. If one profit center is adversely impacted, others are available to potentially pick up the slack.
Traditional wholesale is still an important part of the BelleWood marketing plan. Of the 1.6 million pounds of apples harvested each year, the orchard still ships about 450,000 pounds to wholesalers in eastern Washington who need a premium apple to satisfy their own customers. The Belisles have also created wholesale operations of their own, marketing to specialty outlets they’ve identified locally. Premium quality apples go to a large, but still local, regional grocery chain, as well as to food co-ops and other local retailers. A third “wholesale” outlet consists of providing apples for the school lunch programs of five local school districts.
The school program demonstrates the importance of determining a potential customer’s needs and then marketing to those needs. Whatcom County’s districts wanted to serve fresh, juicy apples to children, but Belisle noted the cost was prohibitive because of the time and costs of slicing and dicing apples into portions appropriate for children. Responding to customer needs, Belisle reported, “We offer the districts high quality, but small ‘single-serving’ sized apples needing no preparation. We filled a need, saved the districts money and both the kids and BelleWood benefit.”
BelleWood’s U-pick operation (as many as 600 cars per day) led to modest and then ever-increasing retail sales and, ultimately, a 14,000-square-foot agritourism center housing a full restaurant, retail sales and meeting and event facilities.
To handle the issue of culls and other less visually attractive fruit, as well as to create yet another piece of the diversification puzzle, the Belisles designed and built Washington’s first “Farm to Glass” distillery offering vodka, gin, brandy and liqueurs distilled from the farm’s excess production.
Today, the Belisles’ attention to marketing has made BelleWood Acres a household name and a “must-visit” destination to customers throughout much of Northwest Washington.
Diversification as a ‘sales’ strategy
Diversification can be an important strategy as a farm seeks to be competitive and more profitable but, Berry said, growers need to think things through as they look in new directions. “Think about the risk of owning this enterprise,” he said. “Will you be getting a return in dollars, quality of life or some other benefit that meets your and your family’s needs? Does this new thing offer more than what you are currently doing? If not, why aren’t you simply doing more of what is working instead of trying something new?”
The issue Berry pointed to is the fact that diversification is not achieved effortlessly; considerable time and effort go into successfully implementing a plan for diversification. BelleWood Acres is a year-round enterprise requiring year-round marketing and attention to detail. A profitable, stable and diversified agricultural enterprise seldom allows for just “throwing a few apples on a truck then going to Hawaii for the rest of the year!”
Primarily, Berry noted, any decision about new marketing strategies needs to be driven by the question, “Do you, or another key person in your business, have the time, skill and interest to learn about and then manage this potential new thing?”
Sales/marketing tactics that work
According to Berry, a grower looking to bring about change will find it helpful to do some thinking about the question, “What is my brand?”
To develop a brand, “Tell the story of you, your team, your family, your farm. This is one attribute of family farm marketing that no one else can utilize. The average consumer is generations removed from living on a farm. Even in farm communities virtually no one lives on a farm.
“The average consumer is also generally very concerned about the intimate act of feeding themselves and those they care for. This is something we can leverage to illustrate how much ‘value’ we offer. We are seen as the food and farm experts. People are eager to learn from us.”
Next, Berry said, “Stay ahead of the market. Our niche is our uniqueness. Observe what people are doing and how they are making purchases.” Marketing is a lifelong learning process, he said.
Relationship building is also important. “Always under-promise and over-deliver,” he said. “And don’t ever be the source of friction, embarrassment, or litigation with a buyer/customer.”
Last, Berry said, hire, train and advance as many excellent employees as you can find. It’s much easier to lose a customer than to gain one. “Remember,” he said. “Your employees are the public face of your business.”
Every farm is different, facing unique opportunities and challenges. Those opportunities and challenges can best be met, according to experts like Berry, by developing a marketing plan based on the simple question, “How can I best ‘delight’ rather than simply ‘satisfy’ my customer?”