Knowing your market or outlet, for the produce you will be growing and selling to, is as important as your growing facility. Who and where are your customers? Understanding your market points you in the right direction of narrowing down your greenhouse location. This is covered in our initial and the 3rd post, in this series. Highlights being market size, who the buyers are and planning for the future.
Let’s dive a bit deeper into why you need to understand your market. Again, “market” being the buyers and community your company will sell to and interact with. When starting a commercial greenhouse you need to grow a crop that will sell in the market. Find this out by answering:
- What do the consumers want/currently buying?
- What are the consumers not happy with from current suppliers?
- What trends are coming?
- Are there niches not being taken advantage of?
- Who are the consumers?
- Is there an area of concentration of consumers?
Research, research, research! The questions above can’t be assumptions or feelings if you want to really succeed. Find out what is happening in the real world, go to potential customers and talk with them. Go to grocery stores and ask the produce managers questions. What trends do they see? What product flies off the shelf? What do people ask for but don’t yet have in stock? Visit restaurants and strike up conversations with the chef’s. What do they like to cook with? Is it what they really want? Could it be better or different or from a closer supplier? If you are not good at this or are nervous and know you won’t go through with it find someone who you trust and have them do it. There is no Field of Dreams, people don’t show up out of the blue. You have to find them, know what they want and then they have to know you are there with a product they want.
Another great way to find customers, test the market and show them the quality they will be getting from you is to grow a small crop and take it to people and businesses you think will like it and let them try it. Tell them the only thing you want in return is their honest opinion. Don’t expect for them to come back to you readily offering their opinion and asking to buy product. Continue to talk with them over time. If they mention they don’t like, want, need etc. the product. Grow something different and try again. Even if that specific chef or person doesn’t want to do business with you, their insight is the second best thing you can get. Find out what their customers like as well, they are the real consumer.
This brings up another part of finding your market. Part of it is made up of who will buy but also how you want to sell. There are several different ways, each with different customers and different processes of getting the product to the consumer.
- Some restaurants buy from a wholesale company but many chefs pick and order produce from local growers when needed. This route may not be daily consistent but if you deliver on quality the chef will take notice and expand on what they buy from you. Typically you will be delivering small quantities to each location/restaurant 2-3 times a week.
- This is the factory grower’s ideal customer. The wholesaler will be looking for large quantities of a few varieties. They typically pick up from the greenhouse on a regular basis. Having one or few customers reduces headache on the distribution strategy. The downside of the wholesale buyers are, they are more price sensitive and losing a contract can be detrimental because they are responsible for a large percentage of your business.
- Farmers Markets
- Typically these are a weekend function but more are either expanding times to include the middle of the week or separate markets focus on the middle of the week. Farmers Markets are a great way to connect with your customers and talk about their likes and wants but also you can see what other growers are selling or not able to sell. This is a retail setting so your displays and signage will need to be well thought out and attractive. Watch people as they approach your space, see where there eyes move to and from. Use this to your advantage for product placement. Farmers markets are also the ideal place for a local grower because that is what the customers are looking for.
- As with each of these markets you will need to start by asking questions and doing research. This especially applies to schools. Each school district and many times each school has different procedures for buying produce for their cafeterias. Best way to find out is go and ask. Find out how they currently get produce, if they are wanting a local farm to school grower and what produce they use. Finally ask how you can become their vendor. Schools will be similar to wholesale as they will buy larger quantities at lower than retail or B2B prices, but once you have a contract it will be consistent.
- Retail at the greenhouse
- The toughest part of retailing from the greenhouse is getting the customers there. There is a built in draw because people like to see where the food comes from and you will get those that are interested in the process. Awareness and community involvement is huge and will be driven by your marketing. This doesn’t mean you have to only retail and be open all week. Often growers who retail at the greenhouse will be open a few days a week for just a few hours to be available to the interested people and try and move product that might not have been sold through other outlets.
- In short, Community Supported Agriculture or CSA’s are a form of contract growing with the benefit of having some leeway as a grower. You sell shares of your year or seasons harvest to individuals or families. They pay up front for the season and you give them produce once a week throughout the year or agreed upon season. Some staple produce maybe requested or expected each week but variety is also expected. It’s about offering what is in season for your location. Where this can be an advantage for greenhouse growers is you are able to grow year round and offer out-of-season produce when customers can’t get it otherwise.
*Or combinations of two or more on this list
Finding your market is done through a lot of research. The same goes for how you will go to market. You don’t have to stick to only one outlet or participate in all of them. Figure each out and pick the one(s) that you can see yourself enjoying. You can always shift or add different markets as you grow.
Staying on top of market trends - Through the process of finding your customers and offering a product you will see a snapshot of the current market. The market, customers and theirs wants/needs, continuously changes and evolves. It is important to be aware of how these changes affect your business and when to shift your business to match. An example of this could be made with the evolution from traditional farming to organic to now an emphasis on sustainable and locally grown. Many times your growing practices may not change but your message and marketing efforts will. Point being always keep an eye on what is happening with other growers and buyers. Movements creep up and can explode in popularity. The market never lies, it wants what it wants regardless of how you as a grower wants to function. You may not always want to follow the trends but if you do, you don’t want it to be too late because closer attention wasn’t paid.
When it comes to finding your market you will need to dive in and research all possibilities. Get out and talk to people who make decisions, goals being, getting customers, getting possible customers and getting a firm grasp on what the end user wants. This can’t be left to assumptions or feelings.