Choose A Market Most Responsive to Your Mission

Consumers of locally produced products can be found in two distinct categories – Direct to Consumer & Business to Business. Each of these categories has multiple channels and their own consumer preferences & characteristics.

Small farm business owners must carefully consider their target channel, scale of operation, profitability needs, and distribution needs when deciding whether to work directly with consumers or resellers and distributors, or a combination of both.

Many small producers may find that multiple channel customers give them greater flexibility for selling various grades and/or ripeness levels of product. For example, one can sell less ripe fruit through wholesale channels and the ripest at farmers markets. Additionally, a good portion of small farmers start sales at farmers markets where they build brand loyalty, customer relationships, and gain exposure to develop relationships with wholesale buyers from restaurants, grocery stores, and more.

Direct-to-Consumer

Farmers Market:

Farmers Markets are a popular choice, where local producers gather to sell their products directly to consumers. These markets provide a great opportunity for farmers to interact with customers, showcase their products, and build relationships within the community. It's a chance for farmers to share their stories, educate consumers about their practices, and offer fresh, high-quality products. By participating in Farmers Markets, farmers can increase their visibility, gain valuable feedback, and establish a loyal customer base.

On-Farm Sales:

On-Farm Sales are another option for small farmers looking to sell their products directly to the public. By setting up a farm stand or establishing regular farm tours, farmers can invite customers to visit their operation, see how their food is grown, and purchase items on-site. This direct-to-consumer approach allows farmers to control their pricing, showcase the freshness of their products, and create a unique experience for customers. On-Farm Sales not only provide an additional revenue stream for farmers but also foster a deeper connection between producers and consumers, leading to increased customer loyalty and support.

Online Store:

In today's digital age, having an Online Store is essential for small farms looking to reach a wider audience and increase sales. An online presence allows farmers to showcase their products, provide convenient ordering options, and reach customers who may not have access to local markets. Through an online store, farmers can expand their customer base beyond their immediate community, ship products directly to consumers, and stay competitive in the market. By leveraging e-commerce platforms and social media channels, small farms can effectively promote their products, engage with customers, and grow their online sales presence.

Community Supported Agriculture (CSA):

Community Supported Agriculture is a unique model where consumers buy shares of a farm's harvest in advance, providing farmers with much-needed financial support at the beginning of the growing season. In return, shareholders receive a regular supply of fresh produce throughout the farming season. This direct relationship between farmers and consumers fosters a sense of community and allows consumers to have a closer connection to where their food comes from. CSA shares typically include a variety of fruits, vegetables, herbs, and sometimes other farm products like eggs or dairy.

Business-to-Business

Resellers/Retailers:

A reseller is a company or individual that purchases products from a producer or distributor and then sells them to end consumers. Resellers typically focus on selling products direct to consumers through various channels, such as online platforms or brick-and-mortar stores. They often have a smaller scale of operation compared to distributors and may offer a more personalized touch to their customers. They purchase in smaller bulk wholesale quantities and set a retail price. For example, to reach a wider audience a small farm may choose to work with resellers like florists, restaurants, grocery stores, or butcher shops who specialize in locally grown produce.

Distributors:

A distributor is a company that buys products in larger bulk quantiles from farmers and sells them to resellers/retailers or other businesses. Distributors act as middlemen in the supply chain, helping to streamline the distribution process and reach a larger market. They often have established networks and logistics in place to efficiently deliver products to various retail outlets. For instance, a distributor may aggregate multiple small farms statewide to source a diverse range of agricultural products and distribute them across the state to chain grocery stores, restaurants, hotels, or other food service providers.

Local Food Hubs:

As demand rises for locally produced goods, so has the demand for more local food hubs. Most local food hubs have a reseller and distributor model (a middleman). They could be a physical space or an online space. Some of them are Cooperatives. Their main concern is connecting the dots between producers and consumers locally and regionally. Many producers find it difficult to gain entry into the business-to-business market. Usually because of the unfamiliarity of marketing and supplying such a market when initially the farmer was direct-to-consumer selling. Many farmers have the ability to produce in larger quantities to support greater demand but are not set up to handle multiple large orders nor have the logistics for distributing these orders far away.

According to the USDA’s Regional Food Hub Resource Guide, a food hub is a “business or organization that actively manages the aggregation, distribution, and marketing of course-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand.”

The Tompkins County Cooperative Extension created the Guide to Marketing Channel Selection: How to Sell Through Wholesale & Direct to Marketing Channels. It is a great resource evaluating market channels to gain a better understanding of the risks, labor, prices, and more.

Deeper Dive Resources:

ATTRA Sustainable Agriculture, Selling to Local And Regional Markets: https://attra.ncat.org/publication/selling-to-local-and-regional-markets-barriers-and-opportunities-for-beginning-farmers/

Sources:

Cooperative Extension Tom Hopkins, Guide to Marketing Channel Selection: How to Sell Through Wholesale & Direct to Marketing Channels, 2010.