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Making Direct to Consumer Sales Work

By   /  October 26, 2015  /  Comments Off on Making Direct to Consumer Sales Work

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Gabe, Maisie and Molly Clark

Gabe, Maisie and Molly Clark

My family and I operate Cold Springs Ranch, a 100% grass fed beef operation in Maine. We purchased the farm ten years ago and have been growing steadily since then. We operate what we describe as a co-op system with three cow/calf farms that sell their calves to us. We raise the animals from 9-10 months of age until they are finished and we handle processing and marketing. We market around 140 animals every year and are targeting to expand to around 200 animals annually. We sell approximately 65% of our beef to retail stores, 10% to restaurants, 10% to schools, and 15% direct to consumers. We process beef 52 weeks a year and deliver fresh beef to our retail, restaurant, and school customers weekly. All direct sales are frozen.

Here are some of the keys to our success that might help you as well:

Competing Where I Can Win

My processing costs are over three times that of large beef production models so I don’t try to compete with them. Their market is built on high volume and low margins. This makes competing with it high risk unless you can make gigantic up front investments with a long-term payout. Instead, I focus on serving customers who value locally produced food.

I do believe there is a growing demand for locally produced premium product lines. If we as farmers and ranchers want to break out of our current production system and economic model we need to innovate in ways to meet customers’ demands.

Year-Round Beef

ordering-beefOur success in marketing our product is predicated on meeting the demands of our customer. I do this by providing a year round fresh supply of beef. This creates a more sustainable production system for our processors since they need to operate their plant and keep their employees year round. I believe it is a target that all producers should work towards. It is possible to produce quality grass fed beef year round. As much as fall is the traditional finishing time it does not seem to be our best beef for numerous reasons. Normally our best beef is produced in early spring and mid to late summer.

Distribution

You can’t be all things to all people without giving up something. We commonly turn down customers outside our delivery route. Although this means lower sales it means our sales are all done in a geography where we can ensure higher margins. Additionally, our delivery route is very efficient with limited time spent trying to service distant, small customers.

Investing in Marketing

As much as consumers eat up meeting and talking to real farmers and ranchers, that can only go so far. Professional assistance with marketing, web design, and other sales related outreach can provide significant pay back as production grows. Although our business size does not justify an employee for these roles we do contract out web site construction, distribution and other parts of our business. Doing it all ourselves is not an option.

Working With Others

ranch-history-fieldsThe system I hope to see more of is groups of producers working together to use each other’s strengths. For example, I work with a small group of cow/calf producers and together we operate on over 1,000 acres of good quality production ground, increasing the amount of product we can provide to our customers. The cow/calf producers want to produce a value added product but their focus in on their production system. The logistics of processing, marketing and working with customers is not what they prioritize in life. I, on the other hand, enjoy the more intensive management required for finishing year round, as well as the connections we make with customers through marketing. Thus, the cow/calf producers and I make a good team.

This type of production model will work better when a group of producers are all within 200-250 miles of each other, and have a processor who is closest to the finishing farm/ranch location. This is just one example of a team. You may have other ideas that fit with what you do best.

Value Yourself

Labor management and cost of labor is important to all of us. Your [own] labor is not free if you want to make a living. I can’t emphasize that enough. The less you value your labor the less you will be paid.

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About the author

Gabe Clark owns and operates Cold Spring Ranch in New Portland, Maine with his wife, Molly, and daughter, Maisie Wren. They are known for providing natural and healthy meat that is locally sourced, raised and finished. Gabe holds degrees in Agricultural Economics from the University of California, Berkeley, and a Masters in Animal Science from the University of Maine, Orono. Gabe is an active member of several boards and committees related to the agricultural communities of Maine and New England and is committed to supporting and expanding local agriculture.

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