Questions To Consider Before Introducing Value-Added Products
This blog is a republished post courtesy of KCard
The original post can be found here.
Business Development, Education
Did you know June is National Fruit and Vegetable Month? To celebrate, we wanted to provide some practical tips that are specific to produce farmers.
In order to diversify and increase profits, many farms are adding value-added products to their lists of offerings. For produce farmers, “value-added” refers to processing their fruits and vegetables into another product of higher value, such as jam, salsa, or pre-cut/ready-to-cook vegetables. While this can help bring extra revenue to the farm, it’s important to consider the extra time and money that will go into launching a new value-added product.
Start by considering these questions:
What product will you sell? Start by considering what value-added product you’d like to offer and understanding the process of making it. It may require a substantial educational investment (trainings, tours, etc.) that could last 6 months to a year. Research what additional ingredients you might need to purchase for the product and where you could get them. This will also help you understand the costs associated with making the product and what your potential profit might be. To better understand costs, check out our post on the hidden costs associated with value-added products HERE.
What regulations must be followed? After you’ve decided what value-added product you’re going to offer, you’ll need to research what regulations are associated with that product. Farmers who grow produce to be made into a value-added product to be sold at the farm, a farmer’s market, or a roadside stand are generally considered “homebased microprocessors,” which allows them to sell jams, pies, canned vegetables, salsa, etc. Certified microprocessors must attend a workshop through the University of Kentucky and submit recipes and labels for approval. Note that an additional commercial food manufacturing permit is required to sell at grocery stores, across state lines, or over the Internet. You can learn more HERE.
Who will buy the product? While there’s no way to predict exactly who will buy your value-added product, you can do some research to understand the demand for the product. Is this a product you can sell to existing customers, or will you need to carve out a different customer group niche? You can survey your existing customers, research competitors in your area who offer the product, and consider what distribution method you’ll need to use to reach your target customers. It’s also important to consider your location, especially if you want customers to travel to you to purchase the product at an on-farm store.
How will you market the product? You’ll need to consider how the addition of the value-added product will fit in with your current marketing plan and distribution methods. Will you promote the new product with a social media campaign, posts on your website, newsletters, etc? Will you sell at an on-farm store, farmer’s market, online, or some combination?
Adding value to your farm products can come with a lot of research and questions. Don’t hesitate to reach out to KCARD to help you navigate the questions and get answers from our many partners across the state. Contact us at (859) 550-3972 or kcard@kcard.info.
This blog is a republished post courtesy of KCard. The original post can be found here.