Learning how to give yourself a competitive edge in today’s marketplace is essential if you plan to stay in business for the long term.
Several marketing considerations need to be thought through before launching full speed into your greenhouse business. Bridget Behe from the Department of Horticulture at Michigan State University has rounded up nine key tips to help maximize the success of your operation in today’s bustling market.
1. Get the proper facilities.
One of the first things any grower should consider, Behe says, is whether or not you have the facilities and the expertise to jump into business.
“Ask yourself, ‘Am I going to be able to do this in a cost-effective manner that’s going to generate profit?’” she says.For example, while you may have ample greenhouse space, is it a “good fit” for the crop you want to grow? Also, make sure that all aspects of food safety are in place, as well as the logistics of transportation, and even short-term storage space, if you plan on storing your produce.
2 Know the local flavors.
Because of the surging popularity of locally grown produce, Behe stresses the importance of getting to know what consumers in your area like to eat.
“Think about some of the local flavors. What vegetables are a part of the local cuisine, and how might they be prepared?” she mentions.
Behe says it can be difficult to introduce an entirely new vegetable to the consumers’ palate, and, to that end, suggests producing different colors, sizes, shapes, or varieties of vegetables that are already in the marketplace. For example, colored carrots, eggplants, or tomatoes play on the novelty factor and set yourself apart from the competition.
3. Determine the best profit window.
By getting around to local farmers’ markets, grocery stores, or seeing what’s being offered through CSAs, you can get a close look at what’s being presented at what times, and make the decision to reach that window just a few weeks ahead of time, Behe says.
“That’s usually when people are primed to pay a little bit more. They get hungry for fresh produce just before it comes into season. That’s usually your best opportunity to have a potential for greatest profit,” she explains.
4. Fill in the gaps.
Behe says that some restaurants can be a prime market, and for that reason there’s a lot of competition. In order to set yourself apart, ask the restaurant if there’s anything they need that they’re not currently getting, and see if it’s possible to produce it. However, before you decide to plant these crops, she cautions that there may be a reason no one is growing it.
“There may be challenges in production and shipping. There could be a whole host of reasons why they can’t get that product at that time, but it’s certainly a great place to start,” she says.
5. Put your customers first.
Whether you’re working with restaurants or in retail, it’s very important to make sure your clients’ needs are being met and you can do it profitably.
“Restaurants are going through a labor crisis just like any other business. You have to think strategically about what you can do to save them some time. It’s not just about knowing a product is in demand, but it’s also knowing how big of a package they need, how to clean it, etc.” she explains. That being said, if you can’t take the step in a cost-effective manner, it may not be worth doing it.
The process is similar on the retail end. If the retailer is selling directly to the end user, consider how the retailer might merchandise that product. Perhaps you can design packaging that allows for a nice display to help stimulate sales.
“The things you can do to create value for the next step in the channel is really the best way to differentiate yourself when a lot of people are growing the same thing,” Behe says.
6. Know Your Demographics.
By using the free U.S. Census website American Fact Finder, you can look up zip codes and get demographic information such as the gender break down, household income, ethnic composition, and so on, that can help you determine the demand side of your business equation.
“Start to get a picture of who lives in your backyard, what he or she eats or would eat, and then what is available, what might be made available, and if you can do that at a profit,” Behe says. “This will help with product selection, package size, and some other marketing decisions.”
7. Offer consistent supply.
For large-scale operations, customers often do not want to deal with a lot of change. Be sure to ask yourself if you can supply product consistently in terms of quantity and quality, and be sure to properly size up your capacity for production.
If you have any concerns, Behe suggests potentially pairing up with another grower ally who could help carry some of the production weight.
“Together you may be able to use the same production scheduling and produce a similar quantity and quality. For example, develop a partnership where you can do peppers, and [the other grower] can do tomatoes, then together you can have a consistent and substantial supply,” she says.
8. Follow through with customers.
Another key practice is to get valuable feedback about your products. If you’re going through a wholesaler or a broker, ask them what they’re seeing in terms of regional food trends or national food trends.
“As the product flows from the grower to the end user, you’ve got to remember to get that information. For example, how are things selling? How are things tasting? How was the quality upon receipt?” she says. That information is invaluable for future planning.
9. Fail safely.
Lastly, Behe says that “failing in a safe way” is perfectly fine and, in fact, a good way to get to know what works and what doesn’t for your business.
“I think businesses should always have some ‘play money,’” she says. “Continue to do experiments and try different things to see what your next step is. Not every experiment needs to be successful. Give yourself space and time to try things; what you might try next may be the next profitable crop.”