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Generating Sales With Retail & Wholesale Tactics
569 Plays3 years ago
In this episode of the Direct Farm Podcast, Joe Schirmer of Dirty Girl Produce returns to talk about Farm sales and the key benefits that direct-to-consumer and wholesale channels have impacted his Farm business. Dirty Girl Produce is a 40-acre Certified Organic family Farm located in Santa Cruz County, CA. They specialize in growing over 20+ varieties of fruits and vegetables and sell to both retail customers and wholesale channels.
dirtygirlproduce.com
barn2door.com/resources
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Transcript
Introduction to Direct Farm Podcast
00:00:03
Speaker
Welcome to the Direct Farm podcast, the go-to resource for farms across the US looking to grow and manage their business. Tune in weekly to hear tips and tactics from our most successful farmers on how to increase sales, access more customers, and save time and money. We'll also speak with industry experts, business leaders, and partners to share the latest farm business trends selling direct to market.
00:00:27
Speaker
Welcome to
Meet Joe Shermer and Dirty Girl Produce
00:00:28
Speaker
the direct farm podcast. I'm Rory, your host for today's episode. We've got a great conversation for you today with a member of our farm advisor network, Joe Shermer of dirty girl produce located in Santa Cruz, California. Welcome, Joe. It's been a little while since we've had you on the podcast. Yeah. Thanks Rory. Thanks for having me. Yeah. To maybe start out and give people a little bit of a refresher on the dirty girl produce. Could you just kind of tell us a little bit of the history behind your farm business?
00:00:55
Speaker
Sure. Yeah. We're in Santa Cruz County in Watsonville. And right now we are farming on 42 acres and we've been farming this operation since 96. So we've been doing it a while. We've moved around a bunch. We used to be in Santa Cruz on three acres and then came spread all throughout South County. We do a whole bunch of row crop veggies, strawberries, tomatoes, all kinds of broccoli.
00:01:20
Speaker
beans, all this sort of stuff would go year round. And of course, we were set up the structure of business. We have five farmers market here locally in Santa Cruz, also mainly in the East Bay, Berkeley and San Francisco. And then we have a lot of accounts and exposure up there, right? That we sell a lot too. So we do delivery runs and stuff like that. Yeah. And so
Pandemic Pivot: From Wholesale to Direct Sales
00:01:42
Speaker
you didn't really do a whole lot of direct to consumer sales until like 2020, right? Were you mostly just wholesale before that?
00:01:49
Speaker
No, we've all done farmer's markets. That's been our case. But then there's a lot of restaurants. There's also a lot of, you know, within San Francisco, there's a bunch of small businesses that either caterers or they have delivery business. A lot of people resell. There's some small grocery stores, stuff like that. And then we wholesale our tomatoes. Our tomatoes is our biggest single crop. And we have those in our dry farm tomatoes and those things we're wholesaling and moving. But most everything else is mostly we do mostly retail and say like wholesale slash restaurant price.
00:02:19
Speaker
Yeah. So you guys kind of did make that, that shift a lot more towards doing online direct to consumer sales. I know you've talked with us about that before, but do you want to kind of maybe hit on that and what that kind of change was like going from what you were doing before to that? Sure. I think our business over the last few years, you know, we're using QuickBooks online. We do the fairy plaza farmers market on Saturday in San Francisco. It's a very busy market. There's a lot of restaurants.
00:02:44
Speaker
We've been using like phones and iPads to write receipts on QuickBooks. So we did have some tech, but we needed to go more. And I really was actually in thinking that I wanted to go online more with sales and also with communication. But now everybody has an email and we all have G sheets and we share like our farmer's market list to everybody that's picking and selling and everything. So that, so we all share these sort of things. We didn't really have that.
00:03:12
Speaker
going into 2019 and I actually moved out of country for six months with my family, I was gonna work on that anyway. And that was December 2019. And then bam, pandemic hit 2020 and it just, you know, forced us to move quickly into this online platform.
The Rise of Farm Box Sales
00:03:33
Speaker
And we started immediately, what had happened is our farmers markets really,
00:03:39
Speaker
slowed down a bunch of maybe cut in half because of the pandemic, but kept going the whole time. But all of our restaurants, all of our wholesale, everything, that was all just zero. So we lost that huge amount. And this is coming March. We still have a lot of food at this time of year. So we just launched straight into this whole farm box program and delivery. And we were doing it with Instagram and Facebook and just piecing it together in the
00:04:01
Speaker
in that just frantic, crazy first couple of months of the pandemic. It was just really crazy. It was just wild. And then luckily I had already toured Barnadore. I'd also toured over the other platform. I was shopping around beforehand. So I knew when it was time, it was like, okay, boom, let's go to Barnadore. So we did it. And we changed that segment, which is probably like at that time of the year, it's probably 20 to 30% of all of our sales as restaurants, maybe more. And then the other 70% was cut in half because farmers cut in half.
00:04:30
Speaker
farmers markets cut in half. So at least 50% of our income was halted at that point. So we pushed on and we started doing home delivery, pickup sites. There's restaurants that were, you know, as soon as we started making a farm box and offering it for sale, either pickup or delivery, however we're going to do it, you know, our restaurant accounts, they were not doing anything because they were closed and a lot of people, they just stepped forward and said, Hey, I'm going to be a pickup site. Hey, I want to do this. I want to do that.
00:04:58
Speaker
So we had a lot of outreach and a lot of those pickup sites are still the same ones as we originally just jumped into in spring of 2020. So we really jumped on board with the whole full retail direct to consumer pickup sites and deliveries, you know, home delivery of retail. These are obviously not restaurant deliveries, which we would do in the past. And I probably went from like, I don't know, 95% retail business in the spring to summer of 2020.
00:05:28
Speaker
because restaurants had cut off. Now we're getting up to about 50-50, right? We've slowly trickled back about 50-50 full retail direct to consumer. And then now we do so much restaurant and wholesale.
Improving Cash Flow Through Online Sales
00:05:42
Speaker
And what's great about it is that beforehand, our accounts receivable was such a mess. A lot of times it's like almost like a shoebox full of receipts that at the end of the year I start
00:05:56
Speaker
calling people up and say, hey, can you pay me? It was pretty hard for us to maintain because we got so drowned. So what happened is when all the restaurants and wholesale left, we had barn to door wholesale page set up. And as they came back, I could say, Hey, look online, you pay when you check out. And that was a huge cash. And as they came in, you know, I might have like
00:06:21
Speaker
you know, 60 to $150,000 right now in accounts receivable, just because so many people would have been buying stuff from me and they've been waiting 30 days plus to pay me. So I'm seeing this year, especially as restaurants are really coming back. I'm really seeing that we're ahead in our operating capital just because we'd have such a huge accounts receivable account going on right now.
00:06:45
Speaker
No, that's really, I mean, and that's something I've heard from a few other farms that work with wholesale accounts or restaurants is that they can be really slow to pay. And so was that kind of one of your primary challenges with like, with how you were doing business before you kind of switched to Barnadore and selling online? Yeah, the problem with my business is that.
00:07:03
Speaker
It's small enough that I can't afford to have like a full-time like accountant or someone that is really like working in the administration. So like I have to do a lot of that stuff. And when I do find someone that can do some of that, it's usually they do part this part, you know, farmer's markets or other things. So it's hard to fit that role. So it's easy for me as the owner to fall behind on my administration and my accounting. So.
00:07:29
Speaker
That's one thing that has really helped me, especially because I've lost a few key employees that would help me out with administration and accounting during the pandemic because of the pandemic. And so it's been great as people have been coming in and basically restaurants reopening and getting to the point where they're not just open, but there's people
00:07:52
Speaker
coming in and they have a buying power because as they're coming in, it's sorted out more. So it's been really the time I've spent that I normally would be trying to track people down and get paid is me just helping people get online, figure out what we're doing, sign them up.
00:08:11
Speaker
help them until they understand what's going on. And then they come on, because it's new, you have to be, you know, receptive to, you know, I've been doing it a certain way with a lot of customers for a long time. And I'm the one that's changing, right? So I facilitate that, that transition of the customer way more than I'm dealing with accounts and aging. And so that's been really a really positive and time saving element of moving over online, like we've been doing, especially when we deal with wholesale. I say wholesale and restaurant,
00:08:40
Speaker
of restaurants I deal with, half the stuff they're buying, they're actually paying retail for it. If we don't have a lot of something, we pay retail. If we have a lot of something, then we break prices down. But a lot of times, I wouldn't say I'm just doing wholesale. Wholesale I tend to think is 50%. I'm getting 50% of the value of retail, roughly, and in a restaurant, I'm saying it probably averages 75%, because a lot of stuff that my restaurants
00:09:05
Speaker
are buying are things that I'm only going to grow a little bit and they're fairly expensive because they're hard to produce in that, along the quality. And so I just do a little bit. I know I can sell retail. So restaurant wholesale for me is a different world.
00:09:17
Speaker
Yeah, no, definitely. And I feel like I keep hearing more and more about like the being kind of choosy about what things you choose to grow for restaurants and, and being particular, even like following the trends around what restaurants
Balancing Delivery and Pickup Options
00:09:29
Speaker
want. So that that's awesome. But so you kind of touched on earlier that you were doing delivery and you have pickups. And I feel like most commonly, most people do prefer home delivery, they don't have to go anywhere, just
00:09:39
Speaker
shows up at their house, but you still have maintained this, the pickup option for the last couple of years. Why is that? Is it a popular option for you and your customers? I mean, we're riding the trend of the CSA or farm box. So there's obviously, as soon as the pandemic hit, there was this huge spike. We were putting all of our food into these farm boxes and we couldn't make enough farm boxes. We had jars of tomatoes. We had all these beets and onions and stored
00:10:07
Speaker
root crop things that people, we could not make enough boxes. We were just delivering constantly. And as a pandemic, as subsided, people are back going to stores and shopping at farmer's markets and stuff. And so we're kind of riding it out. And what we do is we do like a farm box, a small farm box and a salad box, which are kind of generic boxes. But we also sell, when it's strawberry season, we do half and whole flats of strawberries. And when in tomato season, we do five, 10 and 20 pound tomato boxes.
00:10:36
Speaker
So just having these pickup sites as placeholders for strawberry and tomato season really help out because it all balances out to have a delivery day for us. When we leave the farm, we're essentially leaving the farm on Tuesday and Thursday and we have a delivery route. And when our restaurants are back, which now maybe we get, you know, four to six restaurant deliveries that we're doing in the winter time, it might die down. There might be times where we only get one delivery and.
00:11:06
Speaker
Do we really run the truck 140 miles to get this one small delivery? You know, but what happens with the pickup sites is even on the days that there aren't very many at any given spot altogether, it makes it worthwhile. And adding on to that, the delivery to the restaurants is great. And it makes the whole day, you know, basically a dollar number that makes it viable for us to continue our Tuesday, Thursday delivery. Right. So.
00:11:35
Speaker
Really what we've done in the past is when we didn't have too much stuff, we just stopped doing deliveries on Tuesday or Thursday, or we'd only do it once a week. We were inconsistent enough that people weren't expecting it. And so now since it's a routine, we're actually, I find we're building that, that customer base through our delivery. Cause sometimes it takes people a while to really get, Oh, you have delivery. You know, cause we got people on Tuesday and Saturday at markets in the Bay area, restaurants that pick up, you know, all the time have for years.
00:12:05
Speaker
And, but, oh, we didn't have this, but if you want it, we can bring it on Tuesday. Oh, you deliver. Okay. Or Thursday. So it all really is feeding off itself right now. So even when we have pickup sites for some neighborhoods, like in San Francisco, I'm sure if we were doing home delivery right now, which we're not, we would get.
00:12:24
Speaker
A lot more interest, but for us, it's too far away. It's too technical right now to do that. So we're just holding on to these pickup sites and people, a lot of the people that are doing it have been doing it like all through the pandemic, you know, and some people come and go, but a lot of people, I mean, San Francisco is kind of a walking city. So people tend to like doing it and there's a few restaurants for one, you got to go to a 16 pizzeria.
00:12:50
Speaker
Get pizza at same time or get some take out or whatever go down in San Francisco mission. So there's other benefits for people wanting to pick up, but we do offer delivery through. Other delivery services. So, if anybody ever needs a delivery, that's still an option. We're just not doing it.
00:13:06
Speaker
Yeah. Have you seen like, cause I feel like sometimes a pickup can kind of be like almost a gateway into other into like delivery. Have you seen customers kind of, they maybe sign up and do pickups or they're buying stuff from you at the market. And then that kind of translates into a home delivery customer. Yeah. So we have two mailing lists, right? So we do retail and then we do wholesale, which is wholesale restaurant, right? We get two different newsletters for MailChimp to each of these groups. And
00:13:37
Speaker
A lot of times they over that because there are a lot of chefs that just chop the market for themselves. You know, vice versa, regular customers that are shopping that, you know, then buy at work. So what we do is when we get emails, we get alert people of all these changes. So just having that accumulated email list or when we do say, Hey, we're going to launch our Saturday or Tuesday or Thursday home delivery, a farm box retail.
00:14:06
Speaker
to San Francisco and the South Bay or something like that. Then we already have these two lists to go off it and announce that with a little link on there to say, buy that shop now buy this. So I think accumulating the mail mailing list is huge. If, and when we do these pivots and we're all, I feel like we're constantly evolving and changing. We're always pivoting to a new angle. I have one company, Frog Hollow Farms in Brentwood.
00:14:30
Speaker
They're buying, you know, a pallet of tomatoes and they're shipping them in small boxes all throughout the US. It's something that I tried to do. I don't want to do. It's too complicated. They do this. And so I'm sharing that link with whoever emails me, texts me.
00:14:44
Speaker
I put it in the mail and say, Hey, check into frog hollow. Here's the link to buy our tomatoes. If you want them in New Jersey and you want to get five pounds. So it's nice to be able to pivot and be able to reach people through our email, you know, when we need to, cause I'm sending that out weekly and alerting people. Okay. It's tomato season, strawberry season, you know, pretty soon strawberry season's going to be over. Then tomato season's going to be over. We're getting back to farm boxes and we're going to be trying to drive
00:15:12
Speaker
farm box retail subscription, you know, and that's going to be what we're going to be trying to do. And as well as we'll be trying to drive sales on our restaurant slash wholesale email as well, telling them, Hey, we have a lot of this. We have a lot of that. We got a lot of jars of tomatoes, giving you a deal right here. If you buy now, sort of things. So, so it's really nice to have be able to reach that part of
00:15:39
Speaker
our market. So a lot of our customers we have contact with or a way to get rich of them, but we slowly over time are accumulating that. And I think that just takes time to build that email list, right? Yeah. So I was kind of curious, and I know a lot of farms when they're starting out, a pickup option is more appealing because they're not ready. They're not sure if they're ready to go full blown home delivery yet. So they might start with a pickup option. How did you decide where to offer your pickups?
00:16:07
Speaker
That's good. I think it starts, we have five farmers markets. So each of those farmers markets is a pickup, right? And then really what we did is we kind of whittled it down from the first little pulse in the pandemic in 2020. We said, hey, we're going to do a home delivery, right? And so we started with home delivery, and then we quit, we're going to do Monday home delivery. We couldn't, with two guards, we could not deliver them all.
00:16:35
Speaker
on Monday. So it's over in the Tuesday. And then we're going to do Thursday. That's built over to Friday. But then as it all kind of started shrinking back down, people did step forward. And it's just kind of a thing that people have expected with these farm box, USA things is that there's a pickup site. And so people really approached me first to say, can I be a pickup site? So, so we did that and people would pick up. And if people stopped picking up there, we'd stop using that host.
00:17:06
Speaker
And we did that on about probably five, five hosts. And then, you know, we use like my house, which is easy because I don't care if one person comes or six people come. It doesn't matter. I can still use that as an option. And of course on farm, we have two days a week where people can pick up on farm, which isn't a big one. It's mostly a restaurant kind of pickup, but we just kind of naturally evolved. And then we just kept the ones and I tried to put it like, say, you know, if you're in Santa Cruz and you go up into San Francisco.
00:17:36
Speaker
Over to the east bay Berkeley and drop back down there's a big loop and that's kind of like our delivery route, so I tried to plant like okay on Tuesday here's one here one here. And then on Thursday one here and one there you know so there's on both Tuesday and Thursday pickup site there's actually two in San Francisco. On Tuesday and Thursdays different sites on different days and then two in the east bay on Tuesdays and Thursdays, so it kind of equals out there all different so depending on.
00:18:05
Speaker
you know, what area East Bay is very big. San Francisco is very big as well. So it's kind of tried to split it up. So at least there'd be one day, one time a week where people could pick up that was reasonably close to them. And then the ones that people kept ordering for, we just kept those and it just kind of evolved. And of course, you know, like Pizzeria Delfina is a restaurant that's next to Delfina and they have like four or five pizzerias through the Bay area and Craig.
00:18:32
Speaker
the owner I've known since I've been farming. So I've known him probably 20, 25 years or something like that. Also a 16, you know, long standing relationship with them. And so a lot of these sites I have deeper connections to. And so that has a lot to do with it because I've had some people say, I want to do it. And they start doing it and they realize like, Hey, this didn't draw enough business to them or whatever they were trying to get out of it. And then they stop. If you don't totally know the person's intention or if
00:19:01
Speaker
businesses change over time anyway, and it can be a hassle. And it's really like, I try to kick down some tomatoes or whatever, whenever I can to this place. Cause they're just basically just hosting for us for free because they want to. And so sometimes that's not going to work. I don't expect every restaurant to be able to pull that off. It's got to have some sort of a meaning or some kind of use for, you know, some of them it's like they're getting a delivery anyway. So it works out. Cause we're bringing a farm box picker on the same day, but really it just
00:19:31
Speaker
It evolves and it's really kind of random. And then you just see what works and try a bunch of things and see what works and keep those. That's kind of how we've evolved it. Yeah. And I love that idea too. Like restaurants that you have long standing relationships with, or even for folks that have a friend that has a business in town or something, a coffee shop, it could be anything really, I think, but being able to kind of utilize those connections and use spots like that as pickup locations, if they're in a good spot for customers to get
Handling Customer Requests for Pickup Locations
00:19:59
Speaker
I was also curious that I know a lot of times I think sometimes people can get stuck, especially if they're in the early stages of business where you're kind of willing to chase after a customer. And they'll almost like a lot of farmers will go with or try to pursue or meet any requests that somebody asks. And I'm sure people will always ask about like, Oh, can you make this a pickup location? Or can you go here? What is your response to that? Or what would maybe be your advice to that when people
00:20:24
Speaker
ask to, to go somewhere that you aren't currently offering fulfillment to or aren't doing a pickup location at that somebody, maybe one customer is reaching out asking about. Yeah, that's a really good question. I think that it's always beneficial to have an open ear and listen to suggestions from all your customers, especially when they're big customers like restaurants or wholesale or whatever. Listen to them, but make sure that don't just don't go so far out of your way.
00:20:53
Speaker
that it helps some, another business and not necessarily yours. Some things you really have to check and say like, is this serving me or not? And there's a huge difference between, I mean, I want to say almost like with restaurants, when you seed money, when you could build seed money coming from a new business. And so if you're trying to build your business, you're in a different position, you know, maybe you do want to go out of your way.
00:21:20
Speaker
to stretch that long day and do that extra delivery because you're trying to push and see what you can do and what you should and shouldn't do. It's not necessarily your set plan, but I think over time you want to make sure that whatever strategy for sales and fulfillment
00:21:38
Speaker
you're pursuing, it's going to work for the farm and not against you because I've just known that we've had a lot of delivery sites here in Santa Cruz and the mountains that, you know, my driver said, Hey, this road's too sketchy. It's way too far away. He's got a $25 order and it's taken me 45 minutes round trip to get there. There's a lot of things that you just have to consider and make sure that it's serving you, make sure it's serving your farm. And I think that's key to it.
00:22:06
Speaker
Especially if, if you're dealing with restaurants, I think there's some pitfalls that we all get into with restaurants. And I would say as well as retail customers and home delivery, if you get into the option, put the delivery details in the notes. And that can mean to some people, okay, I want you to go to my aunt Martha's house, knock on the door three times. And then when her cat comes here and goes over there, then put it over the fence and go over there. And then if she's not there, then take it down.
00:22:36
Speaker
Oh, you have to kind of draw the line in as well with a restaurant. One thing that we've really done that's posting our live inventory has helped is a lot of times when we open up our ordering to, you can text me, you can email me, you can call me, or I can run into you on the street or the farmer's market. And you can tell me, Hey, send me a box of tomatoes next Thursday. What happens is it opens up into things like, Hey,
00:23:05
Speaker
We're out of cannellini beans right now. And I don't need to explain it. I can, there's no cannellinis for sale, so you can't buy them. I don't need to say, Hey, I want cannellinis, cranberry beans. I want tomatoes. I want radishes. And I have to go back and say, Hey, are we going to have radishes? Like we preset what we have when it's there, you buy it. And if they say, Hey, I want.
00:23:26
Speaker
Um, chipolini onions, no bigger than a 50 cent piece or something like that. And then all of a sudden we're tasked with sizing and sizing, even though it can be so awesome and people will love it. And I think for some businesses, it's probably worth sizing. You know, I mean, we're talking baby carrots, beets, everything. If you get into sizing and if you basically indicated that you're open to sizing.
00:23:55
Speaker
you get it on every order or you're going to get it on so many orders. I really like posting. And now when people try to say, Hey, I need this, I say like, Hey, I don't know the size that's going to come out. We're going to have what we're going to have. And this is how we're posting it because some things, especially as the orders pick up and we have like 10 restaurants, 20 restaurant pickups on a Saturday, I can, my crew doesn't have the time to do everything and they're not going to go through and pull apart all these budgets to,
00:24:24
Speaker
make all these perfect little things. So in a lot of ways, it, it puts a fence up there and help you draw a line of what you can and can't do. And I think it's good to push it and try to be that person, that business that can do stuff for customers, but then also just realize when it's too much, like I said, when you can feel this is not serving me, this is extra work and I can just sell it this way anyway.
00:24:50
Speaker
So yeah, I think that's really helped me, you know, get rid of sizing and unduly complicated delivery and harvesting instructions. Right. And also the time, you know, your tech messaging with someone an order, they text you. Okay. Then I go to the field and I confirm. He texts me. Then I text back, say this, but not this. They text me and each one of those texts, you get it in the middle of the field. I'm not necessarily down.
00:25:19
Speaker
at my designated time in the office to look at, analyze these orders and figure out what's going on. All of a sudden you missed your order deadline or it's too late or whatever. So it's really the amount of energy it takes to be doing that. You just, eventually there's going to be too many orders. And unless you're someone that just walks around all day long with a cell phone answering people for orders, it's so much easier to get a real schedule down online where you can post what you have and they can buy it.
00:25:48
Speaker
Yeah, no, definitely just having kind of those barriers or like the barrier of the online store is really nice for that. And then, yeah, I love what you're saying about if you give them the room and they'll take it to start doing those kinds of modifications and specifications and things like that. And so keeping that to a minimum definitely saves the farmer a lot of time.
00:26:07
Speaker
I was curious about, I know you mentioned your first pickup locations were your farmer's markets. I was wondering, is that ever kind of a selling point to folks that are buying from you to the farmer's market? Like, Hey, if you want to guarantee to get something at the farmer's market, like order it online ahead of time and we'll have it here for you. Yeah, it is, but we, we limit it, you know, so essentially like our two pages that we offer a retail page and a wholesale page.
00:26:35
Speaker
The wholesale page for people that sign up has lists every item that we're going to sell or at least that we sell. We have enough of to post online. Now, usually we'll have more at the farmer's market, but sometime we'll sell out before we get to the farmer's market. Right. So a restaurant online.
00:26:52
Speaker
And they can order by the item, right? The retail page, you can buy generic, like a generic farm box, a salad box, a small farm box, but we also offer strawberries and tomatoes in different increments. You can buy half that or whole lot of strawberries. For example, this time of year, especially we run out of strawberries at the market. And so whenever it runs out and someone.
00:27:16
Speaker
shows up, hey, do you have any strawberries? Like, hey, no, but you can get a half flat. You just got to preorder online and you give them a little QR code and it gets them to sign up. And so the retail, you know, you're not able to be a retail customer, a regular farmers market customer, go online and buy whatever you want.
00:27:34
Speaker
six of these two of these one of those maybe in the future we would do that but that's really time consuming at the farm for us to make all those orders but there are certain things you know if you want tomatoes and or strawberries or a farm box you know we'll hold these for you we'll get them ready for you and we'll hold them so they can pre-order so that helps the customer do that
00:27:54
Speaker
And also gets them into our system with our emails or email lists and everything like that. So it is a winning thing, but it's like I said, we don't do it with everything for them. Often like we sell cases of jar tomatoes. We have strawberry jam, Christmas time comes around. They want to make sure that they have a full case of strawberry jam to give out stocking stuffers so they can pre-order a retail customer can pre-order those jars, you know, and that's really a lot of people because also we're going to.
00:28:24
Speaker
Bring our jars and we might sell out and someone comes in wants a certainness or they want the price baked on the jar on the full case so they can preorder. So there is a lot, we do have a lot of offerings because of that at farmer's markets for our retail regular farmer's market customers.
00:28:39
Speaker
Yeah. I like the way that you structure that too. Cause I feel like like the tomatoes or the strawberries are like kind of your specialty items or your high demand items. And so especially making those the ones that you can pre-order, I think is a great way to go about it. Cause then those are the items that people might come just to your stand to get. And if they can't get them, then that's a great plug for your online store. Yeah. We kind of have two businesses. One is our regular dirty girl produce where we grow like maybe 70 different items.
00:29:09
Speaker
throughout the year. The other is tomato season. When it's tomato season, we have a whole nother crowd, a whole nother distribution, a whole nother people come. They ask year round when our tomatoes start. So it's nice to be able to get those peeps and get them in our system and then try and sell them a farm box later. Because they do like to farm, they do like to support us, they know us.
00:29:29
Speaker
So they know that, you know, the quality of the produce that we grow. Um, and they may come for the tomatoes, but they stay for the small farm box delivered, or they get jars for Christmas or who knows what, but they see that we have the tomatoes will bring them in and then they'll see there's other options. There's other things we do when there's other days of the week at farmer's market. So you name it, you know, where else can we find dirty bill? Mm-hmm.
00:29:52
Speaker
Yeah, definitely. Well, I know we've talked a lot about kind of how you've gone about wholesale and it sounds like that business is really kind of made a comeback.
Building Relationships with Restaurants
00:30:00
Speaker
So that's great to hear. Cause I know I think the last time we talked, it was just at the start of restaurants starting to reopen and things like that. But I'm glad to hear that part of your business is really open back up again.
00:30:10
Speaker
What would be your advice maybe to farms? Cause I know wholesale accounts, a lot of times for farms is something they want to pursue, but they're not, maybe not sure how to go about that. What would be your advice to somebody that is trying to find more or start getting into those wholesale accounts, working with restaurants to sell them their produce or beets or anything? Yeah, sure. I think there's a few good strategies and it really depends on where you are, you know, how rural you are, how far away you are from the nearest biggest city or stringing together.
00:30:39
Speaker
delivery routes, every community is different. So with restaurants and wholesale as well, I feel like for us, it's easy because we have sold in San Francisco and it's such a big city. It's a big food city. So many restaurants are so many people that come there to eat, just to eat. So it's crazy. So we have a lot of support on those, but I think ultimately they know about us because we've proven ourselves at the farmer's market, a farmer's market for someone that's starting out.
00:31:07
Speaker
may not be the long-term business plan, right? And I see it with farms, but often way more with other like value-added businesses that sell at farmers markets. Farmers markets for them are like incubators. You start off with the sales that you get your crew going, you're producing something, and then you get the exposure because people are going to see you at the farmers market. They're going to see your product.
00:31:29
Speaker
You can meet them. You can talk to them. Restaurants come around. They're looking at, hey, what's this? I like that. All of a sudden you start building your relationship. So I feel like that is, farmer's markets are a really good way. It gets you exposed. It puts your product out there and then you can build from there. Another way to do it is just to straight up go out to dinner or lunch or breakfast or wherever you go and pursue these places. Look up where all these places are and go just knock on the door, give them a business card there.
00:31:57
Speaker
I know if you eat somewhere for people that really care about what they're doing in restaurants, a lot of the chefs that I deal with their artists, this is their life's passion. They love talking about food. They appreciate and makes them feel good when people appreciate their food. So being able to spend some money and going out to a restaurant, I think you don't have to spend all the money. You don't have to go.
00:32:23
Speaker
big or anything, but you poke around and have a cocktail or figure out a way to get yourself in the restaurant and talking to the people and give them a business card, QR code, get an email, get some sort of contact. These days communicating with people really varies in technology. Being a farmer, farms tend to be a lot that I know at least of smaller farms behind in technology compared to
00:32:50
Speaker
all the other businesses compared to restaurants. So you go to restaurants now, a lot of them now, there's just a QR code. You look the menu up on your phone. That's still in. And so being able to adapt and being able to, you know, what do you got to send someone an email? Maybe you have to send them a text. Maybe you send them a business card and they're going to call you on the phone and do this. So there's a whole wide range of different
00:33:14
Speaker
businesses and how they're run. A lot of restaurants are small businesses. Some are huge venture capitalists funded businesses as well. And a lot of wholesale accounts are huge and they're huge corporations. So each one of those, you need to have a different game plan in dealing with them. But I think really pursuing that, I think farmers markets are great incubators. Even if they don't end up being your long-term goal, that they'll put your name and your product out there. I suppose
00:33:44
Speaker
that you could just start throwing out Google ads in your neighborhood and getting a lot of people from online, just starting out online. But I think it's really a combination between like approaching brick and mortar, selling at farmer's markets, fliering. There's a lot of people that go to their church groups, right? There's a lot of organizations, youth sports groups, sponsor team. I mean, there's all these kinds of things that where people promote themselves in their community.
00:34:13
Speaker
So that try to get their, their name out. So yeah, I think there's a lot, but there's also the online portion. I'm sure some people could do it and really be successful in just starting out a farm online. I don't know anybody who's ever done it because we've just now arrived. Right. At that point. But I find that I have a lot more directed targeting at people that have either already bought our produce or found us, um, on their own. I feel like is where I try to really market and grow.
00:34:40
Speaker
So for someone just starting out, you just cast the net really wide, as wide as you can and see what works and then drop. If it's not working, drop it and just go for the revenue streams that are working, you know, that seem to be working.
00:34:54
Speaker
Yeah. I was curious too. Like, is there anything that if somebody, if a restaurant reaches out to you or just somebody you're thinking about maybe trying to start working with, is there anything that you ever noticed about a restaurant business or a wholesale account that causes you to be like, actually, no, we're not like that you avoid. Are there any flags or things like that? Or maybe something you look for in a restaurant that makes it a better partner for you and dirty girl produce. Yeah. I'll tell you one thing that like vetting restaurants.
00:35:24
Speaker
in the old like pre-pandemic dirty girl produce is pretty much getting to know the buyers who sometimes are the shops. Sometimes they're foragers. Sometimes they're a friend of the house. Sometimes they're the owners. You never know. You have to slowly build relationships and figure out, you know, if you're going to hand someone off $250 worth of produce and they're just going to sign their name on a piece of paper, you want to know that they're going to pay you because I've not been paid a lot. There have been a lot of, uh,
00:35:54
Speaker
Uh, businesses that I've dealt with that have gone bankrupt and have not paid me, you know, most of the time people are really good at paying by far and wide, but if you're going to have a lot of accounts and you're going to have a lot of money in aging, you're going to have to expect that some of that is eventually not going to come back to you. And so one thing that's really nice in that betting process and building a relationship with the restaurant is if you do have this online platform where they're paying upfront.
00:36:23
Speaker
Then they already paid for the produce. So you don't necessarily need to build that relationship as much. Maybe that's a starting point. And during the deliveries and emails and to, Hey, I like this. I didn't like this. Whatever you get feedback from customers. Then you start building that way, which is different than when what we used to do. Like we weren't necessarily going to let people sign and walk away if we didn't know them. But also we probably let way too many people sign and have way too much money outstanding. And then that's money.
00:36:53
Speaker
I'm paying interest on my credit line instead of it coming into the bank and paying off. So it costs money to do that. So there are a lot of red flags in dealing with restaurants and wholesalers. I'll tell you wholesalers, I love them. I love y'all, but it's a shirky, shirky place. Okay. Like, like people are, look, buy low, sell high. People are trying to make money. And so you have
00:37:17
Speaker
My main wholesale right now is through Fruit World. And it's my friend, Cindy, that I've known for 25 years. She's a really good friend of mine. If she wasn't selling my produce, she's still my friend. So I really trust her and we have a really good working relationship as well. Building those relationships with wholesale, it works, but you gotta be tough. You gotta be gritty. You gotta get paid. You gotta stick up for yourself. With restaurants, I'd say the same. I think sometimes people, especially when you're on a farm all day,
00:37:46
Speaker
You can easily get taken with an invite to a restaurant. Oh, come on in, I'll pay. And it's like, oh my God, this is amazing. They're feeding us and this is taken care of. And so sometimes there's an emotional component to a restaurant account that can affect your rational thinking and you're looking after your business. You know, you want to say, well, I, I like this so much, or there's something else I'm getting out of this relationship with this restaurant that isn't like, you know, I need to look at the dollars and cents. It's worth delivering them. They're paying a fair price and so forth.
00:38:16
Speaker
And so you really need to evaluate and also like, you know, getting to know your customer a lot of times. I think that's what sustained me as a farmer over the years is that the customer appreciation, being able to meet your farmer and build those relationships and have people appreciate if it was just like disembodied, I never met the people in person. It's harder. You feel it less. So I think that there's an important value.
00:38:44
Speaker
that you get that's not monetary when it comes to building relationships. That's really important. And it's what feeds a lot of us. A lot of us are not making that much money. We're basically farming to be able to do it. And so these things, you know, our relationships and accounts are meaningful in other ways other than the money. And I think it's important to shape those as well as the financial gains. But also one thing you got to see, you got to be wary of.
00:39:08
Speaker
that I found a lot in a scene is the fact of seed money, which is when someone first starts a business or someone just gave them money or they have a lot of money or they have a different kind of money that you're used to. And cause a lot of times when people are going to start a business, they start with a huge budget. They've loaned, they borrowed money and they're spending and they want to get the best. And so they come to dirty girl cause they want our name on the menu and then they want our good produce on the plate. Right. And eventually.
00:39:38
Speaker
when the operating capital isn't alone, they've spent the loan or the credit line and they have to spend the money that they're buying produce with money that has actually receipts that are meals in the restaurant. They feel it different. Sometimes people take off and they're successful and they stay, they're new, they start with us and they keep us. But I've seen a lot of people coming, buying from us, buying hot, like large amounts. And then once they really feel that crunch feeling like,
00:40:08
Speaker
Hey, maybe I can't pay these prices or hey, maybe I can't buy this much produce or it changes. So really be wary of gains. I would say, especially be wary of that change. If you are a business that is going to give terms like 15, 30 days, you know, when someone's starting out new, I would be wary. It's risky, even though it's exciting. And I think it's good to be on the team that is going to be pumping money into PR.
00:40:36
Speaker
And outreach, you know, like a new business does a lot of that. So it's good to be on that team when they're doing it, because it's good for you as well. But I would be wary about loaning a lot of money out by giving people produce on terms when they aren't solid long-term customers. You know, I always call it seed money. Like you can feel the seed money and you can feel the seed money dry up when businesses change in how they're funding their operating capital. So it's almost like if you're an investor, which I'm not, I wish, but
00:41:05
Speaker
I'm not, but if you're going to invest in the stock market, you go research the businesses, right? You don't just gamble away at the, you know, numbers up and down and whatnot. And, you know, you want to really be a wise investor. And so your accounts are going to be generally, it's interesting with MailChimp because MailChimp will show you purchases that people made by clicking on MailChimp, right?
00:41:27
Speaker
So it'll say how many purchases happened from this MailChimp event on wholesale and how many on retail and the average purchase price. So our retail, the average retail is much less than the average wholesale. The average wholesale is much higher. So in a lot of ways it really behooves, I think a farm to put a little bit more energy into each one of those wholesale accounts just because they are going to potentially
00:41:56
Speaker
bring in more income. Now maybe retail is, you're getting fully paid and wholesale you're getting partial payment from 50 to like I said, 75 to a hundred percent to, you know, wholesale slash restaurants, restaurants sometimes are retail as well. So, but they're bigger. So these accounts, building restaurant accounts, just vet them clearly, but it really has helped me. I've seen a huge improvement, especially when people come in new and they come in hot. They just say, here's the link.
00:42:25
Speaker
to our store order before 10, the cutoff and you pay on checkout and that's what they do. And I think that really helps because then you buy as much as you want or as little as you want. Yeah. Yeah. It's kind of a nice way to have a little bit more protection against somebody that.
00:42:41
Speaker
might have a lot of money now, but in 30 days, they might not have so much money in the case of a starting restaurant or something like that. That's really good advice. So I was curious,
Future Plans: Purchasing Property for Headquarters
00:42:51
Speaker
Joe, just kind of as a final question, but what's kind of next on the radar for dirty girl produce? What do you got planned for the year ahead? What's next?
00:42:58
Speaker
Man, I'll tell you, I am just having a moment in Dirty Girl. I've been renting the whole time I've been farming since 1998. So, and I farmed on, I think over 15 parcels at this point. We are in a capital raising mode. We have a bridge loan proposal that I'm spreading to some of our restaurants and our restaurant groups, all our customers who we are close with, who have expressed interest. We're going to try and buy one of our properties.
00:43:28
Speaker
So I think mid-December to by the end of the year, I'm hoping to be close to buying one in particular. It's going to take a little while and it's really complicated, but it's really cool. And I'll still be a renter of farmland, but to have a headquarters where we can put equity in month to month, you know, paying a mortgage and building equity that way, instead of trying to save all the profits for my carrots in a bank account summary, that's pretty hard when you're a farmer, you know.
00:43:58
Speaker
So I'm really excited trying to buy property and building up the dirty girl headquarters, which is what I think we're going to be doing. So really excited on that. And other other than that, just, you know, sustainable Ags means that we do good enough this year in order to be able to do it next year. Right. And that's a huge task every year. So we're speaking right now in the middle of September.
00:44:23
Speaker
And it's just in the throws of the biggest part of our year. So every little detail, every little decision has a much larger potential benefit or consequence this time of year. So I think right now finishing this year and moving into land owning position is going to be great. And a lot of people that are farmers, you know, throughout other parts of the country, like buying a farm here is a million dollar proposition minimum. We can't get a $300,000.
00:44:51
Speaker
farmhouse with acreage those days are way over. So it's a big ask and I'm sure it's like that elsewhere as well. But there's still a lot of places that you take for granted that you can buy the farm or someone had a farm that you could inherit or buy from your family.
00:45:07
Speaker
Here it's kind of crazy expensive, but at the same time, it's an asset that I'm hoping to build equity. That's really exciting for you and for the farm and I'm sure for your family as well. So definitely best of luck with that. And I'll look forward to the next time we talk or next time we have you on the podcast, at least hopefully that'll be close to wrapped up.
00:45:26
Speaker
Cool thanks Rory. I want to extend my thanks for Joe for joining us on this week's podcast episode. Here at Barnadore we're humbled to support thousands of farms across the country including farms like Dirty Girl Produce. We're honored to get the opportunity to learn from our most successful farmers who share the tactics and resources and tools that they use to grow and manage their farm businesses.
00:45:47
Speaker
If you would like to connect with Joe and other farm advisors, attend Barn to Door Connect. You can register for weekly sessions at barn.org.com slash connect. For more information on Dirty Girl Produce, you can follow them on Instagram at Dirty Girl Produce. Thank you for tuning in. We'll see you next time.
00:46:06
Speaker
Thanks for tuning in. For more free farm resources, tips, and tactics that are most successful farms use to grow and manage their business, visit barnadore.com slash resources. Also don't forget to subscribe to the direct farm podcast to automatically download our weekly episodes. Thanks for listening and we'll see you next week.