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Marketing Channels
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In this episode, we explore the different marketing channels for horticulture products. We will get into some of the advantages and disadvantages of each channel, including direct sales, farmers' markets, online platforms, wholesalers and retailers. As well as share some tips and best practices on choosing the right market for your horticulture business and optimizing your sales and profits.
What to Think About Before You Plant
Center for Crop Diversification Marketing Resources
Questions/Comments/Feedback/Suggestions for Topics: hortculturepodcast@l.uky.edu
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Transcript
Introduction to Horticulture Podcast
00:00:01
Speaker
Welcome to Horticulture, where a group of extension professionals and plant people talk about the business, production, and joy of planting seeds and helping them grow. Join us as we explore the culture of horticulture.
00:00:14
Speaker
Hello
Meet the Team: The Lost Boys
00:00:15
Speaker
everybody. Alexis here with the, uh, with the lost boys as I'm now calling them because Brett will always wants to be a boy and I'm just calling them all the lost boys. But we hope you enjoyed our episode last week, uh, talking with Maddie from K card. And, you know, she talked a lot about how to, you know, how you don't need a business plan, come to K card. They can work on that. One of those things that they're going to work on with you is talking about your marketing
Reflecting on Business Plans and Marketing
00:00:40
Speaker
channels. And so we thought we might talk about them with you here today because we have,
00:00:44
Speaker
one of our expert lost boys, Brett, who loves to talk about marketing. So we're excited to be talking about that. I mean, it probably sounds that weird coming out of my mouth in the first place, but it really makes it sound weird. It's more like an accusation, right? It's like you're being called out, Brett. With P.O.I.S. So it's sort of like fun and stylish and modern. It's not like that.
The 'Lost Boys' and Pop Culture References
00:01:08
Speaker
It's just like the equivalent of saying like somebody's fat but with a pH. So it's boys with an with an IS. Yeah, fat boys. The many uses of the same word in different situations. I feel like that could be a whole topic. Maybe we should change the title to Alexis and the Lost Boys. Like I feel like it's like... Isn't the Lost Boys like a thing that happened in like the 80s or something?
00:01:35
Speaker
Right? The Lost Boys? Peter Pan. I know it's Peter Pan, but there's another thing. You're thinking of the vampire. Yeah, the vampire movie. I don't think that's the version maybe we're referencing or maybe we are. Maybe we like this show is eternal. I don't know. I
Marketing's Role in Horticulture
00:01:50
Speaker
don't know. I think it was the movie with Kiefer Sutherland. Yeah, there is the movie with Kiefer Sutherland. It may or may not be one of my favorite movies. I'm not going to divulge that on this episode of the podcast. I will not do that.
00:02:01
Speaker
All of our Gen Z's out there are now googling that movie. Yeah, they're like, what is this? There's three sequels. None of them are any good. I'll just tell you that now. If you're going to watch it, watch the OG original, folks. I will give that plug as we lead ourselves into this week's conversation, which is indeed.
00:02:19
Speaker
marketing and I think it's a great conversation to have as we've mentioned on other podcasts is that in horticulture as any endeavor in agriculture or horticulture marketing and production is very important but particularly in horticulture we're oftentimes producing a product but then we're tasked with also marketing it especially here in Kentucky with the way our marketing channels are set up and
Challenges in Choosing Market Channels
00:02:44
Speaker
the way that our infrastructure plays out here in Kentucky
00:02:48
Speaker
Direct marketing is a thing here, and it's oftentimes the case with a lot of the producers that I work with and probably some of you guys on the podcast today work with. So marketing, it's gonna be a great discussion because it touches a lot of us in horticulture. Is that a fair thing to say, you guys? If you're gonna grow it, you gotta sell it somehow, right?
00:03:08
Speaker
I know it's not going to sell itself. In most cases, it's not going to sell itself. I would say selection and identification with a particular market channel or channels is one of the most important but poorly understood decisions and considerations that people have to make early on when they're figuring out what they want to do. So yeah, I certainly think it's important. It seems like when you lead into this thing, I mean, there's any number of ways we can lead into this conversation.
00:03:38
Speaker
And when someone approaches me, like let's talk about on a county office level, when someone approaches me, usually I start asking questions of the scale of production, you know, and how long they've been producing. What are they producing? What are they specifically asking about? But also the scale that they're interested in.
00:03:57
Speaker
and just personally what they're interested in. You know, a lot of times people talk a lot about production very passionately and they have lots of questions on production. But sometimes when I start asking questions about marketing, they may or may not have thought as much about that, but then I kind of back up with them and say, well, listen, depending on what you're wanting to produce, how much you're wanting to produce, when that product's gonna come off, all of that, doesn't that impact marketing and their marketing efforts, you guys?
00:04:28
Speaker
Yes. In summary. End podcast.
Understanding Market Channels
00:04:33
Speaker
And we're done. I think one of the misconceptions or one of the faulty ways of thinking that sometimes is attracted to people is that if a market channel is easy to get into, they think that it's easy to do well or be successful in. And so like for instance,
00:04:53
Speaker
Signing up for your local farmers market they may be actually clamoring to have more vendors and so you're in you know you pay your whatever the fee is you show up and you're in. But to be successful at direct marketing requires a whole suite of skills and practices to establish your customers retain your customers engage them with.
00:05:13
Speaker
People think about social media, but it's a whole lot of other moving parts to that. And in some ways at that scale, the market channel management itself is kind of more complex than it is to sell pallets worth of tomatoes to a wholesaler.
00:05:30
Speaker
The difference being, of course, the price premium and stuff like that. But I do think, yeah, we think about the scale and the volume that people want to produce. Think about the price they want to sell it for. But also, I think it can be deceptive that the, quote unquote, easier to get into markets, the farmer's markets, the roadside stands, et cetera. They actually, they frequently have the highest level of complexity of the marketing portion of the operation. You're almost doing more marketing than you are production.
00:05:59
Speaker
Can I ask the dumb guy question here? When you talk about a marketing channel, is it essentially just where am I selling my stuff? Is that how you describe it? The path through which you're moving products from your farm,
00:06:19
Speaker
out into the world, whether that be, so examples of market channels would be things like a roadside stand, farmer's market, CSA, things in the additional, like you could do an on-farm
Production Scale and Market Impact
00:06:29
Speaker
retail and or you pick operation. You could do something like a produce auction. You could do something like local or larger wholesale distribution. These are all individual examples of retail. I mean, sorry, of market channels. You could do groceries, again, small or large, restaurants, direct to restaurant or through a distributor.
00:06:50
Speaker
selling to processors, these are all these different ways that you can get your product off your farm. It's a great, great clarification, Josh. And usually when someone approaches me, I kind of want to know in this case,
00:07:02
Speaker
even before I asked them about what marketing channels they're interested in. I want to know kind of how much space they have because we all know in horticulture, generally the intensity is greater, the intensity of production is greater, but so is the production on any given area of land. And even though you may produce
00:07:26
Speaker
very intensively on a quarter of an acre, you may never be big enough to hit certain markets, such as wholesale markets that, and I've worked with producers and they've had an acre of tomatoes. You know, and that's really a huge quantity of tomatoes, it truly is. But then when they approached like, you know, a distribution center, they approached specific, at the time it was years ago, grocery store chains,
00:07:52
Speaker
They said, well, that sounds awesome. You know, your production window is going to match with what we need. When can you deliver the first 5,000 boxes, 20 pound boxes of tomatoes? And it really hit that producer that, oh, I'm not producing maybe enough in this case for that particular wholesale
Balancing Direct and Wholesale Markets
00:08:07
Speaker
market. And they had no plans. They were landlocked. They had no more land. They were producing a lot of tomatoes, but they quickly realized that benched mark them where they were at in the production scheme because that
00:08:19
Speaker
Wholesale buyer for a grocery chain wanted thousands of boxes. And instead that producer was producing dozens and hundreds of boxes, not thousands of boxes. So sometimes just the setup of your operation will help you narrow down things. Sometimes it doesn't. Sometimes it will. It depends on your notion of growth and risk and the potential of each kind of. So some of these things, you know, decisions will kind of be made for you as far as guiding you to specific markets, maybe.
00:08:50
Speaker
And Brett, isn't it true that as you go up in volume, sometimes you go down in price as far as per unit of any given thing? In general, yes, I think there is a push and pull with volume and price. And so I think there is more to that and part of what you have to consider.
00:09:09
Speaker
again, is your time and involvement in the process. So it may be that you say, okay, I'm gonna sell 100 pounds of tomatoes at the farmer's market this weekend, or let's say 500 pounds of tomatoes at the market this weekend for $3 a pound. And then I consider expanding and I go and talk to a distributor and they say they'll give me 20 cents a pound.
00:09:35
Speaker
And I look at that and I think, how on earth does that make any sense at all? And it may not make sense. Ultimately, you may put pencil to paper and it may not. But part of the consideration is that if you're selling 500 pounds at the farmer's market, if you're able to produce it, you could be selling 15,000 pounds or more at that 20 cents per pound. And most critically, I think,
00:10:01
Speaker
In the case of the farmer's market, if you're doing a good job again, you're doing social media ahead of time, you're cultivating an email list, you're taking pictures, you're thinking about communication, you're going, you're harvesting, you're pulling everything together, you're putting it in the fridge or you're holding facility, whatever, you're loading it in the truck.
Time Investment in Direct Marketing
00:10:23
Speaker
chaotic Saturday morning and one of your kids is sick so you got to figure out childcare and so then you're driving the truck in, you're sitting at the booth or paying someone to sit at the booth for eight hours, then you didn't sell everything so you're gonna have to load that back into the truck and you're gonna drive that back to the farm and you're gonna have to unload it or figure out a place to deal with it or compost it or whatever.
00:10:45
Speaker
And then you've already got to be thinking about next week's harvest, next week's promotion, next week's social media. You got to make everything look glamorous. You got to do all of that. Okay. So you're doing that to sell 500 pounds of tomatoes at $3 a pound. Or you call up your distributor, you say, okay, we're ready for that. However many pallets of 20 pound boxes and yeah, you're getting 20 cents. They come or you take it to them, you drop it off, you go back to your farm and you're farming again.
00:11:12
Speaker
So the amount of time that you have spent in the marketing and delivery in those direct market channels is something that people sometimes lose track of. They lose track of the value and the expense of that, and they certainly don't account for that often in their cost accounting. So yes, that volume and price component does, there is a trade off there. And again, in some cases, many cases, if you don't have a bunch of people working for you, you don't have an established system efficiencies, et cetera,
00:11:42
Speaker
It may not make sense to sell prices, to sell products to those wholesale channels at those lower prices.
Personality and Marketing Fit
00:11:48
Speaker
However, don't forget to account for the costs associated with direct marketing. They can be considerable. I'll ask you this, Brad. I know you've done so much work in this area. From your experience, does the producer, the one that's growing it or the group of producers that are growing it, are they always the right people to do the marketing? I mean, how does that work? Yeah.
00:12:11
Speaker
I was just out in a county office given a talk about personal selling skills and one of the things that I talk about is to know thyself and to, if you hate interacting with people, you are probably not going to get good at interacting with people because you hate it so much. Whereas if you're not particularly good at it but you don't hate it,
00:12:37
Speaker
then you can get better. You can learn. There's ways to learn how to be better at selling, how to be better at interacting with people, how to be better at public speaking. But yes, I think a personality assessment, we covered it in the primer episode a little bit with those angles on enthusiasm and interest and all that kind of fun stuff that not everyone, people think, oh, it's easy to get into the farmer's market and I can, I don't have, there's no pressure for me to show up with a certain amount of products or a certain amount of whatever.
00:13:07
Speaker
okay, that's the right market channel for me. And then they forget the fact that they're a misanthrope who can't stand when people ask silly, what they think are silly questions or they can't stand it because the customer thinks they know more than me and they don't know more than me. And it's like, that's kind of part of the process is being able to talk to people, engage with them and do that. And they wonder whether they're miserable or not overly successful. And don't get me wrong, I'm not in any way dogging on
00:13:32
Speaker
farmers markets and direct markets. That's the majority of the people we work with work in those channels. It's just sometimes I wish people understood how much it's costing them to do that kind of stuff. Alexis, you do a mix of marketing channels with your cut flower stuff, some of it you're using for direct, some of it you're doing it for events or selling it second.
00:13:54
Speaker
Do you have any comments on the variability and how much time and energy and everything else you're having to spend in those channels and how that has value or doesn't? Yeah. So we did farmer's market for like a year and a day type of thing, like a season and a day. Ultimately, it didn't work for us because we also did events. And so events happen on Saturdays. And the key with farmer's market, I think, well, there's
00:14:21
Speaker
there's a central, several essential things, but one is that you have to be there every week. Uh, so if you are the type of person who, you know, maybe has a, you know, child's ball game and you're not yet at the point where you can pay somebody to go to the stall and that happens fairly regularly, you know, more than once a month type thing. Of course, everybody has a vacation or something like that. Like that's a little bit different, but you know, with us, it was, we'd be lucky if we were there twice a month and it wasn't,
00:14:52
Speaker
it wasn't predictable, right? Because we had events. So that's not predictable for the customer is what you're saying. Yeah, exactly. So the customer, right. The customer wants to see
Exploring Alternative Market Options
00:15:02
Speaker
you there. And a lot of the time, you know, they're coming for you. Uh, and you know, maybe grabbing a couple extra things from somebody else, but they're mostly coming for, you know, your product. So if you're not there, there's no need for them to come. They get out of the habit so they don't get there. So farmers and farmers markets are exhausting and you're smiling 24, like
00:15:21
Speaker
the whole time, you have to smile, you have to see your standing, you're being approachable, you want your booth, you're answering questions, you're on, as I like to say, the entire time. And so they are exhausting. So we switched to doing roadside stands. Actually, I'm really excited because my stand should be done next week. My new official professional looking one. But we switched to that and that was something that, you know, and we're not necessarily close to a main road, but people do come.
00:15:51
Speaker
And I can put that out on a day when my product needs to be moved, and I don't have to necessarily save it till Saturday. So that's another thing. We delve in perishable items. They've got to be moved quickly. If you're dealing with cut flowers, it's even faster than those tomatoes are happening.
00:16:11
Speaker
we've got to get things going and you're picking several times a week. So moving to a roadside stand where you don't, it's just kind of a, an honor system. And you know, maybe we don't do quite as much business as the farmer's market, but I also can be weeding in the field at the same time people are paying me for a product. And so when you look at the, how much I'm paying, right? I'm getting a lot more stuff done and I'm probably making more per hour.
00:16:39
Speaker
even though I'm making less overall. So that's one thing to think of. And then there's, you know, CSAs and CSAs are always, they're easy once you get started, but the process of teaching people when to pick up, reminding them to pick up a weekly email about pickup. And if you're doing veggies, you might be sending them a recipe. Here's what's going to be in your box so that they can prepare what they're going to buy at the grocery store. You know, what do they need to supplement with?
00:17:05
Speaker
It's an education, a lot of CSA's are education based. You know, and then we haven't mentioned yet, but there's you pick or options as well. So people do that for cut flowers a lot, but also vegetables. And so then there's you opening up your home. If you're farming at your home and then people will want to come knock on your door at any point in time, they're like, oh, there's a sign that says that you're not open today, but can I come anyways? And you're like- But I am hungry.
00:17:34
Speaker
Yeah. Yeah. So there's a lot to direct marketing, like you said, the social media aspect, but a lot of people are great at it. They like to smile. They like to get to know their customer. They want their customer to know them, which is great, but it's exhausting.
Engagement in Direct Marketing
00:17:51
Speaker
Yeah. The thing that you're speaking to is like, so what's the reason that people get into these direct markets in the first place? It's because you get a premium on the individual per unit product.
00:18:00
Speaker
But as you're pointing out, you have to do a lot of customer maintenance, a lot of marketing maintenance, business maintenance in order to earn that. And it can work great, but it is something that's sometimes overlooked. You are consistently working for the customer and not just in the way of you're working to bring them a great product, but you are working to keep them engaged. And that is a lot of work.
00:18:25
Speaker
to keep them engaged and seeing you popping up on their social media or seeing you at the booth and wanting them to feel connected to you and your product because they're buying your product from you because of you, not just because you have a great tomato, because there's probably lots of people who have great tomatoes or great cucumbers, but they're buying it because they like you versus a wholesale market.
00:18:50
Speaker
What do you want here? I got it. I drop it off and I leave and that's great. The other upside of the roadside thing is you can be weeding, but you can also be hanging out with adorable corgis. Yes. While people are paying you. Shout out, shout out Remy and who's the new, the new buddy. Remy and Finn, my farm, my farm manager and assistant farm manager. Yes.
00:19:10
Speaker
assistant to the farm manager. Maybe we need to put us a pic of them on the Instagram follow at Hort Culture Podcast. Oh my gosh, they are so, so I know, I knew Remy back from the OG days when he was just a young, just a young lad out at the- A small loaf of bread with a tiny loaf of bread. Yeah, he was just a seed potato in those days.
00:19:32
Speaker
just a baby man it's so awesome to see them but it's part it is like honestly it is part of your social media charm in that case and it's part of you have to be thinking about that and
00:19:42
Speaker
You make it look very glamorous and very cool. And it's like, oh, puffy and flowers. That's exactly the vibe that I'm going for. Let me give you my money to buy a little piece of that heaven that you're showing me. And
Diverse Marketing Experiences
00:19:55
Speaker
then I'll take it home with me and leave you with all the weeding and all of the expenses and all of the dirty. And that's the reality of a lot of a lot of direct marketing is is about selling an idea, selling a concept, conveying something that people are looking for. And I think looking for in their lives that
00:20:12
Speaker
And it takes a lot of work and a lot of skill to make it look as easy as people like you do. Oh, thank you. Yeah. Josh, what kind of market emails have you sold into, Josh? What's that? In your career as a producer and otherwise a rambling man with agricultural products. A man without a country. A couple of different ones.
00:20:38
Speaker
I would, usually they were diversified. And then actually, I mean, it's interesting it sort of segues into a question I had, but my experience has been in CSA, a lot of direct market. I would say mostly direct market.
00:20:51
Speaker
But CSA, restaurant sales, couple of places I worked, well, at least one place, the farm was actually a part of a residential development community. And so the produce actually kind of belonged to the people who paid dues there. So, but all tending to be kind of direct market. And I did have a question, I mean,
00:21:16
Speaker
You and I both work for the Center for Crop Diversification and similar to diversifying production systems, is there a benefit or a logic to kind of managing risk by diversifying market channels in a single operation?
00:21:33
Speaker
I mean, I think yes, but I'm not the guy. Yes. I think so. I mean, you all have, I think I could talk and talk on and on and on about this, but I like to hear your all's perspectives. What do you all think?
Middle Ground Markets: Restaurants
00:21:45
Speaker
One of my examples, I mean, a place that I worked out, it was early on, so I didn't have the kind of experience to analyze what was happening. But, you know, we harvested for a 45 share CSA, but anytime certain crops came in,
00:22:02
Speaker
You know, like we would just one year, I remember we had tons of eggplant, so much eggplant that none of the CSA members are going to want that much eggplant hitting their box every week. And so that's when things would sort of spill over into the restaurant sales channel. And, you know, sometimes we would just have a ton of something and that's when you or the farmer grower would contact either
00:22:24
Speaker
the restaurants or he would contact another grower and do kind of a crop exchange to be able to access and essentially unload some of those products that maybe your CSA members weren't interested in.
00:22:36
Speaker
A lot of our local growers, that's what they do, Josh. They, you know, maybe produce more than they can, that they absolutely know that they could sell at the local medium volume farmers market. So they have developed channels for the crops that they have in larger volumes. And it's usually those middle markets. You mentioned like restaurants, I consider that almost like middle ground. And the price kind of falls somewhere is roughly between wholesale and retail.
00:23:05
Speaker
It's a middle ground market so we have a lot of growers that use those middle ground markets that I still consider direct consumer almost type markets and it's a it's a medium level of production that they can move at one time.
00:23:19
Speaker
It's higher than straight retail at a farmer's market, but it's a lower requirement to get into that than wholesale. And I love those middle level markets. I really like those. And it seems like the price points vary a little bit on those, but if you can work out something you can work with, it's great for those producers that produce beyond the volume, it seems like, of a local farmer's market. You can quickly overwhelm a local farmer's market. Right. But it seems like, I mean, like even
00:23:46
Speaker
There was one place where we were dedicated and just sold to one restaurant. And I would not describe it as a large restaurant. But the way we felt about it, or it was articulated, was the restaurant was just a monster that would eat everything we threw at it. And we could never overwhelm it with anything. I appreciate it. When I first came to the central part of the state, I learned
00:24:10
Speaker
Some things that I'm sure maybe some of you guys already knew, but it was a learning curve for me in that I came to appreciate restaurant managers and how many hats they wear. And when they need product, they need product. And that was a tough thing for local farmers is that, you know, they don't want to buy both in some cases, a manager of a restaurant or restaurants.
00:24:34
Speaker
When they buy, they want a one source purchase option to simplify their lives. And that's something that is a tough nut to crack sometimes because they may say, well, we really would love to buy locally because we believe in that, but we really need a hundred boxes of tomatoes every three days or whatever, some volume. And so a lot of work goes into
00:24:59
Speaker
you know, working with restaurant managers and trying to simplify their lives and remove as much friction from that process as possible. Sometimes it works out and sometimes
Prioritizing and Managing Market Channels
00:25:09
Speaker
it doesn't. I've seen both scenarios. Alexis, do you have like a hierarchy of market channels that get served first versus others? You mentioned the roadside stand maybe as like a catch or an alternate
00:25:21
Speaker
output for other, do you think of it that way? So for instance, if God forbid something happened and you only could service one or two of the markets or market channels that you can, you only have enough service. Are there certain ones that get fed first, so to speak? So I would say my CSA comes first because those people paid me a while ago. So they're first and I plan it kind of based on them.
00:25:50
Speaker
wholesale, I can offer them week to week what I have available. As far as event design, I mean, they're of course a priority, but when it comes down to it, I can get flowers from someone else for that if I needed to fill an order for them. So of course, the more of my own blooms I use, the more money I make. So, but that's something that is pretty standard.
00:26:13
Speaker
that it's okay to buy others, but the CSA people invest in my farm and my blooms, and then I'm only going to sell wholesale what I've grown because then I can't make any money if I'm selling somebody else's products wholesale. And then last would be, yeah, that roadside stand kind of gets the ends of it. And usually, I'm at the point now and you get to a point where you know how many markets that you can
00:26:40
Speaker
And so, you know, I know that if I'm growing this amount of space, this amount of plants, whatever, I should have extra. And so that's why the roadside stand is there because I will have extra because, you know, just in case something else fails.
00:26:55
Speaker
Uh, and that, that becomes a pretty set. Like I know I'm going to have it, but, but yeah, your hierarchy, I would say would be who you're contracted to first and how, you know, can you still make money if you're getting it from someone else? Uh, you know, but it's, it is nice to have another option with, you know, a restaurant or something where, uh, they might be something you could unload or like the co-op. I know there's a co-op in Lexington.
00:27:20
Speaker
a food, like a grocery store type co-op and they used to. I don't know if they still do, but you could contact them if you had a bunch of eggplant or something and you're not necessarily wanting to go to farmer's market or you just know you can't unload that at farmer's market, but you have a few bushels of beans or eggplant or something. There are places like that that will take those off your hands for the right price, of course. Yeah. I think one of the things I would want to emphasize, and we've kind of touched on it, but
00:27:48
Speaker
is when we're talking about secondary and tertiary market channels, we're not talking about secondary and tertiary quality.
00:27:57
Speaker
we're just talking about you want to provide a high quality product to any market channel that you're providing it to because otherwise you won't be providing it to that market channel for very long after that. So this is not a case of, well, we took a bunch of zucchini to the farmer's market and didn't sell half of it. And now it's been sitting out in the sun and it's limp and yeah, let's take that and see if this drive around to restaurants and see if they'll buy it out of the back of the truck kind of thing. That's, that's not what we're talking about here. What we're talking about more is like,
00:28:26
Speaker
either unpredictable, unpredictability in terms of yields one way or the other, that like you have too little or you have too much that you and I think that that that outlook or that mentality of okay, the CSA or the people who have committed to me get serviced first. And then the other the other prioritization can be based on a variety of different factors. It may be that
00:28:51
Speaker
the unit price is the thing that determines. I know that I am going to make the most money off of a small amount delivered to this place rather than this other place. It could be that the long-term relationship management is worth it. For instance, let's say you've worked for two years to get into a local restaurant and
00:29:12
Speaker
Things are going to be a little thin, this harvest. Well, it could be that that's not the most profitable thing for you right now, but having that relationship long-term is more valuable than
00:29:23
Speaker
showing up to the farmer's market this week. Sorry, I hate to do this, but that's not my primary market channel long term. You have to take care of people. I think that brings up just another point that I would say that in general, almost all of the marketing that the people in Kentucky engage in is based on relationships. I think that the relationships in a lot of direct marketing, they're
00:29:47
Speaker
diffuse and there's a whole lot of different relationships that are being maintained all at once and by showing up every week like Alexis said at a farmer's market, you may be maintaining 500 individual relationships at that point. Whereas if you burn a chef who's expecting you to show up with product that they need for their menu for that night by not showing up, that's one relationship that you have probably just killed like a ton of sales just through that interaction.
00:30:14
Speaker
So
Adapting Market Strategies
00:30:15
Speaker
the relationship management piece and understanding and communicating clearly is a whole chapter of this book about understanding market channels and how important it is that you show up when you say you will and all that kind of fun stuff. But the prioritization and diversification of market channels is a little bit of a self
00:30:36
Speaker
a self-actualization or self-reflection journey on like, what is my business model? What am I trying to do here? Who am I trying to sell to? Who am I prioritizing? And how does that factor in everywhere else? And if you aren't clear on that, then when things do get tricky or you have an extra amount, it can be like kind of hard to know where that stuff is supposed to go.
00:30:59
Speaker
Yeah. There's, and there's no shame. Like we say at every episode, I think is your business changes, right? So you might start out just doing farm stand, um, your roadside stand farms, one thing wholesale even. And then as you grow, as you're more comfortable growing, as you know, who's around you that can support you, should you have a crop loss or something along those lines.
00:31:22
Speaker
you can build those and add on one thing. Like last year, Roadside Sand for us, we would only do for special occasions. So Easter, Mother's Day, maybe once a month when I had excess. But what I saw and what I kept record of was how much I was throwing away, right? My composting, whatever, how much was going bad in the cooler. And I said, okay, well, I need another outlet for that. And that's pretty consistent.
Sustainable Growth and Well-being
00:31:46
Speaker
I saw consistently I had extra that I could move
00:31:49
Speaker
But I wanted a low pressure way to move it. And so you'll see that. And it's OK to have years where you have too much and maybe it goes to waste or maybe you donate it to the food bank or we just started donating flowers to Meals on Wheels when we had extra stuff and they would take it with the
00:32:08
Speaker
with the food and everybody got a little like posies type thing, but you know, building relationships that way is also good. And a lot of times those places that you donate to will get your name out there. And so that's also good, but adapt, you know, it's okay from year to year to increase or decrease what you're doing or decide that something's just no longer working for you or suiting you or your life has changed.
00:32:34
Speaker
I think people are so scared to take a step back. I think sometimes there's this, I have to grow, I have to grow. And one thing that, you know, you need to remember is how are you like dealing with that? Are you burning the candle at both ends or are you doing this in a sustainable manner? And sometimes that means taking a step back and you may be able to deliver a better product or even charge more for that product by doing less.
00:33:04
Speaker
personal personal, you know, don't kill yourself. I'm saying this mostly to me because I'm exhausted. Everybody on the podcast is staring at me like Alexis, uh, are you preaching to yourself? Yes. The answer is yes. You're trying to, you're, you're thinking your way through your own scenario. Yeah. And I have done that from myself taking it on less events this year, but the mate, the
00:33:27
Speaker
The thing that we have and a challenge in horticulture is the, unless you're doing sweet potatoes or winter squash, is that you have a highly perishable crop. And so when it needs to go and when it's ready, it needs to go.
Production Strategy and Market Demands
00:33:43
Speaker
And it doesn't matter if you're tired sometimes as I am at the moment.
00:33:50
Speaker
Alexis would you say in your experience or how you organize your production would you say your production is kind of informed by what your what your plans are for your market channels like where or put another way do you kind of plan out your season knowing where the crops are gonna go before you get started?
00:34:11
Speaker
So I think for flowers, yes, event and design, that's something typically I can say I know I need certain colors or if I book off far enough ahead, I like to grow things for those people. And the equivalent of this in the vegetable world would be, I would think restaurants. If you build a relationship with a restaurant and they say, I really want Cherokee purple tomatoes or some really weird
00:34:32
Speaker
Asian vegetable, then they are telling you, I will buy what you produce. And so yes, there is that manner. And then again, the CSA will dictate what I grow. I know I need to fill 20 shares, 30 shares, whatever. I have to have that available. And then anything excess is where that roadside stand or that farmer's market or something like that could come in.
00:34:57
Speaker
But ideally, and you don't necessarily have that the first couple of years because you're still figuring out what those things need. And great things about Center for Crop Diversification is they can tell you, you should be able to harvest this many pounds of blackberries in year three off of an acre or whatever that is. So they can give you low average high realm there, which can be really helpful when planning.
00:35:23
Speaker
You don't know and you're not expected to know the first couple of years unless you've worked on a farm. Yeah. A little nuance
Customizing Production for Markets
00:35:29
Speaker
that you pointed out there that I think is important to keep in mind is that different market channels have different, they value different value propositions differently. So a small restaurant that is known for some sort of farm to table dynamic or a dynamic changing rotational menu, or they like to do things a little bit differently or more
00:35:52
Speaker
experimentally or whatever they have there's a value proposition and then being able to have you grow particular odd heirloom flavorful high-quality really beautiful presentation varieties of a thing whereas your local Bob Evans
00:36:09
Speaker
their whole brand is consistency of product across all of their restaurants nationwide. And so they don't need anything special from you necessarily. And they're going to, you know, you're going to be selling into a distributor, larger distribution distribution chain. And I think that's another thing is that asking to what extent does the market channel care that the product is local?
00:36:32
Speaker
To what extent does the market channel care that the product is special as a special variety or as some other component associated with it?
00:36:40
Speaker
In some cases, you can offer a value proposition of that small scale interaction. You can't call, a small restaurant can't call up Cisco and say, hey, can you encourage the people that you buy your tomatoes from to grow me some Cherokee purples and some other specialty? I had a really interesting conversation, Brad, and it just kind of fits in very well with what you're saying. With a current master gardener that I have,
00:37:07
Speaker
just, you know, conversation one day led to the fact that, you know, he loved growing mushrooms. And I was like, Oh, that's pretty cool. He was growing some, I think, some blue oysters will come to find out. He was growing all of these mushrooms and environmentally controlled conditions. I'm like, either this person really loves to eat huge quantities of mushrooms or something's going on here. So he's a fun guy either way. Yeah, he's a fun guy either way. That is so great. Showed up. Not only did
00:37:35
Speaker
He wasn't bunting that when he was going for the. Appreciate the setup. Yeah, he's a he is a fun guy in multiple ways. But come to find out he was selling to a high end restaurant in Lexington and he grows many of these really interesting crops just for a restaurant and it's mushrooms and interesting tomatoes. He starts them from like
00:38:00
Speaker
His plants, he starts from seeds and grows specifically for a high end restaurant that prides themselves on local ingredients. And he has built his whole production operation around that. And he does other things, but that's one of the things that he does. But before
Marketing Imperfect Produce
00:38:16
Speaker
we get too far into the discussion, I want to throw a little love at the island of misfit toys here for just a second. We're talking about, you know, the area of horticulture that we, you know, typically deal with. And that's products that are very consistent, very uniform, very, you know,
00:38:31
Speaker
grade A quality. How about Brett, you guys, how about those products that may not be free of blemishes that but still have good like eating quality? I mean, what happens to those misfit toys? I mean, do they just go in the garbage or I mean, can you guys like speak to that at all as far as the maybe restaurant potential for those or what happens to those products that are sound but just not visually perfect? What about those? I would say that the industry standard answer would be
00:39:00
Speaker
that those could potentially, now this is if they have cosmetic blemishes but are otherwise of a good quality. Sound, otherwise, yeah.
00:39:07
Speaker
and they would go to some sort of a processing component. So that could be your tomatoes are going to process tomatoes and canning and ketchup or whatever that you're, you mentioned the restaurants, there are restaurants that might be interested in that type of product, especially if they can get a deal on it. There has- The salsa or something like that. They're just trying to make a sauce. Which is a processing, I guess you mentioned that. Yeah, yeah. There has been
00:39:32
Speaker
over the last decade and a half or two there has been this interest or this growing I don't know if the demand is growing but certainly the interest in it is growing to have like an uglies table at your farmer's market booth or to have that opportunity and you know for the
00:39:50
Speaker
I'm a crunchy hippie in my spare time. For people like me, that is something that might have some value, that the value proposition of reducing some food waste may be saving a little bit of money because it's not a perfect quality thing.
00:40:05
Speaker
There has been a certain segment of people who do that. And then yes, Alexis, exactly spot on. We do have people who do that processing thing at their own local level. And I mean, we have entire segments with it. The USDA grading is something probably beyond the scope of this conversation, but we have, there are grades, there's number one, number two, number, et cetera, and our produce auctions, which are
00:40:29
Speaker
hugely important part of our local food distribution and purchasing and selling in Kentucky and across the kind of Northeastern United States down through the Midwest has an entire canning or canner quality category that they sell products for and they sell for cheaper, but they're there to be available to people who are not using them for anything where they have to look perfect. So that's kind of the
00:40:56
Speaker
stock answer and a little bit of the alternative local market answer to that. And I imagine getting those two.
00:41:04
Speaker
those locations where they can be marketed is probably pretty geo specific. It's very location specific and they may or may not be convenient to an operation. I guess is that a fair statement? I think so. Yeah. I think that it can be whenever you talk about starting to reduce the amount that you're making off because you didn't spend any less money, any less fertilizer, any less time on growing those ugly tomatoes.
00:41:31
Speaker
and yet you're going to sell them for lower money or for a lower price, that means you're going to need to consider whether it's worth a, so for instance, an example of that would be, you got to buy 25 pounds of these if you're going to buy them from me. I'm not going to sell them by the court like I do at the farmer's market or whatever that may be. But if I could just briefly follow up on something Josh said.
00:41:53
Speaker
about the idea of, do you, do you plant to your marketing channel, uh, expectations? I think the ag economist side of things and the people who are into marketing and would say, yes, as much as possible, you want to have everything that you're putting in the ground sold before it even goes into the ground. And we actually have a publication called what to think about before you plant available through the center for crop diversification to the university of Kentucky.
00:42:22
Speaker
Really, the sneaky thing is it's not everything what to think about before you plant. It's consider your marketing and where you're going to sell this stuff before you plant it is really the subtitle or the real title of the document. It summarizes a lot of the differences between market channels in a nice cohesive way. Maybe some folks want to take a look at.
00:42:44
Speaker
I think in general, Alexis has given real talk about, ideally yes, I would like for people to pre-purchase every tulip that I sell before I put that bulb in the ground. But the reality is it's a balancing act. But if you are planting and praying, I'm going to put out 2000 squash plants and hopefully somebody's going to buy this squash when it comes out, that is maybe
00:43:10
Speaker
dangerous proposition. A little bit fast
Transitioning Between Market Types
00:43:13
Speaker
and loose. Yeah, you don't have to have it all sold. I will from the toilet point of view. Perfect. It's been a warm year. And most of us have experienced that we had a lot of tulip failure this year. So I didn't have them all sold, which meant I had enough to supply and then the other ones just didn't do anything. So there was that benefit of
00:43:37
Speaker
You know, have some of them sold, but definitely over plan for whatever you have sold. Yes. Tulip gate. Tulip gate. You thought you were going to have tulip, but you ended up with one lip.
00:43:52
Speaker
He's not going away, folks. We try not to encourage him, but if you feed him after midnight, he doubles. It's an exponential function. He doubles. It gets twice as bad the next episode. So whatever you do, don't follow those links Alexis tells you about all the time and encourage Brett Wolf and his punny, funny puns.
00:44:15
Speaker
Yeah. Yeah. I think like something that I've seen over and over again, I have seen people who start out or have gone for a long time in the wholesale, large scale distribution side of things. And either because of pricing, because of access to labor, because they get older for whatever reason, they elect to move more in the direction of the direct marketing side of the approach. And they
00:44:39
Speaker
see those premiums and they take a lot of their experience from that side of things and they apply it to be able to be successful in a number of ways, but they also bring the fact that they're not used to doing as much marketing as is required for direct marketing into that. I've also seen people do the opposite where they start out, they kind of get their on-ramp. The traditional thing that we think of is people get their on-ramp with the farmer's market or they get their on-ramp with maybe with not, probably not CSA. CSA is a complex way of doing roadside stand or something like that.
00:45:09
Speaker
And then they eventually scale up and then they go into the wholesale side of things or they diversify and add that to their product mix. And so I've seen, I've seen both of those directions work and.
00:45:22
Speaker
There's also challenges to growth in both of those where whether that be the scale adjusting to the scale of those expectations of the larger channels or adjusting to the marketing expectations and efforts required of the more direct channels. But I think the path the paths can be gone. You can go a lot of different directions with it. But ultimately there's I have a lot of respect for people who are selling products in any market channel because they are hard to to navigate and they take a lot of skill and a lot of time and a lot of energy.
Key Marketing Advice Recap
00:45:55
Speaker
Cool. Maybe this is a good spot to kind of summarize things. Absolutely. Yeah. All right. Well, so one of the first things Brett mentioned, which I think it's good to mention now is just because a market channel is easy to get into. They aren't necessarily easy to succeed within. I'm going to keep in mind, uh, time and cost considerations are different between different Mark channel between different
00:46:19
Speaker
marketing channels, typically more for direct markets, there is indeed a benefit to diversifying your market channels. And the way that might work is you might have your primary channels might be there for managing relationships or serving loyal customers. Maybe it's driven by a better price, whereas secondary channels are kind of to make sure that you're not losing anything to waste, but there's still a quality product.
00:46:47
Speaker
Market channels assign value differently. So it could be aesthetics, varieties, volumes, sustainability, grading. Anyway, just to keep in mind that they're going to give you value for your sales differently based on what the market is and that your market channel mix or focus can change over the time or as time passes with your operation. And that's what I got out of this.
00:47:15
Speaker
Hit it right on the sweet spot, Josh. That was awesome. Good conversation. It's always applies to horticulture and other areas too. It's a great conversation.
00:47:25
Speaker
Look at us learning about markets and how to make a business plan and all these cool things we're doing these days. Hopefully that's helpful. I'm quietly taking notes the whole time. I'm like, these guys, they know more than they know. I know. He keeps asking me questions and I'm just like, I don't know. Can you just tell me? I don't know. Just give me the answer. Can
Closing Remarks
00:47:46
Speaker
you just tell me if what I'm doing is right? Because I don't really know. They're humble. One of the strengths of the
00:47:54
Speaker
of these folks is their humility. So it's really shining through here. So nobody's as humble as them is what I'm saying. They say it all the time. Nobody's as humble as I am. It's certainly how I think of myself. It's hard being perfect in every way. I do my best though.
00:48:12
Speaker
All right, well, we are so grateful that you were here with us today. We hope you enjoyed that. If you have any other thoughts for podcasts, please, you're welcome to share them with us. You can find us on Instagram, Hort Culture Podcast. Our email is on there as well, so you can find us. Our email is Brett. What is it? I forget. Oh, the one that you gave me. Yeah, what's our email address? I should know. I think it's Hort Culture Podcast.
00:48:41
Speaker
at l.uky.edu. Yes, and that will come to all of us. That's correct. So if you have something specific that you want to ask one of the bald boys, you can title, Dear Bald Boy. Dear Bald Boy. And they will answer. Bald Boy 1 and Bald Boy 2. It won't be me or Ray. I'll let you all decide who's who.
00:48:59
Speaker
But anyways, thank you for joining us today. And as we grow this podcast, we hope you grow with us. Join us next week for some corrupt rotation. And that's going to be fun. Back to the plant part of it. Thank you all so much and have a great day.