What to know before starting an agri-food retail or a farmer co-op
Farmers often think about shifting their farm business into something more, but there are many considerations.
Philosophy: There must be commonality among members of a co-op or it won’t work. Any co-op will likely bring a diverse group of people together. There are many factors that may influence decisions and if the goals are not clear and set out from day one, growers will face an uphill battle the entire way. It doesn’t matter what you’re selling – if everyone has a different mindset it will be difficult to satisfy every voice around the table. It will exhaust you, and precious time and energy will be diverted.
Commitment: Success doesn’t magically occur overnight. It takes real time, effort, energy and sacrifice. The time factor can’t be understated. Whether in-person or eCommerce, it isn’t for the faint of heart. Not all co-ops can pay management right out of the gate, either, given that it is still in its infancy. Members will need to step up in operations and management until the entity can get to stage where it can hire employees. Mature behaviour such as this demonstrates a serious commitment to other members.
Business goals: A co-op is busy, so it’s important to constantly re-evaluate goals and priorities set out by the members. If the goal is to sell vegetables, meat or some other value-added product, be sure to check that the co-op still is striving for those goals. It’s too easy to become sidetracked by ostensibly interesting projects here and there. Just because you can diversify does not mean you should. Keep in your lane, do a good job of a few things, and be OK with not being everything to everybody. You are a co-op, not a big-box retailer.
Reflection: How has the current farm arrangement been working for me, my family and those we need to run our farm business? Sometimes our current setup is better than we may realize. Reflection can help farmers identify whether they need to expand into retail or a co-operative. At times, people want to take ideas and morph them into something greater, but the desired outcomes become elusive. Consider areas that haven’t gone well with the current arrangement, for owners, partners or employees, and how these factors may be improved, or made worse, through expansion.
Foresight: Trying to envision the future for ourselves and our families, if we move in one of these directions, may help predict whether the anticipated gains are worth the extra work, costs and complexities. These learnings may also help us make choices and build plans that better align our aspirations with our needs. No one can see into the future with 100 per cent clairvoyance, but trying to think of our families first may offer clues as to how we want the future to look.
Relationships: In either type of expansion, farmers will work with people they already know. Relational unknowns may lie ahead, especially if current roles change. It’s critical to anticipate these new dynamics and weigh the amount of economy and influence they’ll share with these people and still feel comfortable. Business owners often say Yes to this question only to have the answer shift months or years later to a definite No. If expansion is the goal, farmers must guarantee the new venture will include people who support the objective. Business is important, but nothing will replace a relationship.
Location: To begin a retail, you have three options to reach customers: on-farm, off-site in a populated area, or online through eCommerce. If there’s a solid local food movement in the region, it might be a viable option to set up an on-farm retail. This is also a great way to get started in a limited capacity without making a major investment. The drawbacks of an on-farm retail would be seasonal traffic, potentially low proximity to an urban centre and the challenges reaching your target market and driving brand awareness.
Supply: Many markets focus on one or two key products. It may be a specialization in lamb, artisanal cheese, or perhaps pumpkins. Your speciality is what makes the business unique. To successfully meet customer demand, it’s important to have a plan that meets current retail demand while planning for growth. Specialty products are often a great place to start, but as the business grows and traffic increases, customers may demand a wider range of products. Source out a high-quality, consistent supply of additional products to enhance the market experience and extend your retail season.
Niche: It may be a unique product, an outstanding customer service experience, or the widest range of varieties in your product line, but in today’s retail environment, there must be a hook. If your niche will be animals, understand the consumption patterns and demand from your geographical buying area. If it’s a crop, gain a feel for what your audience prefers. Don’t try to edge out an established retail that focuses on a couple of products, rather, diversify into something similar yet different enough that your business stands out.
From an AgriSuccess article by Trevor Bacque.