There are a lot of benefits for farmers who sell to local wholesale food to businesses and restaurants. To start, Cropolis witnesses the direct, positive effects that these types of relationships build for participating farms.
When we began to inspect food data in 2015, the USDA reported that direct retail sales accounted for a third of total local food sales, or about $3B. The other two-thirds of local sales occurring through direct wholesale channels like selling direct to retailers. These retails are a flux of restaurants, grocery stores, schools, and local distributors. For small and medium farms, selling directly to local businesses is a an important sales channel. It provides an alternative to some direct consumer sales like farm stands, farmers markets, and CSA programs. Although direct retail channels drive most of the conversation about local food, they do not drive the sales.
There are many aspects of direct local wholesale that make it attractive for farms to sell through. Restaurants and grocery stores are often big proponents of local food and for a good reason. These customers recognize the quality that local food can provide and the benefits of personal relationships in food sourcing. Additionally, these groups often place orders of significantly higher volume and more consistently than individual consumers.
Wholesale networks are not without risks however and these should be considered before developing a wholesale sales strategy. When selling directly, the success of your customers drives the success of your sales. Meeting your customer’s needs will further push their interest in purchasing locally. Most often, we hear that to be competitive in a wholesale network; a farm must be responsive and transparent on what they can supply. Further, consistency goes a long way in building trust with customers. Frequent and accurate communication is a key to building these relationships successfully.
Restaurants are a significant driver of local farm food sales, as they search for ways to differentiate their mission, quality, and customer experience. As a farm, local restaurants are an excellent group for which to build relationships! These businesses take local products and highlight the quality of the ingredients and transform your products into plates that their customers love. With this group, we often encounter strong preconceptions about the price of local food and the difficulty of working with local farms. This does not have to be the case and we can help you prove it. There are many tools, like Cropolis that will help your restaurants convey the benefit of purchasing locally with their customers. MailChimp, also, is a great tool to build non-sales focused relationships with your customers.
Like restaurants, grocery stores offer fantastic opportunities to generate and build local food sales. They have recognized that local products can provide a unique experience for their customers. Also, their customers love the concept of participating in the community through their trip to the store. Grocery store sales can have different requirements on the safety standards that farms abide by and can present challenges to the smallest farms. However, working closely with the store and department managers to build trust in your brand can help overcome this.
Local wholesale can be an intimidating space to enter and develop sales. However, the results can be rewarding! Together with local agriculture, local wholesale networks drive a food economy in sharing the responsibility for promoting the importance and benefits of healthy, high-quality food products.
Extra Take Home Notes:
- Working with groups that connect restaurants and the local farm community can build these relationships. You can also try sending short introduction outreach emails offering a free sample of your products and a background on your farm. Putting a small amount of effort into this could begin a healthy discussion!
- Additionally, these customer groups are already aware of the value of local food and take little education to grasp the importance of purchasing directly from a farm. Though, they made benefit from your assistance in conveying the unique value of your farm to their customers.
- Both retail and wholesale sales are based on relationships you maintain with your customers. Customer relationships are hard to build but are also extremely valuable because they provide you a unique, intimate experience for your customers.