Selling Beyond the Farm Gate

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New product assessment

To reach new markets, your business may need to expand the volume of existing products, add new products, or change the production some other way. The key questions for new products are:

1. Does it fit with current product lines? For instance, if you have been raising cattle and decide to start selling apples, you would have to create a new supply chain to accommodate the move to fruits and vegetables. On the other hand, if you expand into raising lamb, they can be sold and shipped along the same supply chain, and may even be good additions to the farm for some agricultural methods such as pasture-raised livestock.
2. Does it require new marketing approaches? As in the example above, the addition of apples would require a new approach to marketing as well as new buyers in the fruit category. The addition of lamb might fit into existing marketing focused on locally raised meat.
3. Do we know if there is demand? This section addresses market research, essential before proceeding with new initiatives.

Resources

AMI offers an excellent platform for exploring new crops.

Market Research

Market research can be done on a large scale over a long period of time with paid consultants, or it can be a simple process of reviewing prices, competition and opportunities in your area. Similar businesses show the results of their market research and strategies, so it is good to review your regional market trends and competitors as well as consulting secondary research for larger trends.

Secondary research resources

Canada’s Growing Appetite for Local Food: the Conference Board of Canada conducted this study on the market for local food in Canada. 

The Census of Agriculture has a lot of useful information on food and farming trends. 

The Community Health Survey has some information on trends in eating as well.

Internet searches can find many polls and surveys about food and agriculture. Check the source to confirm their status as objective and unbiased in their survey methods. University research is likely to be objective and scientifically assessed for accuracy in methods and results. Polls that are sponsored by private companies may have specific agendas that show in the type of question and the conclusions that are drawn. Surveys that are not professional can be skewed by the design of the questions and choices, so it is good to check the methods before relying on a survey or poll. Another question to ask is whether the area surveyed is relevant to your work; there are many surveys available about U.S. food and agriculture, but you must be cautious in applying these to the Canadian context.

In this video, Peggy Baillie describes a step-by-step procedure for simple and effective market research. Several worksheets accompany this video so that you can develop your own market research; you may not want to use them all, they are offered as options that can be customized to fit your business needs. The worksheets include basic market research questions, and a prioritization chart to help your team make final decisions on new products. 

As you develop your market research, you will need to answer these questions:

1. What do I need to know?
2. Who has this information?
3. How will I approach them?
4. What are questions I will ask or explore?

Survey Monkey: this platform offers basic survey development and analysis for free, and more complex tools at a reasonable cost. 

Google Forms is also a free platform that can be used to generate online surveys. However, virtual data gathering probably cannot replace talking to potential customers and buyers to find out what they like and how they want to access their products.

Next steps

Target Market worksheet

Now that you have reviewed some of the options, go to this worksheet to assess the possibilities, opportunities and barriers for the markets in your area.

Then compare this information to your key goals identified earlier. Ask the following questions:

1. Which of these is most likely to achieve your top goals?
2. Which will challenge the achievement of these goals?
3. Why or why not?

How do you know if a new marketing channel will be profitable? The subsequent modules have more on calculating costs (Module 2), and planning for new business (Module 3). Market research provides some of the key data to develop a fully informed business plan for a new product. These links provide some information to help you evaluate and compare marketing channels. 

OMAFRA offers this excellent course on developing value-added products and markets. Contact them to get a copy of this course.

Conclusion

Bringing it all together: This worksheet provides a record of the decisions you have made so far, and sets the stage for the next module when you can work on costing your production and setting prices for your product.

At the end of this module you should:

• Know your market channel target for expansion
• Have completed market research to assess price, competition, demand, resources needed for marketing to that channel
• Be able to identify the following:
  • Target market
  • Knowledge available and needed
  • Existing and needed resources
  • Match to preferences
  • Next steps (including specific actions for team members to move forward)