Farm Diversification

Many consumers are looking for key offers from producers when they visit a Farmers’ Market, such as freshness, taste and quality.  Consumers are also keen to “connect” with producers and learn more about how and where the produce was reared, grown or made.  The aim of the producer should be to seek ways to add value to produce (e.g. turning fruit into jam).

Local markets should be visited to identify what is already being sold at the market and to judge if there may be a demand for your produce.  Umbrella organisations such as the National Farmers Retail and Markets Association (www.farma.org.uk) and the Scottish Association of Farmers’ Markets (www.scottishfarmersmarkets.co.uk) should be consulted, as should the local organiser for information on markets in your area. 

There may be a waiting list for space at local markets, or there may already be a number of producers selling effectively the same product and the market may be looking for a wider range of produce for sale to broaden the overall appeal of the market.  This information may help you formulate a plan as to what produce to sell and how to differentiate your produce from that of competitors.

Most Farmers’ Markets own the stalls and rent them to stallholders.  Chillers and fridge cabinets are usually supplied by the stallholders.  Depending on the produce being sold a suitable vehicle/trailer (which may require to be refrigerated) will be required to transport produce to the market.

There is a substantial time commitment in preparing produce prior to market and attending the market itself. 

There is likely to be a need to adapt existing buildings or build new premises on the farm to meet all appropriate Food Hygiene and Health and Safety regulations.  It may be possible to rent suitably accredited premises for food preparation, again depending on the actual produce and quantity to be prepared and sold.

Produce will require to be packaged and labelled to meet all relevant regulations; it may be possible to sub-contract this to a third party if the scale of production does not warrant investment in such equipment.

• Adaption of existing buildings or building new premises and associated fittings and equipment: Costs will depend on the type of produce and preparation required.  For example, installation of a butchery facility, kitchen to make jam or pickles or area for preparing vegetables.
• Vehicle: Second hand refrigerated small van - £4500 upwards / Second hand van - £3500 upwards
• Chiller/fridge cabinets - £500 upwards
• Banners/Advertising stands/branded clothing - £100 upwards
• Website creation: around £500 upwards

Production costs: variable depending on particular produce

• Stall Hire: Around £50/day
• Labour: Market stall duty, preparation of produce
• Samples/Offers/”give-aways” (e.g. two for one): variable
• Training costs –e.g. food hygiene courses, other relevant training
• Advertising: Production of leaflets/recipe cards etc - £100 upwards; website around £100 per year for updating website
• Transport costs: Fuel, other vehicle costs
• Rates: New premises may be liable for rates.

Correct pricing of produce is essential to the success of any enterprise.  The market should be fully researched to establish how much could reasonably be charged.  An appropriate profit margin will need to be calculated in order for the venture to generate the desired level of return. 

The development of a repeat customer base should be a key priority as these are likely to form your core clientele.

• Capital costs: Sound business planning including a thorough feasibility study should help reduce risk.  Grants may be available (see section below)
• Labour/Time: Establishing a presence at Farmers’ Markets can be very time consuming.  Any additional labour required will require appropriate training.
• Legislation: All necessary legislation and regulations must be complied with.  There will be both time and cost implications in order to comply.  The Food Standards Agency produce a useful guide (Food safety guide for Farmers Markets in Scotland), see -www.foodstandards.gov.uk/multimedia/pdfs/scotfarmersmarket.pdf
• Competition: Competitors can be both a good thing and a bad thing.  Competition can help keep businesses on their toes by creating the impetus to develop new products or find ways of staying ahead of the opposition.  On the other hand, competitors may already have a big share of the market, putting pressure on your business.  A full competitor analysis and a well-planned strategy are essential parts of the business plan.

Food businesses have a responsibility to ensure that food is kept safe and free from contamination and this involves compliance with all relevant legislation and regulations.  The Hygiene regulations require food business operators to ensure that food handlers are supervised and instructed and/or trained in food hygiene matters appropriate to their work activities.  In addition, those responsible for the development and maintenance of procedures based on HACCP (Hazard Analysis and Critical Control Points) principles will require to have training in the application of HACCP.  Advice on appropriate training requirements can be obtained from your local authority Environmental Health Department. 

Training providers include SAC (www.sac.ac.uk), local colleges and the Royal Environmental Health institute of Scotland (www.rehis.org).

Training in customer service, marketing and website design/maintenance may also be appropriate.