Expanding your Farm Cart with Value-Added Products
🧑🌾 Cultivating Success: The Art of Value-Added Products for Independent Farmers
The shift to direct-to-consumer sales has put independent farmers firmly in charge of their businesses. For farms looking to increase profit and manage production peaks, expanding into value-added products—like jams, preserves, skincare or broth—is a strategic next step. While it requires testing, planning and cost considerations, value-added items can help farmers capture additional revenue. Joe Schirmer of Dirty Girl Produce in Santa Cruz, California, has been growing produce and leveraging value-added items for 30+ years.
“There's a lot of different kinds of costs associated with value-added items; you need to figure out what it is that you need to get out of it and what you can get out of it.”
– Farmer Joe📈 Leveraging Overproduction to Maximize Profit
A core challenge in produce farming is the unpredictability of harvest, often leading to weeks of underproduction followed by massive oversupply. Joe notes that overproduction often results in perfectly good produce being wasted—turned back into the soil or used as animal feed. Over the years, Joe learned it was critical to plan way ahead, getting prepped for the surplus during the off-season (think equipment, logistics, partnerships); it is hard to react or switch gears to handle surplus mid-season. Importantly, value-added items provide a solution that allows farmers to retain the value of overproduction that may exceed immediate fresh market demand (e.g. shelf stable preserves).
💰 Start Small and Test the Market
When venturing into value-added production, Joe strongly advises farmers to start small and be cautious with initial investment. Upfront costs for glass jars, co-packing, and labor can quickly consume cash reserves. The key is to first determine what the customer actually wants to buy. Investing heavily in a niche or "too weird" product that doesn't sell is a quick way to lose money. Joe has learned experimentation is key to land on the best outcomes; he ‘tests’ by putting small batches of value-added items up for sale to existing online and in person customers. Among other things, he has found that the most basic recipes—like simple crushed tomatoes or standard strawberry jam—are consistently the most popular.
“Don't try to go too big on anything that's new, you need to first make sure that it sells.”
– Farmer Joe🤝 Creative Partnerships and Pricing Strategies
Pricing value-added products requires careful calculation of all associated costs, from growing and harvesting to co-packing, labeling, delivery and storage—while also considering the retail pricing of competitors. From a cost lens, even cosmetically flawed "off-grade" produce costs just as much to grow as top grade produce. The goal and opportunity is to retain the value of ‘ugly produce’, seeing if it pencils out to turn it into jam or preserves or dried goods. In many cases, Joe has found that retail pricing can yield the highest price per pound for his fruit or vegetables. A central strategy for Joe is is leveraging local trade-based co-packing relationships (think someone who does pickling or jams for a business and needs product)—paying partners in surplus produce rather than cash—to circumvent high upfront cash investments, offset costs and ensure [shared] profit margin(s).
📢 Using Digital Tools for Effective Marketing
Once Joe knows value-added items are cost effective and have high demand, he leverages timely marketing to existing customers to ensure sales. Dirty Girl Produce sends out regular digital newsletters (with direct links to their online store to place orders) to both wholesale and retail lists, announcing when a product—especially a newly restocked favorite like their preserved tomatoes—becomes available. This strategy leverages the built-up demand, often resulting in batches being pre-sold to stores and loyal customers, ensuring quick cash flow and minimizing storage time. Bundles and mixed cases, particularly during the holiday season, also serve as effective sales drivers.
📆 The Importance of Off-Season Planning
Successful value-added production requires extensive planning and can't be rushed mid-season. Joe emphasizes that the off-season is the most critical time for farm business. This is when he meticulously updates his crop plan spreadsheets, adjusting sowing dates and volume based on the previous year's sales and yields. For value-added specifically, this is the time to finalize recipes, order glass, secure co-packing agreements, and build the necessary infrastructure. His advice is clear: go slow, build your business year after year, and only invest in products that you have clear evidence your customers want to buy.
Conclusion
Plan ahead to build a new line of Farm revenue from Value-Added Products. Revisit the past few years of your operations and consider what products you have that were overstocked that could be creatively re-packaged as a high-margin item. Many Farms have found success with simple Value-Added Products that are shelf stable, provide additional revenue in the off-season, and satiate consistent demand.
Working with 1000’s of Farms that serve 1M+ Buyers across the entire country, Barn2Door has data and the expertise to help your Farm make more money, ditch the office work and look like a pro. If you’re curious to learn more, watch this 5-minute video.