Price for Profit: How Smart Packaging & Pricing Boost Farm Sales
Are you leaving money on the table with your farm products? In this week's episode, James sits down with Account Manager Ryan to dive deep into the pricing and packaging strategies that successful farmers use to increase their average order value and improve profit margins.
For more Farm resources, visit: barn2door.com/resources
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[00:00:00] Hello and welcome to the Independent Farmer Podcast, the go to podcast for do it yourself farmers who are taking control of their own business, skipping the middleman and selling direct to local consumer and wholesale buyers. This podcast is hosted by Barn2Door, the number one business tool for independent farmers to manage their business, promote their brand and sell online and in person.
Let's dive in to today's Independent Farmer Podcast.
James Maiocco: Welcome to the Independent Farmer Podcast. I'm James, the Chief Operating Officer of Barn2Door and your host for today's episode. As many of our listeners may be aware, Barn2Door is built for farmers who wanna cut out the middleman and maximize outcomes for their business.
We help farmers make more money, ditch the boring office, and look like a pro. [00:01:00] In today's conversation, we'll be getting into pricing and packaging best practices for your farm products. With more than a quarter billion in farm sales and more than 1 million buyers, we have a lot of data and experience.
Today I'm happy to welcome back Ryan Grace, an account manager on our success team. Ryan works with farms all across the country to ensure they maintain and build successful business practices to spur their growth while streamlining their operations. I'm excited to talk with Ryan today about pricing and packaging to help farmers increase their average order value and improve their profit margins and move more product.
Welcome back, Ryan. Great to see you.
Ryan Grace: Thanks, James. It's great to be here.
James Maiocco: Well, for those listeners who may not be familiar with you, and may have not listened to you on our prior podcast, can you share a little bit more about what you were doing before you came to Barn2Door, a little bit more about your background.
Ryan Grace: Yeah, definitely. I spent a few years working for other tech companies like Apple. In my most recent role before switching to Barn2Door, I was working at Toast where I was helping restaurants get implemented with their new POS systems. So, very familiar with Getting [00:02:00] people used to using a new system, educating them, training them on best practices there.
And so when I heard about Barn2Door, it was really just a natural fit with my skillset in an area that I'm a lot more passionate about. We had a little 24 acre farm growing up, so being able to jump back into that world, it's been a blast. And working with these farmers is really rewarding.
James Maiocco: You can really appreciate their day to day, right? Can you elaborate for the farmers who are listening, what your role looks like day to day? As an account manager?
Ryan Grace: Yeah, as an account manager we're meeting on a very consistent basis with our farms going over best practices, sharing some of the tips and tricks we get to learn, with the farms that we meet on a daily basis here.
and just going through like a store audit. So making sure that their stores set up to be successful, going through their pricing, their branding strategy, how are they marketing themselves. And so really from a holistic lens, just taking the best business practices that we've seen be successful. And guiding these farms on how to implement those themselves.
James Maiocco: I really love it. Listening to you and the other account managers talking with [00:03:00] farms, just given we have so much experience and so much data, you guys do such a great job. Not telling farmers what to do, but sharing with them, Hey, here's what we see. Here's what the data tells us. Now you make the business decision about what's best for your farm, right?
Because ultimately no two farms are exactly the same. Well, let's dive into some of these best practices that you've seen. We certainly know that packaging quality can significantly impact a buyer's decision to return to a farm. Some studies showing more than 60% of consumers won't purchase if they're unsatisfied just with the packaging of our product.
How can a farmer leverage good packaging materials and design beyond just protecting the product to actually strengthen their farm brand and secure that next repurchase.
Ryan Grace: Yeah, I mean, branding is huge. Packaging is huge. You can think about a time when you've received an item from a business.
And when you're unveiling that package and it's nice and put together, well, just how much more you appreciate the quality of the products that are inside. I know Apple, when I worked with them, they took that very seriously. So same thing with our farms, right? You wanna think about who you're trying to market [00:04:00] to, who is the customer that you're.
Presenting this, box or this, bundle in front of, and what do you want their experience to be? So I think when you can start with that in mind of who am I trying to sell to? Who's my ideal customer and what would that customer wanna experience? And then going above and beyond, I have a farm who individually wraps all of their meat in their bundle box with butcher paper that they have stamped with their logo on it because it kind of gives people that old school butcher feel, it's really nice and neat inside the box. So taking that little bit of intentionality has made a big difference for him and his customer base, and he gets a lot of compliments on doing that. You also want to make sure that when you're putting things into the box, that you're giving plenty of opportunity to reengage with that customer.
You wanna give links to your store, throw in a QR code, throw in a farm sticker. and a nice thank you to your customers for supporting your business. Those little things go a long way, with your customer base and make a big difference.
James Maiocco: Well, those are great suggestions. I know for myself too, I get five different farm subscriptions that are delivered to my door or available for pickup.
And I know [00:05:00] that sometimes, like you said, it doesn't even have to be super detailed, like, you know, individually wrapping items. Sometimes it can just be really good tape. On the box that has their farm brand on the tape. It's a pretty low cost thing to do. You can still use a brown box, but the tape looks fantastic, right?
and oftentimes too, I'll see people just either put a stamp or have a sticker for a QR code. And I know I've had several neighbors just off seeing the packaging on my doorstep sign up to buy from a farm that they see delivered to my door. And so it's not just about my experience necessarily too, sometimes it's about even an avenue to capture more customers as well.
Have you seen those tactics work out as well?
Ryan Grace: Absolutely. Yes. Especially with some of those totes, when you're thinking about dropping those off and then that. Customers walking around using it for various other things that they're doing throughout their week. They see their friends and family.
I think it might've been Bennett Farms that was telling the story of how he was at his daughter's soccer game and one of her teammates had one of his farm bags she was using for her cleats. And he just thought that was so cool. 'cause this was years after they were sending those out and being able to see that it's [00:06:00] still working.
That's still advertising, that's still getting his brand in front of people.
James Maiocco: Great, great point.
Well, let's turn to another piece of data that we see is key when it comes to selling out and offering more convenience tailored to different household sizes. Now, I understand that about a third of Americans live with just one person.
They live alone and. About another third of Americans live with two people, and the remaining third of people live with three or more people. What is your best advice for farms when it comes to simplifying your inventory to appeal to a diverse range of buyers and household sizes?
Ryan Grace: Yeah, it's really important to take this piece into consideration when you're setting your store up to be successful.
Cause as you mentioned, beyond just the, one third of, different household styles, there are, you also have people who maybe can't afford to do a quarter half or. Don't have the freezer space to fit that in there. and so being able to offer bundles and boxes that are a lot more digestible to those family groups that are your couples, your larger families, I grew up with a pretty big family and we could go through a 20 pound box pretty fast.
so you want to be able to [00:07:00] give a couple different options for people to pick and choose based off of their household needs. and that's gonna help open up who you're marketing to. So now you're not just marketing to 3% of the people. Have the freezer space and cashflow to buy in that large bulk.
You're opening your doors to people who want convenience and you're making it very convenient for 'em by putting together a nice box, with products that they can use throughout the month.
James Maiocco: That's a great piece of feedback. I too grew up with a big family, but now I'm an empty nester. I live with just one other person.
And so while I know I get just a 20 pound box, once a month for my pasture proteins, one of the other guys in my men's group, he's got six kids at home still. They get a 50 pound box once a month, but we both have recurring commitments and a farmer wins in both cases, right? Neither of us are buying a quarter half or whole, but we are just buying a large format of beef and it's just moving a lot more product more consistently.
Does this same type of tactic also ring true? When you start thinking about other types of items, how would that apply, for instance, for like a dairy operation or a produce operation as they think about [00:08:00] different formats or sizes of grouping or assembling bundle boxes?
Ryan Grace: Yeah, I mean, when you're putting together these boxes, really what you're trying to do is you're trying to become the one stop shop for your consumer who wants local products. So if you're doing dairy, putting together a couple options whether that be a gallon or two gallon, and maybe partnering with another business to be able to offer in some fresh sour dough or some eggs, putting a breakfast bundle together and now you're just taking this, one product and you're really diversifying yourself and able to add a lot more value added items that increase your average order size, which is what we're trying to do here.
James Maiocco: Great example. I know we see a lot of farmers have a great deal of success with that. And also can then raise up the total value of not just the total sale, but even the purchase value of individual items since they're not itemized. Right. I know some of the dairy farmers we see end up getting, if you were to itemize it, like north of $20 a gallon on milk, which people have a hard time believing.
But if you're selling a hundred dollar breakfast box once a month or. Twice a month, whatever it may be. Like you said, a couple gallons of [00:09:00] milk, some eggs, some yogurt. Some sourdough for a hundred bucks for delivery on your doorstep. That sounds like a good deal. If you were to itemize it, would they have ever purchased those individually?
Probably not. But when you offer something convenient that meets a specific demand makes a lot of sense. So. Let's shift gears and talk a little bit about subscriptions. 'cause we know this is a really powerful tool for generating recurring cash flow. And buyers like myself who keep consuming, like we all do, we all have to keep eating, right?
but I also know I love just the convenience of having food show up on my doorstep, So when successfully. Pivoting to some sort of subscription model. How should a farmer accurately price that box, whether it's monthly or biweekly, to ensure that they're getting healthy margins while locking in a stable price point for their loyal customers.
Ryan Grace: Yeah, I think a misconception I see a lot is farmers thinking they need to heavily discount these subscription boxes. And I would actually encourage 'em on the other side of that, the flip side, what you're putting together with a subscription not only helps you move the whole animal that you're trying to move and all of the products that you have [00:10:00] available, it also takes away the decision fatigue for the buyer.
You're making it as easy as possible for them. You're basically becoming a trusted source for that buyer who wants to be told, what are the best products that are in season? What do you have available? I'm going to you because you are my local producer and I wanna trust what you're gonna provide and I'll pay that on a monthly basis.
I think the average consumer has seven to eight subscriptions. so it's not a foreign concept. It's something that we want to have a set it and forget it model. And that just helps the farmers know like, Hey, I can bank on once a month. I know I'm getting these orders in. so for consistency in cash flow and just for the ability again, so you can piggyback off some of your really popular items like your ground beef, which we see a lot of people being able to move very easily.
Your milk, if you're a dairy producer, eggs use those that you're selling out of consistently. to build a box behind, so then you can add in a couple other cuts in addition to that consistent ground beef, which helps you move products the way you need to.
James Maiocco: I think it's a really great piece of feedback too, and now many people just think about the price of their own [00:11:00] products versus thinking about the available wallet that they have to sell to, right?
The average American per person spends about $500 per month. And so if you have a one person household, they've got a $500 month grocery budget, two person household spending a thousand dollars, right? And so if you're selling proteins into that household, you should be able to capture upwards of 30 to 40% of that budget. And if it's produce maybe it's another 20 to 30%, whatever it may be, don't be afraid of trying to capture more of that available wallet. 'cause if they don't spend it with your farm, they're gonna spend it somewhere else. I also really love your point about decision fatigue.
Like you said, it's never fun to have to go through and assemble 20 items in your cart. If you're trying to check out from Whole Foods online, it takes a lot of time. If I can just go and like you said, just gimme a breakfast box or a dinner box or a griller box and gimme all the things I need while you just saved me a ton of time and reduce the amount of decisions 'cause I trust you.
Has that helped also? What are some of the things that you see beyond those core products, that you've seen farmers use to dramatically increase their average order value that are kind of complimentary [00:12:00] value products when thinking about moving these types of products into market. Should they be assembling all these themselves or should they look to create partnerships or what do you suggest?
Ryan Grace: I mean, again, if you want to be the local producer, you wanna be the person that your community's going to.
' cause you either have the product or you know, somebody who has a product that they're looking for. So when you think about who your ideal customer is, just like you said on what they're spending their money on, you wanna think about what other businesses are also servicing that type of customer.
So someone who's gonna be buying locally from you is probably gonna be supporting a local coffee shop as well. So if you have, let's say, bacon and eggs, maybe you partner with a local coffee shop to bring in some of their coffee beans to add into your breakfast bundle. Now you have some great cross marketing opportunities.
cause you're promoting that coffee company, they're gonna be giving you a shout out as well. and you're just helping expand your market with complimentary goods. So that's what I would be looking for when I'm trying to set up these partnerships is who else is providing a good that I can add into my box that compliments the products that I [00:13:00] already have, and then marking those up, you wanna get paid for those.
James Maiocco: Yeah, I absolutely love that idea. Especially, like you said, it's an avenue even for some joint marketing or some joint posts together on Facebook or Instagram.
Right. and so now all of a sudden you're expanding your reach. The coffee company gets access to your customers and you're getting access to the coffee company customers, right? It's a win-win, And yet you're raising the overall value for the buyer by again, just.
Providing it all in one rather than making 'em have to go make multiple stops. Love that. Tell me a little bit more about this debate that we see going on amongst farmers, particularly amongst produce folks who always are gauging should I offer a buyer's choice, CSA or Farmer's choice CSA. Obviously there's the data, if you wanna streamline your operations clearly looks more towards a farmer's choice model. Can you explain a little bit more about that and how a farmer's choice model helps a farmer reduce their operating costs and ensure all the inventory is moving more efficiently?
Ryan Grace: Yeah, I mean, even beyond helping the farmer so from that standpoint it's gonna allow you to move your products the way you need to. 'cause [00:14:00] as you know, not every cut in a cow is the exact same. Not every cut your chicken's the exact same. Not every season that you're harvesting is gonna be the exact same.
So you need to be able to have some flexibility to move products the way that you need to. But even for the buyers, 90 to 95% of buyers are willing to take the recommendations from the farmers. I know when I go even to a local restaurant, I want to ask the waiter what they would recommend, right?
I want to be informed. I want to be educated on what's the best thing to get. And so farmers get to do the same thing when they're doing these farmer's choice produce boxes, bundles, when they're sending 'em to their customers. Be that resource. If you're putting in a cut that may not be as familiar, put a recipe in there.
Share your favorite way to cook it. This is how you use our whole bird if you're putting a whole bird in there, talk about using the bones for stock or the feet to build a good stock that you can put in your freezer and keep for the whole winter. So really being not just a place where they can get goods, but being an educational platform for your customer base is crucial.
James Maiocco: And I love your point about the restaurant. I do the same thing. [00:15:00] I always wanna know what's fresh, what's in season, what's rotating on the menu. ' cause that's what's the most interesting as a consumer, right? And it's also healthier for you to actually diversify what you're eating.
And I think people who want to buy from local farms are looking not only for the farmer's recommendations, but they're also looking for healthier alternatives. And so that's where I think, again, I've seen too often sometimes farmers get a little dissuaded about this because they might have a few very loud picky, buyers.
What's your recommendation for the farmer who has those few loud picky buyers, Who just want what they want.
Ryan Grace: Yeah, I mean, it's always important to know that not everybody's gonna be your ideal customer. So always keep that in mind. But if they want to pick and choose, that's where the shopping cart comes into play.
They can add all the a la carte stuff they want, offering the Farmer's Choice subscription again, puts you into a position where you can move products the way that you need to. For those picky people, they can go and they can individually select all the items they want. Build the cart themself.
James Maiocco: Love that.
Great, great feedback and great recommendation. [00:16:00] So let's talk a little bit about some of those less familiar cuts or secondary products that sometimes might even get dispelled. There's a lot of beef byproducts things that people may not be familiar cooking with or new products like microgreens that they've heard about, but they may not necessarily understand what to do with them,
What innovative branding and packaging tactics can farms employ to either rename or sell these products or repackage these products to make them more highly valuable or more high demand?
Ryan Grace: Yeah. I think there's a lot of great ways you can do this. Going back to your first question about the box, when you're unpacking that box, if you're adding in a unique cut, something that you're trying to move, that may be a little unfamiliar.
You always want to add in some kind of recipe card or informational piece. Maybe even just educate them on that cut. Here's how you cook it. I thought I hated pork chops my whole life 'cause I always overcooked them and they were dried and it was just me not understanding how to do that cut. and having a roommate who's a chef who really got to show me, you just need to cook this cut of meat differently.
And now it's one of my favorite things to make. So. lean into [00:17:00] that. Educate your buyers on what products you're putting in, and even the why behind it too. Like this is why we include these items. We have a diverse product mix. We wanna be good stewards of the animals that we have, and we wanna make sure that we're getting the most out of those and not wasting anything.
And then there's some also creative things you can do with like your heart, your liver. We have a lot of farms that will blend that into what we would call like a carnivore mix or a primal blend. You can see even those fine grocery stores. Those sell at a premium. So now you get to move a lot of your organ meat.
If you're struggling to move those, throw it in with some ground. You do 90%, ground 10% of that organ meat and sell it. Mark it up, mark it up two bucks. And now you can sell that at $14.99 a pound instead of your $12.99. I've even seen a lot of farms recently using some of these products for animal treats.
So you can use your freeze dried or dehydrated chicken feet, make great dog treats. Chicken necks, another one that I've seen. I just bought a bag of duck feet for my dog as healthy, natural, dog treats and they were 14 point 99 for her a [00:18:00] pound of duck feet. So if that's a product that you're not moving or is just going to waste, there are creative ways that you can continue to maximize your earning potential just by offering some creative products.
James Maiocco: And what about like, rebranding some things, just a different name. I know you've seen some things too, where they'll take a cut of meat that doesn't sound very enticing and give it a different name and it's, well, that's kind of creative.
Ryan Grace: Yeah, I know a perfect example of this.
A lot of times you'll see farms who get stuck with a lot of their stew meat in the summertime 'cause a stew meat doesn't sound very appealing, when it's 98 degrees outside. but being able to rebrand that as kebabs. It's the same cut. You're just giving it a different name, and now you're, you're putting that into your grilling bundle where you have some of your short ribs, you have the kebab cuts, you have some burgers, and it just helps you again, maximize all the earning potential you can have within your products.
James Maiocco: Great, great suggestions. And I really loved the stewardship angle of this too, which is use every part of the animal, and what better and more healthy alternatives even for your pets too, like you said, even with the chicken feet or the duck feet. That's awesome. [00:19:00] Now, buyers expect convenience when it comes to.
Paying a premium for good products, how can a farmer strategically use bulk or volume pricing or minimum purchase thresholds, in order to simultaneously incentivize customers to spend more right, or increase the average order value and simplify the transaction.
Ryan Grace: Yeah, that's one of the things that we make really easy within our platform.
When you think about order reminders to those people who are bought into subscriptions. On average, people who are paying for the subscription will spend 75% more, so they will do those add-ons. So that's one great way to help grow that. And the other one is just, the incentivizing. So maybe you have a 10 pound ground beef bundle that's discounted to where they get a pound for free if they're ordering that 10 pounds. so there are ways that you can do it to try to increase the bulk. and some of it too is just rewarding those loyal buyers who are buying into a subscription. So giving them some exclusive offers, giving them some private store access where they can get some of those real high end cuts to add into their orders on a weekly or monthly [00:20:00] basis.
James Maiocco: Yeah, I know we have some farms too who are like, Hey, every, you know, pork subscription includes bacon, Because everyone wants bacon. But if you're a pork farmer and you put up bacon for sale, you'll sell out of bacon. You'll be left with everything else. So I love that idea, which is reward and incentivize people to.
By larger format or by subscriptions to get access to those high demand products. I've also seen a few farmers do the same thing too with on-farm, farm to table chef dinners. Like, hey, if you're a member of our subscription base, guess what we do a once a quarter or semi-annual chef farm to table dinner, you know, and everyone loves the iconic look of the lights outside and sitting out on the farm.
And that's really special. People are willing to pay a premium to get access to those types of experiences, right?
Ryan Grace: Yeah. I have a few farms that even do, for every subscriber you get a, a free farm tour. and they'll tell you that those people that show up for the farm tour. Are buyers for life.
They don't ever shop anywhere else. So, that's another great way to, one, showcase. And those people that do go there too, they're gonna be telling their friends about it, they're gonna be telling [00:21:00] their family about it. 'cause it's a cool experience. It's something that they wanna share.
James Maiocco: I know that is absolutely true for myself when it comes to the whiskey tours I've gone on like once I've gone to the distillery, we're not too far from Bardstown. For those people who are listening to us, Nashville's just about two hours south. But once you've gone to one of those distilleries, like, Hey, I'm gonna be a buyer for life now I've learned the family history behind this, et cetera.
No different, with food. and much healthier for you too, right? We eat three times a day. I certainly don't need whiskey three times a day. but your, your point about the brand affinity is key. And I think, you know, if any farmer who's listening to this doesn't look at their jacket or their boots and think, okay, I'm wearing a Carhartt, or I'm wearing a pair of Red Wings, etc, like the value of that brand.
Big deal, right? 'cause people stay loyal to that brand and they keep coming back because they trust the quality of your products. Uh, any last tips, Ryan, before we sign off? You've given us a ton of fodder for our listeners today in terms of things they could be doing to increase their packaging and pricing best practices.
Ryan Grace: Yeah, I think one of the biggest things, and we talk about this a lot in account management, you [00:22:00] really have to know. Your pricing. so know what your costs are. I think it's really important to to build out an Excel sheet early on and just get a breakdown of what your costs, including your labor, your time, your effort, all that you're putting into the product to know what you need to be able to make.
' cause once you know what your costs are, then you can start looking at, okay, well what do I wanna make to make this business sustainable, to continue to be this resource to my community? And look at those profit margins that you're trying to target. Once you have that stuff in place and then you start looking into, alright, well who am I trying to sell to?
Who is this ideal customer? and it's really gonna form how you build everything out as far as your pickup locations, who you're delivering to, where you're marketing, what businesses you're partnering with. So the sooner you can get grasp on those things, knowing again, your cost. What you wanna make and who you wanna sell to, that's really gonna set you up for success.
and it's gonna again, dictate a lot of how you're building this stuff out.
James Maiocco: Well, great feedback Ryan. Thank you so much for joining me today on, the Independent Farmer Podcast Farms working with Barn2Door [00:23:00] can actually join he and his team anytime for hands-on assistance during Barn2Door Office hours Monday through Friday.
Here at Barn2Door, we are. Humbled to support thousands of farms all across the country, and delighted to offer software and services to help your farm make more money, ditch the boring work and look like a pro. If you're an independent farmer who is just getting started or transitioning to selling direct, please visit Barn2Door.com/learnmore.
Thank you for tuning in today. We look forward to joining you next time on The Independent Farmer Podcast.
Thank you for joining us on the Independent Farmer Podcast. At Barn2Door, we are passionate about empowering independent farmers to build a thriving business. To all the farmers out there, thank you for all you do to grow amazing food, care for the soil, and serve your local communities. You are the backbone of our country.
For free farm resources, or to listen to prior podcasts, go to barn2door. [00:24:00] com backslash resources. We hope you join us again and subscribe to the Independent Farmer Podcast wherever you stream your podcasts. Until next time.