Minimising waste at the retail stage is vital for sustainability and profitability. Cost is added at each stage of the supply chain, so losses at this final step are more expensive than at any other point. This guide is aimed at farmers and growers who are retailing directly to customers, with a particular focus on market stalls and farm shops, but it is also has relevance to box schemes and independent shops.
Balancing supply and demand
Avoiding overproduction is a first and fundamental step to reducing waste at retail, but this is easier said than done. Fluctuations in weather conditions affect yields and pest and disease damage positively as well as negatively; Market conditions can change rapidly (most recently as result of COVID 19 restrictions); and many growers routinely include a large ‘safety margin’ in their crop planning to avoid shortfalls, for which they can be heavily penalised in some supply chains.
One approach is to diversify markets, so that produce surplus to retail requirements can be sold onto the wholesale market, for example. Alternatively, the problem can be addressed through value added processing (See Guide No 5 for details).
Predicting demand can be challenging. Many box schemes have a core customer base with a fairly predictable ‘churn’ which means that estimating quantities is relatively straightforward (although in the early stages of the COVID 19 pandemic many box schemes saw their demand rise by up to 500% over a period 2 months). Farmers markets and farm shops are harder to predict because they rely to some extent on passing trade. There is little recent research on national trends, however individual markets often carry out their own studies to estimate footfall, spend per customer, takings and other key performance indicators, and are therefore likely to be the best source of information. Other growers and stallholders may also be willing to share information with you.
Grading has a key role in ensuring that the produce that reaches the market is of an appropriate quality. Guide No 6, ‘Grading and packing’ includes detailed information on grading techniques and a general overview of quality standards. However, understanding the requirements of your particular customers, and in particular their tolerances around certain quality criteria will help you make informed grading decisions to maximise profitability and minimise waste. For example, customers who support local farm produce sold direct are often more tolerant of misshapes, size and to some extent cosmetic damage compared to supermarket customers.
The single most important way to reduce waste at the retail stage is to build and maintain a fast turnover of sales, so that the product is on display for as short a time as possible. The key points are outlined below and further information is this ‘Selling Food Direct Toolkit’ from Food Skills Wales
The most successful stalls are often the most attractive. Make sure the immediate area is clean and tidy; use a tablecloth (possibly printed with your logo) or some hessian cloth to cover the table; and make sure you yourself are presentable – the muddy grower look may appeal to some customers, but ‘farmer chic’ is a much safer bet!
Clear signage is important and attractive, well-designed labels are often a good investment. As a minimum they should show what is the product is and how much it costs. For some products it may also help to make cooking and serving suggestions, for example ‘Butternut squash -delicious roasted with olive oil and fresh herbs’ – particularly if you also happen to be selling fresh herbs!
It is a good idea to list available produce on a chalk or white board so customers can see the offer a glance. Some traders strike through items, rather than erasing them, when they are sold out. This suggests that your product is selling fast and that customers need to ‘buy now while stocks last’, helping to create a positive feedback loop that can be effective in increasing your turnover.
Designing your stall
Stall design, or shop display is largely about creating an impression of abundance and variety. This does not necessarily mean presenting large volumes of product, rather it has to do with matching the size of your stall and the individual display baskets/ containers to the stock you have available, for example:
- Stack produce rather than lay it out on a table
- Make sure your containers are always full. Carry a range of different size baskets and when stocks run low, transfer produce to smaller containers and reduce the size of the display as whole
- Hang things up on rails where appropriate, e.g. bunches of onions and garlic, to create the impression your stall is full to bursting
A display is highly attractive and arranging your produce to avoid a ‘wall of green’ will make it more eye catching. It may also help to put things that go together adjacent to one another, for example tomatoes next to basil.
Once you have established your design, keep it consistent so your regular customers know what to expect and where to find it and will notice when you introduce something new and exciting.
A varied offer is vital, not only from a display point of view, but also for maximising sales. Most people are looking to fulfil their requirements from one or two stalls/ shops. You can achieve this in a number of ways:
Grow a wide range
This usually means investing in protected cropping structures (poly tunnels and greenhouses) enabling you to produce more crops over a longer period – preferably all year round. You will also need to make successional plantings. This involves a great deal of detailed planning to make sure you plant and harvest at the correct times, and that the varieties you use are appropriate to the season (specialist cauliflower growers use up to 9 varieties to ensure a year round supply). Guide No 1 ‘Growing for quality’ has further information.
Work with other producers
This has a number of advantages: Together you can produce a wider range of produce; individual growers can focus on the crops they grow best; working through a producer group allows you collectively to even out peaks and troughs in supply; and the work of staffing the stall or shop can be shared between several people.
However, there are also challenges; a degree of coordination and planning is required to ensure that appropriate quantities of the right crops are grown; administratively it is more complex as the takings have to be distributed equitably among the group; there has to be agreement on the pricing policy (see below) and the degree of flexibility the person on the day has to reduce prices to increase stock turnover. This video explores the issues in some depth.
Buy in produce from wholesalers
This is the simplest of the options to increase product range. However, it is important to ensure the product you use is consistent with your business ethos and marketing messages. Many customers buy from box schemes, market stalls and farm shops because they want to support local producers or a particular production system such as organic farming.
It is therefore important that purchased produce broadly meets some the same criteria (e.g. grown organically within 50 miles of the farm/ market). It is often advisable to be clear about what product is bought in, where it has come from and how it is grown. Certified Farmers Markets will require you to meet some these criteria as a condition of taking a stall. You should be prepared to explain why it is necessary to supplement your own produce.
Pricing is a major factor in generating a high turnover and successful traders take a flexible approach. Many have a ‘profit price’ which, as the name suggests, is the price they need to charge to ensure the business remains viable. This could be based on cost plus a margin, but most growers use some type of benchmark, for example supermarket prices, or published data such as the Horticultural Product Price Data from the Soil Association. Ultimately, experience will tell you what your customers are willing to pay
Many traders also have a ‘turnover’ price which is the minimum they are willing to accept to avoid having to take produce home or to compost it. A skilled market trader is constantly assessing the stock remaining against the rate of sales and adjusting prices accordingly.
Labels should be designed with this in mind. Many traders use laminated labels with a blank space next to the price, which can be filled in/ changed as appropriate using a marker pen or similar.
Managing customer flow
Meeting the producer and having the opportunity to ask questions is one of the main reasons people support direct sales. It is also important for growers to build personal relationships with customers and to get direct feedback on product quality, new products and prices. At the same time, a reasonably steady flow of customers, so that people are not queuing for longer than is reasonable, is essential. Talking to one customer while serving another, without appearing rude to either, is a skill all market traders need to master!
Keeping produce fresh
While maximising turnover is the most important element of reducing waste, keeping the display looking fresh and vital while it is out on the stall or on the shelf is also important:
- Keep everything in the shade as far as possible
- Stock rotation – never put new produce on top of old
- Use a mister to replace lost moisture and keep produce, especially leafy green, looking fresh
- Local produce to local people: Working together to supply a farmer market Horticulture Wales https://www.youtube.com/watch?v=Q8VpI0Utl9g
- Horticultural Product Price Data, Soil Association https://www.soilassociation.org/farmers-growers/market-information/price-data/horticultural-produce-price-data/
- Selling Food Direct Tool Kit, Food Skills Wales, Lantra https://foodskills.cymru/wp-content/uploads/2019/03/190326-Sell-Food-Direct-ENG-Toolkit-WEB.pdf
- The Farm Retail Association (formerly FARMA) A not-for-profit association of the best real farm shops and real farmers’ markets from across the UK https://farmretail.co.uk/