4 Tips to Prepare your Protein Farm for the Direct Market
When Farmers and Ranchers pivot to selling direct-to-market, they can often increase their margins from 30% to 80% (versus wholesale). However, before making the transition to direct sales, it’s essential to set your business up for success. Here are some tips to follow as you prepare your Protein Farm for the direct market:
Find Meat Processor to serve your Buyers
If you plan to sell exclusively to Consumers in your own state (intra-state), then Farms can generally leverage a State-Inspected facility to process your livestock. In some states, a Customer Processing facility may also be an option. In any event, start gauging access and availability of processing dates before committing to sell direct.
If you plan to sell to Wholesale buyers or across state lines (interstate), then Farms must utilize a USDA-certified meat processor. The Federal Meat Inspection Act (FMIA) requires that meat sold commercially must be inspected (and passed) to ensure the protein is safe for human consumption and has proper labeling (to sell across state lines).
When choosing a processor, look for the following best practices:
Vacuum Packaging. Air-sealed bags set the industry standard for how meat products should be packaged. Freezer paper-wrapped beef and other oversized plastic bags will not keep your meat fresh. Poor packaging can also hurt your Farm brand.
Cater for Different Cuts. Those cutting your meat must be skilled and should be able to give you the cuts that you like to offer to customers.
Review Documentation. Ask the Processor to see their Letter of Guarantee and the latest food safety audit. If they can provide these documents, they’re ensuring that the facility is up to code. If the processor does not have this paperwork readily available, it may be a cause for concern.
See the FSIS.USDA.gov website to find a meat processor that may be accessible to your Farm. If you have further questions about leveraging a USDA versus State-inspected or Custom processor, we encourage you to speak with the Farm To Consumer Legal Defense Fund.
Diversify your Cuts
It's important to know your buyers’ preferences when transitioning to direct sales. Less than 5% of Americans have freezer space to store quarter, half, or whole portions of an animal. By diversifying your cuts to fit buyers’ needs, you’ll sell more of your inventory and delight more customers with access to local protein products.
Not certain which cuts to offer? Send out a simple survey (via email or social media) to ask your customers their preferences. Unconventional Acres, a pastured-proteins Farm in Wisconsin, realized they consistently had leftover stock of their round roasts. After pivoting to sell round steaks, they sold out. Similarly, they noticed that they weren’t moving many of their hams, but after pivoting to sliced ham deli meat, it’s become one of their best sellers.
Create a checklist to ensure the entire animal is utilized and maximize your return on investment. Streamlining your cuts to fit buyers’ needs will be key to creating a thriving direct-to-market business.
Package Products for Success
Local supermarkets sell ground beef in portions of 1, 2, or 4 pounds per package. Packaging your meat to cater to different household sizes will be the key to your success. ⅓ of Americans live alone, ⅓ live in a household of 2-3 people, and ⅓ live in a group of 4+ people. Consider selling meat in a package that can satiate a household’s needs for a month (5, 10, or 20 pounds total). Individually, packages in your bundle should be assembled for common consumption: 2 - 4 quarter-pound burger patties, 1lb ground beef, Steaks of 6 - 18 ounces, and roasts up to 3-5 pounds.
With simplified portions and packages catered to different household sizes, it will be easier to move more of your inventory. Consider leveraging bundle boxes - offering multiple items in a single order to drive larger order sizes and offer a wider product range.
Charge a Premium for your Products
We work with 1000’s of Farms and know that those who implement a premium pricing strategy create consumer confidence and increase demand for their products. Cutting costs to compete against commodity products (like those found at the local grocery store) reduces your margins and negatively impacts your Farm brand.
More than 80% of customers will pay more for a locally produced product to support local businesses. By charging a higher price, consumers will better value your products, and you will improve your margins.
Pivoting your protein operation to sell direct requires preparation, but it will jump-start your Farm’s growth and sustain your business for the future. By following these tips, your Farm will be on its way to creating a successful direct-to-market operation.
Barn2Door provides an all-in-one solution to grow and manage your Farm business. If you’re curious to learn why successful Farms run on Barn2Door, watch this 5-minute video.