NATIONWIDE NEWS
Tips for farms on growing direct-to-consumer sales
The following information is provided by Nationwide ® , the No. 1 farm and ranch insurer in the U.S. Selling farm products directly to con- sumers is a way for farmers and ranchers to diversify revenue. There’s massive con- sumer demand for food products straight from farms and ranches. Direct-to-consumer agricultural sales got popular during the COVID-19 pandem- ic. Now, new resources and technology are broadening the different types of sales tools and strategies available to farmers. Selling direct can be a lucrative addition. U.S. farmers sell more than $10 billion in food directly each year. This includes fresh produce as well as value-added agricultur- al products such as meat, cheese and wine. Almost 148,000 U.S. farms and ranches sell directly to consumers. Decades of U.S. Department of Agriculture Economic Research Service re- search shows selling directly to consumers is also good for business in the long run. If you’re thinking about adding it to your op- eration, make sure risk management and business planning are on your to-do list. “Consumers increasingly want to match a face and name with the food they buy,” said Nationwide Senior Consultant Erin Cumings. “You can create a lot of revenue. Just be aware of the risks and precautions you need to take to be successful in the long term.” Options for direct-to-consumer farm sales include four relatively new ways to sell DTC agriculture products: • Produce and meat vending machines. They’ve been popular in other countries such as Japan for a while, and vending machines offer a new way to sell meat and produce directly to consumers without opening your farm or ranch to visitors. In some cases, customers can order from a self-service kiosk via a mobile device. • Community-supported agriculture, or CSA, cooperatives. When pooling resourc- es with other producers in your area in a CSA cooperative, you can offer consumers fresh produce and other products, often for a premium price. Customers typically sign up for periodic deliveries of “shares,” a set amount and a variety of products. • “Food box” or meal kit subscription services. Especially popular with younger food consumers, food-box services offer a variety of farm-fresh products. Similar to a CSA, customers sign up to receive a specif- ic amount and type of products in a weekly or monthly shipment. Whereas CSAs are more local, many food box subscription services are regional or national. •Websites/social media. In some cas- es, you can market farm-fresh produce or meat from your farm or ranch’s website or social media presence. It’s also a great way for your customers to interact with you. Some platforms have built-in sales tools. There are also companies that offer paid services to create online points of sale and build sales websites.
Make sure you know your risks and are protected. There are risks inherent to any DTC sale, whether your customers are coming onto your farm or not. It’s hugely important to make sure you’re not cre- ating liability for yourself and your farm or ranch. Nationwide’s network of Farm Certified agents includes many who have experience in DTC sales and help you through the process.
“There are personal liability and food safety concerns to think about,” Cumings said. “We have a network of agents who have a lot of farm experience with di- rect-to-consumer scenarios. They’re in your corner to understand your insurance options.” Talk to your Nationwide Farm Certified agent to make sure your risk management bases are covered.
Visit AgInsightCenter.com for resources and expert tips on trending topics to help you run a successful business and main- tain the safety of your operation. *A.M. Best Market Share Report 2022. Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2023 Nationwide
December 20, 2023 Ag Alert 21
Powered by FlippingBook