The Profitable Mini-Farm – Selling to Retail Stores (E09) (FSFS272)

FSFS272 (TPMF09)

[00:00:00] Diego: Welcome to the Profitable Mini-Farm. I�m your host, Diego. DIEGO. If you haven�t tuned into the show before, what�s the show all about? Each week, I talk to market farmer Jodi Roebuck in New Zealand about what makes his farm successful.

For a large part of the show, we�re focusing on the in-the-field operations�planting, harvesting, and processing. But sometimes, we�ll branch off into the business side of things, and that brings us to this week�s episode �cause this week, it�s all about selling to retail. To stores.

Jodi�s going to talk about why he decided to do that, how it works, and his unique system of having a cooler that�s branded in each of the stores that he sells to. Hopefully, this one�ll get you thinking, give you some ideas on how you can get your crops in retail stores in your area. But before we get into today�s episode, a word from our sponsor.

Today�s episode is sponsored by Paperpot Co. Paperpot Co. is your source for all things productivity when it comes to farming. From the Jang Seeder to the Paperpot Transplanter, Paperpot Co. carries all sorts of tools to make your life on the farm easier by saving you time and labor on tasks like seeding and transplanting. Learn all about the tools we have to offer at Paperpot.co.

Now, let�s jump right into the episode. It�s Jodi Roebuck on selling to retail.

[00:01:34] Diego: At this point of your farm business, what percent of your sales are coming from retail?

[00:01:42] Jodi: It's changed each year, and Covid really changed it, but currently we're 80% retail, 20% restaurant.

[00:01:50] Diego: How would that have compared when you first started? Where was that percentage at then?

[00:01:56] Jodi: When we first started, we were just cutting our teeth. We were at two farmer's markets, and we had one restaurant and one retail store. And then moving forward each season, we kind of took on another restaurant, another retail store each season. Maybe we took, on average, if I just average it, two new restaurants a year and a new retail store each year.

[00:02:22] And then Covid, we took on the supermarket, and I probably mentioned this already, but when we started, we were advised not to, but we ignored that advice and we, we approached all our restaurants in town. We just turned up with free samples and nobody ever ordered from us. And really quickly, we set up a fresh list, which is what we currently have.

[00:02:50] Tanya was managing that, which meant I had to go around the field and, you know, itemized what we had. We'd put that up as a live document. We could see that restaurants were viewing. But not never ordering.

[00:03:04] Diego: Initially sending out that fresh sheet, you can see people viewing it. People aren't buying. What next?

[00:03:11] Jodi: Business Coach. Best thing we ever did. I'm really big on investing in good advice, and we're still doing it today with, we've got a financial coach now. So the business coach had been in agriculture, and he was also coaching a lot of the businesses that we're now working with. So he connected us.

[00:03:34] That's how we started with our first retail store. And I'll be super honest, I was really nervous about it. I kind of thought, you know, this is the big deal, the food act, we weren't registered at with it then. And long story short, retail's just been the best thing we ever did. And it's so cool working with great businesses that align with our values, our great people.

[00:04:00] We work super hard to bring as much value as we can to their business. And really quickly, our goal is to bring as much value to the business as we work with in many ways. Like we tour them on the farm, we host their Christmas work parties, we give them returned items that are still good for another week. So, you know, we give our returns, we're giving to front of house staff.

[00:04:24] And I'm hearing this cuz I'm the delivery person. I'm hearing all the time on the floor and shops and even the supermarket that people are changing stores because we are there. And so that brings a huge value, for instance, to the supermarket if someone's coming in just to buy our product and doing their complete grocery store shop at our supermarket, our store owners just love that.

[00:04:51] Diego: If you think about those early conversations you had with that business coach, one takeaway is, Hey, connections are everything, right? And so they were able to connect you directly with a potential customer who then became a customer. What else did they have in terms of advice for working with commercial customers?

[00:05:14] Jodi: He directed us towards this I guess principle that by stocking our items. So in retail, we have our own fridges. They�re ours, they've all been supplied for us. We branded them, and we can supply any item that we produce.

The fridges cannot be empty. That's kind of, you know, goes without saying. So the, the thing that's really working in that Craig had could see in the early days was it just becomes super convenient for the customers, and our items are complimentary.

[00:05:51] Diego: With the fridges that you have, can you explain a little more how that works?

[00:05:58] Jodi: We've been lucky that we've got four�three retails and a supermarket. All of our stores have supplied the fridge for us. And it's only our product in the fridge. And then we branded it. And then we�and I'd like to jump to the demographic of each of our stores before we move forward.

This is this is my starting point now, when we look for a new, or when we negotiate with a new outlet, too. That your storefront should really understand their demographics really well. And I'll run an order of the stores that we picked up. So we're at the independent fishery. They're called Eggmont Seafoods, and they're the only independent fishery within eight hours drive, four hours each way, so between Auckland and Wellington.

They�re a 30-year business, family business, 26 employees. They do wholesale, they supply, you know, the restaurant industry. They do some export, and they've got a storefront, a walk-in shop. And so the demographics here, they're open Monday to Saturday lunchtime. They get busier as the week goes on.

The quietest month of the year is September, and they have 1400 walk-in customers a week. 60% of them are moms and dads shopping, you know, for family, for dinner. 20% are retired people and 20% are ethnic. The average spend is $25 on fish, and they have a super wide range. And we work with them to understand if the customers are spending $35, and they're definitely buying our products as well.

So we wanted to increase our microgreen sales here, so we did a giveaway for the second half of the week. Everyone that spent $25 of fish got free microgreens. We did this in summer when they're growing six days and the following week, we saw a lift in our sales just straight away. Once people have tried a good product, they generally come back for it.

So that's the fishery, and we've nearly five years since we've been there. We've got a full vertical fridge. It's a, you know, single fridge, and there's probably six shelves in it. And same, they communicate with me by photographing the fridge and sending me a text image so I know exactly what's going on.

I don't have to�I used to ring them and they used to count product. It's just super easy to take a photo, tells them, you know, speaks a thousand words and yeah, Rachel from there texts me. We've been hammered, and I get this image of the fridge, and they're the closest outlet to us. If I need to, I can just drop down there within five minutes to keep 'em stocked.

[00:08:56] Diego: That store, would you call it a boutique store? A premium store? Think of the most expensive high-end grocery store that you can think of in New Zealand, call that a 10.

[00:09:11] Jodi: I would guess that they're sitting at a six.

[00:09:12] Diego: Are you the only produce for sale on that market?

[00:09:17] Jodi: In all our retail stores, yes, we're the only produce and then the supermarket, we'll come to that one, too. Same, we've got our own designated fridge at the beginning of the produce department.

[00:09:32] Diego: So I guess that's one interesting niche, right? Is you find, I'll call it a non-traditional grocery store, a butcher shop, a bakery, you know, something like that. Hey, they specialize in other stuff and usually when they specialize, people are coming in to spend more than they would at a grocery store and the people who like go to probably a fish market, a bakery, a butcher shop, like they're dedicated.

Otherwise, you would just go to the grocery store. And trying to get in there, I like that idea. So we'll get to that supermarket in a minute, but just finishing up on the retail.

[00:10:08] Jodi: This is something that might sound bizarre, but one of my mentors, Darren Doherty, he travels the world extensively with education and consults. I questioned him years ago, 10 years ago. I said, how does it work? You've got so much contact around the world, you know, How do you navigate lining up all of these opportunities?

And he just said to me, mate, we just go where we're invited. And we didn't like write, I didn't write that on my forehead or nothing. But that, just starting to think like that changed everything. Cause so remember we approached, you know, 15 restaurants, nobody's buying from us. We stopped approaching people and waited for people to approach us.

And I'll move forward with how we picked up our next retail store. So we're going now jump forward another year, we've probably got a couple of restaurants on the box, come back to restaurants later. We went to the Mediterranean supermarket, they�re called Vitro. We approached them, and they kind of said to us, ah, it's probably not the right fit.

Twelve months later, they came back to us and asked if we could supply them. And that's definitely high end. You know, they've got everything from beautiful wines, cheeses, beautiful meats, you name it, pulses, grains. And we started supplying them as well. And people�that's an interesting one.

So now we�re at a high-end shop. Generally, it's our salad people are after. It's not all the summer variety. We sell smaller amounts, but the, you know, a lot of people think or say to us, surely the high-end store is gonna be great for you. But we've seen it's actually being in front of everyone where the sales are the best.

So we started supplying them in winter and that's also a consideration with when you take on new outlets, where are you at with your capacity and what growing season are you in? So we've been there now nearly four years

So now we're at the Vitro, the Mediterranean supermarket, and we've taken on more restaurants and we�ve given up approaching people, and everyone's coming to us. Then we've got the largest independent butchery here. We've been on a TV program, which is very popular. It's called Country Calendar, and we were just cutting our teeth at that point when they filmed.

It was super popular. I think half a million people watched that first episode. And so I went into TLC Meats, and I knew Tony by name, and I introduced myself as a customer and just brought a heap of meat and when I walked into the shop, cause I really believe you can't do business with strangers.

It's much easier to do it with acquaintances or new friends. As I went into the store wearing my t-shirt, Tony's got an island in the middle of the store where he is breaking down lamb, for example. He took one look at me and he says, Goodday mate, I really enjoyed your TV program. Your meat would be better than what we can get.

And I thought, wow, that's�I think I've got a new friend here. So I was his customer. I brought some product. Thank you very much. See you later. In the following week, I went straight back. Now I'm not a stranger. And I said, Hey Tony, can I chat with you? And I said, you know, we supply Mont Seafoods.

These are our Ts and C's. It's been super popular. Would you be interested? His hair's like jumped on it. Two days later, we're supplying them. So, I've printed some branding. He's given us pole position in his refrigeration right by the till and just to give a little bit of perspective, the neighboring store is a wholesale budget vegetable store where they're not farming, they're just an aggregate, is that the right word?

They're purchasing and selling stuff. So, we were right next door to the vegetable store, same as were the only produce in TLC. And, you know, again, I would rate this store as a six. They're open seven days a week, which is awesome. They're in a big arcade next to the gym, so Saturday mornings, they get hammered when everyone comes from the gym, they go by meat and veg.

And the Saturday morning market that I was attending, sales were very low. But on my way home at lunchtime on Saturday, everything I hadn't sold�this was a game changer for me cuz I could just drop straight into TLC Meats and unload my product there, which meant, you know, I was now having less waste.

We've been there three years, I think. Sales keep increasing. We sell a wider range there, I would say. And that's our three retail stores. We've had them all out on the farm tour of them all, hosted their Christmas work events, stuff like this. And the supermarket, they approached us a couple of years before Covid, and I just thought this is futuristic.

I've gotta get big, I've gotta put up a massive greenhouse, take on a heap of employees and be, you know be as good as a motto we have in New Zealand, which I kind of disagree with. So, moving forward with that one, coming into our first lockdown, and New Zealand's lockdown was about 10 weeks. And you could only go out to the supermarket, otherwise you had to stay home.

You weren't even allowed to go surfing. Sam and I harvested for 14 days straight to queues of people in masks at our retail stores. We couldn't even get back into the field to plant. It was mayhem, and then everything shut. Everything was in lockdown. And this day four of Covid, the supermarket approached us.

They gave us a huge fridge. I branded it. I've always got extra branding you know, to advertise ourselves. So I branded the fridge, and day four of Covid we started supplying the supermarket, which was then the only place people could shop.

[00:16:30] Diego: In terms of building your brand and having people ask for your salad mix, what do you think has been a key to that? Like beyond quality? What's made your brand important in the food scene in your region of New Zealand?

[00:16:50] Jodi: Well, I guess prior to, you know, expanding our production, we used to be doing seed production and cover crops, really as a large-scale serious hobby, we developed a strong brand internationally with my travels. And so, you know, a lot of people were aware of our work. Back home here, once we started the market garden. This is my hometown, that's where I grew up. It's where all my supporters, my community, you know�

It took me 10 years to name the business, Diego, and Roebuck is my surname. It's the family name. And it took me all this travel to realize I'm the magic in our production, as every farmer is. And once I kind of realized that, named the farm after our family. Five generations here and all of my relatives, generations of them, have been business owners in the building industry. All different aspects of that.

So everybody knew who the Roebucks were. That was a huge advantage to us. I wasn't establishing on leased land in a new town where I didn't know anyone. So that's been really positive for us, and I think the sales weren�t huge in the beginning. Once people were buying our product, though, especially once we got it through our first season in retail, it's not just the quality, it's also the presentation, the shelf life and the consistency.

And I think being the consistency is maybe the small-scale market garden is perceived as, you know, by some of the larger players that like, well, we can't afford you not to have product. And yeah, we've never had our fridge empty and we�ve farmed through some pretty bad weather and weather bombs and stuff like that. Really quickly, it's the fast crops that get us out of that worst scenario.

[00:18:54] Diego: It's one thing to get into a store, it's another thing to stay there. What's been a key in maintaining your place in those stores?

[00:19:06] Jodi: Definitely consistency. And part of that, you know, that's everything we do on the farm, but for everything post-harvest and marketing and stocking fridges, I think it really comes down to communication, building that trust and also the understanding of the people you work with. Before we even supplied the fishery, they brought all front of house and their management team out to the farm.

We had a lunch, and we toured them around the farm. So that's a huge advantage to us because they understand how things work. They know what it looks like, it takes the unknown away, and they can communicate that, the front of house, with their customers, too. People might be asking questions like, do they use sprays?

Where is the farm? When will they be back on deliveries? And the delivery part, and it's the same for restaurants, too, there's a lot of communication going on. If I'm away for a weekend event, I'll stock them heavily on the Thursday. And I'll let everyone know on deliveries, I'm out for the weekend, the fridge is packed full.

I'll be late back on Monday delivery. Or for example, I can say, well, we're harvesting over the weekend. I'll be back first thing Monday morning. One thing we never want is a customer to come into our retail store, primarily to buy our product and accompany it with some fish or quality meat, and our fridge to be empty.

And for them to be let down as a customer. And then for them to put that inquiry or even pressure onto our front of house retail store. Like, where's the product? When will they be back? And so, at the very worst scenario, if our fridges are low. My front of house understand, he'll be here by two o'clock, stuff like that.

So communication's just really big, and they're building those relationships with people. I think that's the reason you know, we have longevity in our stores and kind of moving forward, my goal is for the rest of my farming career to be in these same stores. I would like to look back, when I'm on the Zimmer frame and be super proud that we supplied these stores for, you know, multiple decades. That's kind of my measure of working with great people, being the success.

[00:21:33] Diego: given your experience with getting a fridge into these small retail outlets, if somebody wanted to do that in the States, you know, how would you suggest they bring that up? What are the points you'd wanna highlight to a retailer?

[00:21:52] Jodi: I think the points to highlight are the value you can bring to their storefront. The convenience, they don't have to shop at lots of different outlets, and the quality.

[00:22:10] Diego: Another point is, make this as easy as possible for you. You just give us the space. It'd be great if you could provide the fridge, but in some cases I could see, hey, it'd be worth doing even if the farmer had to provide the fridge. And all we need you to do is take a photo, what, a few times a week? And we'll come back, restock it, make sure it's full.

If there's customer issues, you know, we'll make it right. So it's really them trying to value add some of their store space, the square footage they have in their store, and they're trying to bet, I guess, on you versus something else they could put in that little six square feet.

[00:22:51] Jodi: Yeah, like the fish shop. They have lots of other items frozen in the freezer. They have eggs, they have spices, they have free lemons to go with the fish, and they have, you know, frozen chips, stuff like that. Our fridge, and I guess this is part of the retail too that our fridge, the sales are consistent, but we can just get hammered.

Like our fridge at the fish shop can get completely cleaned out in 24 hours, or it can be slightly quiet. Generally, when the weather's beautiful, fishing's a bit easier. They have more fish in store and our sales are higher.

The other thing with now having the three retail stores in the supermarket is if we do have a quiet spell, I can go across town, remove product from a store that's closing, let's say Saturday lunchtime, and I can go put it into one of my stores that's open seven days.

So as I'm going across town on deliveries, I have an estimate, but I just have my total harvest ready to go. And I kind of work on the shopping patterns that I understand what the weather's doing, is it a public holiday? Is it school holidays, stuff like this. And I stock my fridges. Generally, I come home with my fridges maximum full, no surplus. If I do have surplus, that's fine. Let's say I'm stocking fridges, and I then I will prioritize putting my perishables in and keeping my storage crops to return home.

That can go in on the following delivery. And sometimes it's like just going back in two days� time to restock a fridge, like at the supermarket, to keep it you know, the same as a farmer's market pile it high and watch it fly. That's exactly the same for the retail space with fridges.

[00:24:53] Diego: How big is the fridge?

[00:24:56] Jodi: The supermarket fridge, it used to be three bays, now it's two. So it's a standard two bays, six shelves in each side. I might be stocking 180 items to top the fridge up, probably two and a half, $3,000 of product in there when the fridge is full.

[00:25:17] Diego: Yeah, that's what I was actually gonna ask you next. So in a given fridge in a given store, you're probably two to $3,000 of product in there, and if you can sell through it a week, you know that's two grand a fridge every week.

[00:25:33] Jodi: Yeah, so the supermarket fridge is twice the size of the fisheries. and then the two other stores we have, we don't have like a vertical fridge with a closing door. We have open refrigerated shelves, which is nice cuz you don't have to like, you know, I know it's a little detail, but customers don't have to open the fridge.

They can just grab it, and then they have sliding rollers that come down overnight to close those off. So yeah, two stores are open. So we've probably got two grand, two and a half grand in the supermarket at any one time, and a thousand dollars in our three other retail stores at any one time.

And on average, it's deliveries twice a week. But if I get that, if I get the photograph, you know, and all the texts, �we�ve been hammered,� I'll be straight back there. And we've always got opportunity, like it might not even be harvest day to put some single items in. So the salad mix, you know, that's the big harvest and putting aside restaurant orders, single items, before we do the mix.

We're not gonna go repeat that to top up a fridge, but I can jump in the field and harvest some single items like pea shoots, coriander, root veg, anything that's a couple of days ahead with the fast stuff, put them together and be back pretty quickly.

So yeah, two weeks ago, I got the text from Mont Seafoods, you know, I'm stocking that fridge full. And twice that week, I got the text within 24 hours and the fridge was cleaned out. There's just some storage crops left. And so I'm able to be straight back there. Not with generally the salad mix, but with all other single items.

[00:27:11] Diego: Has there been anything you've tried to put in the fridge that just does not work in this model?

[00:27:17] Jodi: That's a great question. I� Absolutely, so we're in dairy farm region, and so a lot of the dairy farmers grew turnips as fodder for the cows. So the Tokyo turnip, that's just a nightmare. You know, people talk about turnips and radishes being super profitable. For us, they're good because they�re fast.

The only way we've been able to sell turnips, and this has taken a while, is by combining them with other root veg and yeah, the microgreens have taken, I'd say years to increase our sales. Quick thought with the micros, I'm talking with restaurants at the moment, restaurants are really using our microgreens as a garnish, but it's interesting, you know, this is our sixth season.

The retail space, over the years, our microgreen sales keep increasing into the retail customers. That's the only space where our customers are buying microgreens as a ready-to-go salad with a dressing. And it's probably one of my favorite salads, you know, it's beautiful and fresh. So we're trying to get our restaurants to use the microgreens as a salad rather than a garnish.

So it takes time to increase your sales. A lot of communication. And then sometimes, I'll throw a couple of things in here. We don't do head lettuce, but we just did a bunch of head lettuce, and I may have mentioned this in a previous episode. I'm doing some of Ray Tyler's online stuff, which is fantastic.

And you know, Ray had, let's say five colors of head lettuce going to the market, and one of the greenhead lettuce wasn't popular. And so he changed the name on that lettuce to burger lettuce, and then that became his most popular lettuce at the market. So we stole this idea or appropriated it�I didn�t steal it, and we put burger lettuce in the supermarket, and it would just went like hot cakes.

Some things take time to be able to sell and then sometimes, it's not the particular product, it's the shopping patterns. And so really, to average things out, it's not the high-end stores where we get hammered. It's being in front of everyone. And that's part of our protest against industrial food is that well, we're on a mission to support local growers to be in retail space everywhere you know, to popularize local food.

And I think being in the supermarket, it's just been amazing, seeing the response. We, when I train a new grower, the first thing I do after harvest is take 'em on the full deliveries so they can see all of our outlets, how it all works, who we're working with, and they're pretty taken aback. We kind of get treated like rock stars, and we're definitely thanked by people, by our retail customers that we're meeting as we're stocking our fridges.

And so, sticking with the fridges, and the supermarket included, nobody has to do nothing in terms of the store owners or the produce department. I stock and rotate our fridge. I make it look, you know, full and abundant all the time. And by me working the stock rotation, we have very little returns. And I speak with a lot of growers getting into the retail space where they may deliver salad mix in bulk, and then the out the store will package it and present it.

And they have some issues there. So everything's branded. All our packaging has our brand on the front, so it's obvious it's ours. It's not gonna get lost and mixed up with other stuff. And by me being the delivery person, there's not ever gonna be you know, old salad mixed up at the back of the fridge, for example. And the presentation.

I maximize each shelf, and you just get to learn your fridge sizes, your product you're putting in, how many in a row, how to maximize the fridge so you can get as much in there as possible. Or if you�re little light, to still make the fridge look full and abundant.

I really enjoy the deliveries. Once Tanya's full-time, my partner's full-time on the business, too, she'll probably take over the deliveries. I went into one of our restaurants once, the restaurant we do the largest sales to, you know, I've got a trolley, and I'm walking in multiple crates to all of my stores and also to this restaurant called Social Kitchen.

I come in for deliveries and the business owner says to me, Jodi, why don't you just employ a kid to do deliveries and I was like, Karen, because then I don't see you, and I don't get the updates, and you don't see me. And we don't build our, you know, we don't keep the strength between our businesses going. So it is a key part for what we're doing is the delivery.

[00:32:36] Diego: When you put something in the fridge at one of these shops, are you picking the price or does the retailer pick the price?

[00:32:46] Jodi: No, we set the price, and we've never put our price up since we started.

[00:32:53] Diego: At this point, what's the limit to expansion? Is it, there's no more stores that would fit, is it, you can't keep up with production for the stores you do have, or, Hey, we're just content doing what we do?

[00:32:10] Jodi: I'm keen to push the envelope on our total land area, which is probably three quarters to one acre. We're not there yet. My take with it is our limitation is not the volumes we can grow. It's our market space, and so our stores we've had for three to five years, sales keep increasing.

If we can take on another supermarket, we just lift the volumes on what we're doing, and if we dropped all our other items that we grow and just become a mixed salad business, the potential�s just untapped. Like if we were an acre of salad, and let's say we have three more supermarkets, that's gonna be much more profitable gig for us than bunching coriander, spring onions, pulling carrots, trailing cherry tomatoes, all summer, cukes.

And same kind of look to really simplify it, too. I'm not interested in folding the farm and going big with microgreens and doing whatever, 2000 trays of micros a week. I really like the mixed activities on the farm. We are not doing anything too long before it's time to switch to another job.

So the micros are great for us, not interested in just becoming, you know, just a microgreen business. So, yeah, to come back to that question, the biggest limit, the biggest opportunity is as your sales, your market streams.