The Profitable Mini-Farm – Selling to Restaurants (E10) (FSFS273)

TPMF - E10 - Selling to Restaurants

[00:00:00] Diego: Welcome to the Profitable Mini-Farm. I�m your host, Diego. DIEGO. Each week on the show, I�m joined by farmer Jodi Roebuck from New Zealand to talk about what makes his small market farm successful.

Last week, we talked about selling to retail. Today, we�re looking at another wholesale option, and that�s selling to restaurants. Jodi�s going to talk about why he sells to restaurants and the advantages and disadvantages of doing that. Hopefully, this will give you some thought on how you can diversify your market streams beyond the CSA or the farmer�s market and take advantage of some of the restaurants in your area.

If you want to learn more about everything Jodi�s doing on his farm, be sure to check him out at Roebuck Farm, which I�ve linked to below. Before we get into today�s episode, a word from our sponsor, Paperpot Co.

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With that, let�s jump right into it: Jodi Roebuck on selling to restaurants.

[00:01:26] This week, we're hitting on restaurants as a market stream for small, profitable farms. When you think about restaurants, what are the pros of restaurants versus selling to retail, which we've hit in a previous episode?

[00:01:43] Jodi: I think probably the biggest pro for us is if they order something, they've purchased it, and you get paid. With our retail, we sell or return. So we're taking the risk on the possibility of items not selling there. So, with our current percentages of the business, we've still got the same restaurants we've had for five years.

We'd like to have them forever. They have hurting through covid, but although only 20% of our turnover is restaurants, they have priority on our orders, and so everything comes through wash and pack, single items get bagged up for a restaurant, it's always the best quality, and everything else, the 80% overflow goes to retail.

[00:02:29] Diego: Over the years, getting into restaurants versus retail, in your location, which one's been easier for you: to get into a store, to get into a restaurant?

[00:02:39] Jodi: I think they've both been very similar, and it's just taken time. There's a pattern with both of them that the stores and the restaurants we approached never really came on board. Again, it's a very simple kind of philosophy, but we go where we're invited. So all our restaurants approached us, along with our retail stores, and it did take, I'd say three seasons to pick up all of our restaurants.

We had eight restaurants at one point and just rewinding, when we started, we were the yes guy, and we had a couple of restaurants that were ordering really small quantities and in the beginning, we just had to say yes anyway. Like sometimes, it was $30.

And it was not until we moved forward with increasing our volumes. And also once, I think this is a nice fit for us, the restaurants these days that want small volumes off us, they're already shopping at our retail stores �cause that's where the quality is for the supply for the restaurants.

So they go into the independent fishery, independent butchery, Mediterranean supermarket, and our supermarket. So we're in front of a lot of restauranters that use our product that we don't have to deal with anymore, especially with small items, small volumes.

[00:03:58] Diego: Restaurants. What are the main keys� been for you in terms of getting into them? What do they wanna see and what do you have to provide as a grower to have success?

[00:04:08] Jodi: So very similar to all our outlets, but restaurants for sure, all our restaurants, we've toured the chefs on the farm so they can see and understand how we grow, how it works. They then appreciate things like 40% of our workers harvest post-harvest. So, they're not just�that makes 'em respect that they've gotta get their orders in time�we'll come back to orders.

If they want a salad mix, and they haven't gotten back to me with an order, and we've done all the single items, and it's time to put the mix together, that's it. That's our cutoff time. And I'll chase them again, but we're not picking salad out of a mix for them for a single item.

So yeah, we've really got them on board with understanding how the process works in wash and pack, and they also understand that they get priority on orders. So if we have big restaurant orders come in, that'll take a hit on some of our single item salads, which could mean on a day when we have big restaurant orders, we have less of one or two items to go in the salad mix. But that really doesn't matter �cause the mix is same ingredients, different ratios at every harvest.

[00:05:20] Diego: Do you ever run into that issue where you have a lot of trouble balancing retail and restaurant orders, or do you find that they've been complimentary?

[00:05:30] Jodi: No they're really complimentary. Just repeating, currently restaurants just 20% of our trade, but we still give them priority. I'd say it's been four years since we've missed delivery. And then if we see a gap coming, we're very proactive in communicating with them.

I'd like to move forward actually to the menus and having your name on the menu, this is something that we've got caught out with a couple of times. So I think it's really great value for the customers to understand where the food's coming from. And it's also great for the restaurant to promote that they support local.

One of our restaurants, I'd say they're our biggest�when I first took them Baby mizuna, I said to them, we can do this one year round, and they're a high-end restaurant. They left the mizuna in the chiller and didn't use it initially just to test how long it lasts, and they were happy that they would serve that up 10 days later.

And I said, that's great because we harvest twice a week. So the shelf life, the quality, the shelf life, and the service are the key things that the restaurant are all over and the communication that comes with that. So moving forward, when we delivered the mustard, and this is well over four years ago, they called it Roebuck Greens.

So it's on the menu and they�I don't know what it is they put on top of the mustard, but it's like it's not a dressing, it's a bit more substantial than that. And moving forward, we're doing the deliveries. We come into the next winter and I could see that the week coming up that we were gonna be tight on mizuna.

So I gave them a week's notice and I said, Hey, next week we're probably gonna have a gap. And they said, no problem. It doesn't say mizuna on the menu, it says Roebuck greens, just bring us whatever else you have. And so, we've just put together, you know what I call it a random mix, but we wouldn't never name it that we called it winter mix, and it was baby rocket, baby mizuna, little bit of cut lettuce and pea shoots.

And that kind of got us through that little gap. And then moving forward from there, our carrots, they named Roebuck Carrots. And I guess this was one of the better things that happened to us by them naming the dish after us, we took a look at a retail space as well and we name�we call our carrots at retail Roebuck carrots.

And it just reminds people that our carrots grown our way. And that's our point of difference. Also, the roasty mix, which is mixed root vegetables. We call that Roebuck Roasties as well. So it's not an organic certification, but it is definitely�people know wedon't use sprays and we're local. And it came from us with our growing methods.

That became something really positive with chefs using our name on the menu. We did come unstuck once with a restaurant that didn't even talk to us, put our name on the menu in the dead of winter with an item we never even told them we had.

So that's worst scenario, I think. I'm sure a lot of growers will identify with us. A chef doesn't even talk with you, and they've got you on the menu, and then you're not even supplying them that item. And then they've got something from the large food aggregators going out on a plate that says Roebuck lettuce or whatever. That's something we really work hard to avoid.

[00:08:53] Diego: Do you find that having your name on a menu has translated to the retail side? Is there a rub off from somebody seeing at a restaurant and then seeking it out at a local store? I know it's probably hard to track, but have you found that there's some sort of correlation.

[00:09:09] Jodi: Definitely. Yes. And it could work either way. You could be dining at the restaurant and go, oh, Roebuck greens carrots and some are our other items. And then find us at retail. And then you can buy those same products and take them home for dinner.

Or it could be the other way around. Where you find us in retail first, you start using our product at home with your home cooking and you start dining out, going to our restaurants. With all our education that we do, people coming into the region, the first thing that they do�so like our market garden weekend courses, the first thing that visitors do to the region is track down who we supply.

They book and go to our restaurants, and they also go find our retail stores to go look at our fridges and our supply and look at what that looks like.

[00:09:59] Diego: There's some different ways people keep restaurants apprised of what they have from online ordering systems, texting chefs with their fresh sheets, emailing them out, to just taking orders in person. What have you found is the best way for you and the chefs you work with to convey what you have with matching that to what the chefs want in a particular week?

[00:10:28] Jodi: Firstly, we have two, so we're twice a week delivery Monday and Thursday afternoon, but we have two restaurants that have a year-round standing order. So it's the same on Monday, same on Thursday. That's nice to have a couple of restaurants like that are consistent. So I don't have to do a lot of communication with them unless we're coming up to a long weekend. I'll prompt them.

Do you need extra? And it's usually a yes. In terms of ordering, it's very different for us in summer because we've got a lot more variety. One of our restaurants pretty much buys every item we have, and there might be a dozen crops, say that's Social Kitchen, we're purchasing twice a week.

And I found ringing them, for me, the most efficient way to get an order out of them. But also, I'll have the crop list written down that we have, and I'll run them through the list. Otherwise, if they're ordering 12 items without me prompting them, I find they'll miss something like 20 bunches of coriander, and then last minute they'll go, oh, sorry, dude, forgot. And they'll jump in. Can I get 20 bunches of Cori?

And we might already have put that package that ready for retail. And then we're like, oh. It's, yeah. So I find just direct talking with them to get the order works really well. It doesn't take much time. I can prompt them with a text, but generally, once we're into the main growing season, I do that by phone.

And then also I think the delivery is just as important with taking orders, too, because that's the time when I'm face to face with them, and I can give them updates what's happening on the farm, when things are gonna be on, or when things are finishing. And I also, I'm always asking them what their week is looking like.

And so I think just to jump in there, our restaurant orders are just based on bookings. So they don't wanna sit on product that they don't have allocated for dining. And the delivery is a key part on connecting with the chefs. Just taking a minute to check in with them, see how things are going, and look at how many seats they have booked for, let's say the upcoming weekend.

And sometimes, they'll have their orders in, I'll be on deliveries, and they'll have a ton more bookings come in. And that's usually fine because they can either go to our retail stores or I can drop back, especially with crops that are storage crops, like we've always got carrots in the chiller ready for them. If Tanya's going across town to pick up the kids or something, I think she can just drop in and top them up.

[00:13:07] Diego: With retail stores, you had a minimum order�not minimum order, but a goal, like you wanna be a thousand dollars an hour in terms of delivering. When you look at restaurants, how do you perceive those same type of�?

[00:13:20] Jodi: The thousand dollars an hour delivery is a combination of restaurant and retail. It took us years to� We haven't formally given our restaurants a minimum order, but we're going across town to all the same places in one hit. We expect a restaurant to be ordering a hundred to a thousand and minimum.

It's usually two over 200 each delivery, and occasionally that drops and that's fine because they�re consistent year round, long term with us. But the days have gone where we're doing 30, $40 deliveries. Those chefs are just getting us stuff from the retail store. And I keep in checking our retail stores by asking the store owners, because they know the restaurant trade well, whose purchase, which chefs, which businesses are coming in and purchasing from us as well.

So it took us seasons to get to a point where our restaurants that we do have on the box, that we deliver to, have a significant spend. And so we've only got four long-term restaurants now. We're actually not looking for any more restaurants. We're expanding our retail part of the business. I do like the restaurant trade. I do working with them. They've really been hurting through Covid, even the strong ones.

It's great for people, especially people coming from out of town, to experience local food in a restaurant. We're all about that. There's two ways to look at it. There's less risk with the restaurant because what they order, they purchase, but their orders can go up and down as well. And so to buffer that, it's our retail space covers that.

And I think just one little thing I've observed over the years with the public holiday, let's say it's a Monday, that really throws us out with our model. Currently 20% restaurant, 80% retail. Two of our retail stores are closed on that Monday and the Sunday, but I've still gotta deliver to the restaurants for Monday afternoon.

So I'll go across on a public holiday to restaurants as usual. They'll be slightly busier, and the supermarket will be getting hammered, too, but then I need to wait till the Tuesday morning to go back across town to deliver into our retail. And where I'm heading with this is things get out of sync sometimes for two weeks until they line up again.

[00:15:45] Diego: When you're at production capacity, you know you're producing as much as you can and it's all being sold. You said now you're not looking to expand restaurants, you're looking to expand retail. What's the driving factor between that? When would you choose retail over restaurants. Why is that?

[00:16:07] Jodi: I think it's just Covid. Yeah. Retail's been really good since it's always been good for us, but we've doubled all our retail since Covid. And we're in the restaurant trade for the long term. I'm really interested to see what that looks like in another couple of years.

I would say for the last two years, apart from the spell where the restaurants were forced closed, our restaurant trade has been sitting on average at about 55, 60% turnover of what it usually. So we can just see that retail for us gives us a lot of low risk, actually no risk.

The more uncertain the economy is, the more people are eating at home. They might not have that surplus cash flow to be going to restaurants or going out on holiday and that extra spending around. So retail's been really good.

[00:17:00] Diego: Got it. So it's more just the time of the world thing, like that makes sense in today's day and age, just to go with retail.

[00:17:08] Jodi: Yep, and I think going back, maybe three to four seasons ago, our business model, we're a 55, 60% restaurant turnover, and the remainder, retail. So that's definitely changed. What hasn't changed too dramatically is our crop choice. We're always doing some new crops. Beetroot�s been a new one for us the last two years.

And I think too, the biggest limitation for how much food or income you can grow on a given area is your market streams. And so we're seeing our market streams mature, allowing us to expand the volumes of generally our faster crops, carrots and tomatoes, too. But the fast crops, were lifting our volumes every season on not much more land because they don't need it. They grow quick.

[00:17:56] Diego: You talked about the days of $40 orders to restaurants. Those are long gone. What would you say to a new farmer if that's the only way you can get into a restaurant? Do you think it's worth the effort of going to several restaurants, doing small orders to get your foot in the door to gain that experience, work your way up thinking maybe, hey, this restaurant will buy more. Maybe I'll learn more about the restaurant trade. On the other hand, you could say, Hey it's probably a losing trade by the time you factor in all your time, just skip it. What do you think?

[00:18:33] Jodi: I think the former, that was our experience. You've just gotta be the yes person when you're beginning. You've gotta go that extra distance. We had a $30 delivery for a difficult chef that never paid us, and he always wanted it out of time with our harvest. And we did it. You're gonna build your experience, and you get used to the whole thing.

Can I grow this crop? Yes, I can. I can do it on succession, can do it consistent. Looking at how the whole restaurant industry works, the deliveries, I think for sure in every aspect of the business, when you start, you just say no to stuff�sorry, yes to everything. And whether that's being at a farmer's market that's not doing the ideal turnover or having to go out of your delivery run for a $30.

We did it all and probably we would've had to work out how to navigate that a bit more if it wasn't for our retail space taking up that slack. I think also the longer you work with the chefs, it's the same with retail, too. But the longer we work with these businesses, the more we understand how they work, the more we understand our production and the more comfortable that feels.

It's reassuring knowing your year round production and supply and not feeling under the pump that you don't have the product or that you're not under-producing or over-producing significantly. See, I think definitely say yes to everything in the beginning.

[00:20:02] Diego: What about in terms of setting boundaries? Like, the customer's not always�and there's a lot of times where some people are just difficult. And once you establish a policy, it's hard to walk it back. You talked about the one guy who didn't wanna pay you, and he wanted stuff on the day when you're not harvesting.

How important do you think it is to set just clear expectations in the beginning? Hey, this is a minimum order. These are the days I deliver. This is how I package product. And then not flex. I could see the tendency of somebody new, like you said, yeah, maybe you wanna say yes to everything, right?

But then you find yourself where one customer wants it on Wednesday, somebody wants it on Thursday, and before you know it, you've created a huge problem for your yourself. So how do you think, or how would you advise someone to think about setting boundaries from day one?

[00:20:58] Jodi: I think probably the easiest way to navigate that is by at first point of contact, inviting them to the farm and taking the time to show them around. So not only are we showing our chefs the crops that we're growing and talking about seasonality and harvest windows, we're all showing them the innovation.

Like, the chefs, they love seeing things like the greens harvester and the tilther and the precision seeders. That really helps 'em understand, or yeah, understand and envision what small scale growing looks like. And the extra mile that you're going to do the quality, wash and pack too. So we show 'em right through the farm. I think that gets 'em on board.

They understand what it is that's going on through their kitchen and on their menu. And we also tour a lot of our chefs each season, too. They want to see what's new. And in terms of crops, but also how's the farm going?

What's new? What does the new greenhouse look like? Or they wanna check in and see the progress that you are making as well. So I think all of our chefs have been through the farm and some of them, multiple times. And I guess this kind of leads into I think one challenge we have as growers working with the restaurant trade is, so that, I think it's pretty easy to understand local and quality, but seasonality is a big one.

And I think the it's good to, once you understand your harvest windows, almost be able to put that in writing to take to your chefs so that they understand, okay, Roebuck Farm only have carrots nine months of the year.

Beans are only in season for three months of the year. And by giving them harvest windows, it�s their choice then if they want to still do beans in winter and get 'em from Queensland, that's their choice. But it's not our name on that dish. And so that's one thing we check in with too, is we dine at our restaurants just to see what the whole experience is but we're also looking at how they use the food, but also what's the menu looking like?

Does it say�are they doing tomatoes during winter, and they've got your name on them and they're obviously not yours. So I think that's�I feel responsible for that. And I think also I wouldn't wanna be a customer dining, eating something that I'm told, but it's actually not. So yeah, we're pretty proactive on giving our chef seasonal windows.

[00:23:26] Diego: Would you ever custom grow for a chef? They want variety X. You don't normally grow it. Would you do it?

[00:23:39] Jodi: I think there's a big potential there, and I know a lot of grass listening probably do this. And it works for them. For us, I'll tell you couple of little stories. For us, we are always doing trials, but yeah, if a chef says to us, can you grow chives or whatever the crop is. If we don't do it, there's probably a reason we don't.

So no, the answer is no, but I'll try and find another grower or another supplier for them. We're really trying to work on what crops can we do year round and what crops are profitable for us and that we can, you know, also got consistent sales within the restaurant. So I'd say definitely salad's our main one.

The next, in terms of volumes, the next two crops would be coriander and carrots then followed by other root veg. And then in summer, cherry tomatoes are big at two of our restaurants, but the sales are much bigger in retail. Coriander is a real good one. And carrots. So, no short, we don't promise him something that we don't even grow.

And I'll just give you a little story here that the grower that wanted $30 delivery out of sync, he approached us to grow a head lettuce for him. And this kind of leads in�I got myself in trouble here, too. I take responsibility for it. But the first thing we are doing with chefs is asking, what volumes are you consistently purchasing?

Because if you don't ask that, you might go into the field and over plant something and then they're just gonna order a tiny volume. So we grew a head lettuce for a chef. This is the $30 chef that was late on payment all the time. And beautiful, it's called pixie green head lettuce. And I let him know that the lettuce successions are on, and he started ordering three lettuce heads a week.

And I was like, oh no, I've got beds and beds of this on succession which is fine, I just cut it into my salad mix and sold it elsewhere and basically dropped even entertaining that idea. If a chef come to you. So yes, we did. We have grown some crops that already fit our bill, but we had to scale.

So Social Kitchen years ago, I'm supplying them, and this is probably early spring, I'm supplying them salad. They said to us, can you grow us baby carrots? And I said, sure. What volumes are you using? And they said, 30 to 40 kilograms a week. And I said, I'm going home to plant them right now. And this is the positive of growing to order, if that�s the right term.

This is, we're now four years in, at least with Social Kitchen, and we do a lot of carrot production. Every carrot that we grow, that is grade one, goes to them, and they get total priority with that. They're doing such great volumes, we drop the price in our second or third season for them, and any carrot that's too small or too large goes into the retail space.

It's a really nice feeling knowing when you start your carrot season, that everything you're growing has got a sale at the end of it and of sticking with� So I guess that's looking back over the years, we took on crops that we had to scale. We said, yes, we grow carrots, but we haven't got the volumes, but we'll start planting them for you now.

Rather than these days, someone will come to you and say, or come to me and say, can you do this crop? And generally, it's a crop that's longer season, possibly perennial, and it just doesn't really fit our business model. I'd just like to jump in here with a carrot story, a story about carrots and then about coriander.

So the baby carrots we�re supplying to the restaurant, I asked them, could I see your carrots? And they weren't too happy with them. They had a one inch of green top on them, and it was summertime by the time we had our first carrots on to deliver to Social Kitchen, we're doing like 30 kilograms.

And so I'm presenting them the same with the inch of green on top. And our carrot variety that year had really weak tops, it was super hot, humid summer and nine outta 10 carrots were coming out the ground topless. So by the time I got their order together, feeling like I had a lot of waste �cause we weren't putting carrots in retail back then.

First thing I asked on delivery, and I think this is a key, keeping in insight working with chefs, I delivered to them and I said, can you show me what you do with them now? And they said, sure. And they snapped that green top off. And I was like, great news, �cause it's way quicker for me to process them without tops.

But also now every carrot in that size is for sale and sticking with the, increasing your sales by understanding how chefs use your product. I deliver a standing order to a restaurant twice a week, and they asked me to add in coriander. In the first delivery, I had the coriander sticking out the top of the crate.

And the chefs are very religious, and the chef grabbed the coriander, tasted it, and I could see the explosion of flavor in his mouth. And they�re always wuestioning me, am I a believer and so on, which is cool. They're really positive. Anyways, they tasted the coriander, explosion in his mouth, and I just hit him with, Jesus didn't do hydroponics, mate.

And that was my kind of way of connecting with him about his religion. And also helping 'em understand that hydroponics is not kosher. Anyway, they come back to me the following week and they said, we're completely phasing out of all hydroponics, and we're doubling our standing order from here on in with you.

My joke is that I converted them, and they're still working on converting me. The chefs are great. The more you can connect with them, take time with them, show them around your farm, Christmas time, I take them around from our farm and, we really like to work closely with them. The more they value not just the quality food, but the quality service that you offer them, and the fact that you go the extra distance for them.

[00:29:48] Diego: Do you find that they're flexible with your salad mix? If we go back, one restaurant says they're Roebuck greens, so they're on the menu. They're not defining what that is. Are the chefs�have they been equally as flexible across the board in terms of what's in the salad mix, knowing that there's seasonality and other things in there?

Or do you find that you are beholden to, Hey, it's gotta be like 50% lettuce, and we can put in some other stuff, but it's gotta be more like this? Are they cool with whatever you bring as long as the quality's there?

[00:30:26] Jodi: Equality and consistency, I'd say our first. Each restaurant's different. So generally, our microgreens pea shoots, the chefs are using them as a garnish, and it's interesting how retail people are buying them as just a salad. So, we don't yet have a restaurant using microgrees as a plated salad, which I think are an amazing salad.

So no, they're doing a mixed order of single items and mixed salad. They, generally, the garnishes, we're selling pretty good volumes of them, the garnishes. If I'm tight on let's say pea shoots, I'll let them know, and they'll pretty much say, all good, double up on the radish microgreens, or vice versa. That doesn't happen often.

And then by having enough restaurants, if I come back to wash and pack, and we've packaged all the single items, we've done the salad mix, everything's packaged, including retail, then we bring out everything out the chiller for restaurant, we label our crates, and we put our orders together.

At that point, if we've made a mistake like we've done too much salad mix, and we missed some bags of mizuna, we've got one or two restaurants that are flexible with how they use it, and so we can switch out their order, no worries. Whereas I'd say the restaurants that are heavy on the garnishes, we're not gonna replace a microgreens bag with a mixed salad for them �cause they're not gonna use a mixed salad as a garnish.

They're flexible if we communicate with them. I'd say that summarizes it. And also, in terms of bridging the gap, again, by taking my orders by phone, and I know two of our restaurants by quite a lot of coriander, let's say if I've got a gap coming up with cori, I might have 30 bunches left to pick, and then I've got two weeks till the next bed's on. I ring a chef.

I�d say, what do you need? Run through the crops. And I said, do you need coriander? And they say, no, we're good. I say, I've got 20 bunches. And then I've got a two-week gap. And they'll say, I'll take 'em. And so that Cori's good for two weeks. And so rather than putting the Coriander into retail, chefs take it, they sit on it, they get through to the following two weeks when I've got the next six session on.

Part of what I like about working closely with the restaurants is the communication, whether it's at the time of taking orders or delivery, it really helps increase sales as well in some aspects by prompting them where the possible gaps are coming up.

Carrots is the same, but generally, once carrot season's on, we're consistent, but say at the moment, carrot season's just finished, and I've got probably 50 kg of baby carrots in the chiller, and the chef's been talking with me in the tail end of the season. How's carrot season going? How many more weeks?

And I've told them I've got 50 kgs left for you. Depends on your orders. And the next carrots we've already planted, but they won't be ready till about the 10th of December. So straight away ,they know where the gap is, and when we're gonna be back with them.