Final Report for CNE07-032
Project Information
The economic situation for small farms in much of West Virginia and the part of south central Pennsylvania contiguous with West Virginia (Blair, Bedford, and Somerset counties), requires that the owners be on the lookout for whatever they can do just to keep up. Small farms feel increased pressure and competition much more than larger farms do, and these constraints have made them in general more hesitant to try something like value added because they see that there is risk involved and that it creates a delay in cash flow.
Yet despite the multiple challenges, in 2006 at the time we submitted this SARE proposal, nine farmers in West Virginia and Pennsylvania expressed an interest not only in learning about value-added but also in trying it on for size because as a part of this grant they could minimize the risk, the financial outlay, and get some solid assistance with marketing.
This SARE initiative provided the opportunity for these farmers to become working partners with Collaborative for the 21st Century Appalachia and northeast SARE and in this way to develop the sweat equity needed to finance their value added processing. The learnings from their efforts then became a model for others to benefit from.
To clarify for farmers both the financial risks and advantages of value added.
To provide information and coaching about growing and processing for value added, as well as e-commerce and financing, marketing and branding.
To create a cadre of working partner farmers who try value added to see its relative merits.
To assist the agricultural community in connecting with the resources needed to make it happen which include the processing plant and risk capital.
To track the efforts of this group of farmers and capture the lessons learned.
To have that same group of farmers share their learnings with others in the agricultural community.
To assist farmers to find and/or create a market especially for larger order demand.
This proposal incorporated a systems approach to these farmers value added products, because it took into account that as important as it is to get some help with the production costs, without assistance in marketing their products, these farmers would not be much better off. The particular power of this proposal we believe, is that it used as consultants culinary experts to pre-test before production the product concept and employed their connections to expand the demand side.
As a result of this initiative nine partner/farmers after consulting with our team of chefs as to potential “hot ticket” items that they might make as value added products, then planted, grew, harvested the requisite farm product, had it processed, learned about branding and marketing, marketed and sold the product. Some were highly successful in terms of taking product that had no longer had any commercial value and would have been thrown away and turned it into cash. Others took product that could have been sold as a commodity and (after processing) earned a higher (to significantly higher) net dividend for their efforts.
Research
This initiative approached the issue of value added from the standpoint that as important as it is for these farmers to get some help with the production costs, without assistance in marketing their products, they would not be much better off. The particular power of this proposal, we believe, is that it uses as consultants culinary experts to test out the potential products and then employs their connections to expand the demand side, especially by enlisting those who can buy in quantity.
Milestones and roles of participants
In the Partner Farmer/Model Site Phase, nine farmers (six from WV and three from PA) assumed the role of working partners--which means that by growing the pilot crop as part of this initiative, they earned $900 of “sweat equity or capitol.” This amount then was put toward defraying approximately 80% of cost of the value added processing.
In the Training Phase, farmers were provided an additional $300 stipend as a “scholarship” for training at Gourmet Central. This training was provided by Gourmet Central’s staff as well as by NCIF who worked with participating farmers to create appealing branding/labels and other aspects of marketing. By way of Financial Support, in order to assist the farmers in overcoming the hurdle of the lack of access to a processing plant, this project also provides mileage reimbursement for the farmers to transport their product.
The Outreach and Informational Phase of this project then consisted of a series of six dialogue sessions (three in each state) in late spring and summer. Each session brought together those farmers potentially interested in value added with chefs and the local “partner farmer(s)” to explore the value added approach and the entrepreneurial prospects and the potential financial advantage. The intent is to create a network of interested individual.
Another extremely important component of the grant was the mid-summer 2007 and 2008 Pierpont Community and Technical College Value-Added Fair. These events brought farmers and their products onto the campus to meet with a group of area chefs as well as culinary students to discuss ways to add value, as well as to find recipes, for the farmers’ products. Meeting these chefs will also provide the farmers with an opportunity to market their wares to chefs as customers who can buy in quantity.
A series of presentations were made about what was learned through this initiative to organizations including:
In Pennsylvania: the Appalachian Fruit Growers, and the Penn State University Cooperative Extension Agents.
In WV that list includes WVU Extension Agents, as well as multiple presentations at Mountain State University Annual Symposium which draws people from a multi-state region. MSU participated by providing for several presentations on value added and the findings of this initiative. Summaries for those presentations are provided here.
After providing farmers with information about both the financial risks and advantages of value added, as well as coaching on e-commerce, financing, marketing and branding, we created a cadre of working partner-farmers who tried value added to see its relative merits. That production model tracked the efforts of this group of farmers and captured the lessons learned which became guideposts for others as these farmers shared their learnings with others in the agricultural community.
Here is a summary of the effectiveness of their initial efforts:
Calvin Riggleman, Bigg Riggs/ Smith Orchard, Loom, WV
Beginning Idea: To make Bloody Mary Mix using his great-grandmother’s recipe with Smith Orchards’ tomatoes.
Product(s) Made: Bloody Mary Mix, Vodka Sauce : thanks to the input from the chefs
- A combination of first and second quality tomatoes were used. 1200 lbs tomatoes valued at $600.
Results: The products are selling extremely well at the farmers’ markets. A batch of 200 jars sold out in a little over 3 months.
Lessons Learned: Offering free samples is the most effective marketing technique.
Based on Calvin’s experience to date, he would make the same products again next year and plans to add another product – BBQ sauce. When asked how likely he was to make value-added products when investing his own money he said “200% likely!” The SARE grant enabled him to explore new value added products and encouraged him to try new ones next year.
Consumers love a story. (For example, His great grandmother’s recipe)
Mark and Laura Glascock, Glascock Produce, Berkeley Springs, WV
Beginning Idea: The Glascocks wanted to utilize their heirloom tomatoes, a primary product on their farm, in a high demand value added products.
Products Made: Polish Liquisa Pasta Sauce and Bloody Mary Mix
Gourmet Central and the chefs were very instrumental in helping the Glascocks identify and develop their value-added product.
Costs and Income: Twenty bushels of first and second quality Polish Liquisa tomatoes were used to manufacture the value added products.
Mark valued the tomatoes at $0.01/lb. as they were left over tomatoes from the weekend’s farmers’ markets destined to be fed to cattle.
Results: They sold out of both products in 3 weeks for 998.
Lessons Learned: Their most effective marketing techniques have been “telling the customers that we eat it ourselves and providing the customers with recipes.”
Mark and Laura feel that this project was “definitely!” a worthwhile investment for SARE.
They plan to make these products every year. Additionally, they hope to make a peach daiquiri mix with their peach crop.
Steve Martin, Church View Farm, Romney, WV
Beginning Idea: The Martins’ goal was to make high demand, yet unique value added products using their tomato, sweet pepper, and hot pepper crops.
Product(s) Made: Based on web research and what they thought might sell at the farmers’ markets, the Martins decided to make: Bloody Mary Mix, Green Tomato Chow Chow, Habanera Hot Sauce
Costs and Income: Using both first and second quality produce, Martins used 600 pounds of tomatoes, 100 pounds of sweet peppers and 10 pounds of hot peppers valued at $1.00 per pound. Processing cost thus far averages $1.70/ jar with a retail price of $4.00/ jar.
Results: Two-thirds of the products have been sold…thanks to a busy holiday season. The remaining third will used “to kick off the next Farmers Market Season”.
Lessons Learned: Value-added products are crucial to extend their season.
Farmers’ Markets and Festivals have been a very effective marketing tool as “when samples are given, sales are higher.”
Market, market, market. Church View Value Added products are also marketed on their own website, on localharvest.com, on WVFarm2U.org, and displayed in a coffeehouse, indoor market, and local Civil War Museum’s Visitors Center.
Without the SARE grant, they would not have been able to make three products. In the future, they plan to continue making these same three products and are considering additional products.
Eric (& Kathy) Johnson, Morgan Orchard, Sinks Grove, WV
Beginning Idea: To make a pie/cobbler filling with the grant. Market research had shows that a traditional 20 oz. can of pie filling sold in grocery stores tends to make a shallow pie. Their plan was to make a larger, 32 oz. can for a larger, more pleasing pie.
They generated this idea from orchard’s previous owner’s experience and their current customers.
Product Made: Collaborative 21 C’s Chef Hawkins was helpful in identifying blackberries verses other options.
Four Blackberry-based value-added products were manufactured with 36 gallons of first quality berries at Gourmet Central. Berries were valued at $3.00/ pint.
Results: Products “selling well for the off-season.”
Products are marketed through their website, email and phone orders.
They plan on making these products and other value-added products next year when they are investing their own money as they have found value-added manufacturing a very beneficial investment.
Lesson Learned: Predicting what consumers will buy requires one to “think outside of the box”.
In order to make money when making Blackberry Pie Filling next year (using their own money), the Johnsons’ will have to market it at a higher retail price.
Dillon Fuller, Dillon’s Digs, Augusta, WV
Beginning Idea: A suggestion of Pumpkin Syrup came from Dillon’s grandfather. The product is designed to be used on pancakes, on ice cream, “anyplace you’d use syrup,” etc.
Product Made: Thanks to his grandmother’s artistry in the kitchen, a recipe was developed for pumpkin syrup.
Costs and Income: Initially, Dillon had 250 pumpkins valued at $3.00 each available for processing, however, by the time the pumpkins were processed only 50 remained.
Results: The syrup is “selling great." Thirty bottles have been sold in just one month.
Dillon is marketing his pumpkin syrup directly to family and friends. Plans to process peppers next year in addition to pumpkins.
Lessons Learned: There is a need for strong communications when setting up processing schedules so that product doesn’t go bad before it can be processed.
“We learned a lot about how to grow, process and sell pumpkin products”
Rita Resick, Laurel Vista Farm, Somerset, PA
Beginning Ideas: What to do with last fall’s onion crop that didn’t get harvested? Till it under or make a value added product?
Product Made: Somerset Sweet Onion and Garlic Jam was manufactured with 50-60 pounds of third quality Somerset Sweet Onions.
The product was very similar to a family friend’s recipe; however, Rita decided to use Gourmet Central’s recipe to speed up labeling and product development.
Costs and Income: Rita valued the third quality onions at $0.10 as the onions were scheduled to be tilled under.
Results: The product is selling very well.
They market it in mainly in grocery stores (where they have an existing working relationship for their fresh produce crops), to family and friends and at special events/festivals.
70% of the product was sold in 5.5 months. Only one case remained after 8 months.
Lessons Learned: Based on their experience to date, Laurel Vista Farm would again make Somerset Sweet Onion and Garlic Jam.
Additionally they hope to make more products. They are considering Dilly Beans, Onion Salad Dressing, and/or Onion Relish.
The SARE grant has provided Laurel Vista Farm with a tremendous opportunity. As Rita said “We would never have gotten this far this fast without the grant.”
Chris Wise and Rita Wise Biddle, Friends Farm, Williamsburg, PA
Beginning Ideas: Make Pickled Dill Green Beans or Pumpkin Pie Butter
Product Made: Pickled Dill Green Beans because “this is a recipe that we’ve made for ourselves in the past, really enjoy, and think others will like it also.”
4+ bushels of first quality green beans valued at $10/half bushel were taken to Gourmet Central.
Results: The beans have been processed by Gourmet Central. Final labeling to be completed before March 1, 2008 and the product will be picked up in early March.
Lessons Learned: If Friends Farm continues to make value added products in the future, they are “going to have to make it someone’s job to oversee it”. They found that the project, “while a fantastic opportunity, seemed to get pushed to the side.”
Future success with off-farm processed value added products will require dedication and stronger communication skills between Friends Farm and the processor.
Would like to look into adding salsa products, apple butter and pumpkin pie butter.
Luann Hinish, Hinish Farm Market, Roaring Spring, PA
Product made: Applesauce. The chunky hoped/expected that the texture would help differentiate the product.
Costs and Income: Twenty-five bushels of JonaGold apples, valued at $125 were sent to Gourmet Central for processing.
Results: “Sold very well over Christmas holidays," but dropped off after.
- Will continue to make value added products in the future.
- Applesauce is a “commodity” item. It is difficult to demonstrate to the public that any applesauce is gourmet.
Francis Meadows, Spring Creek Farm, Craigsville, WV
Beginning Idea: Spring Creek Farms plans to use their heirloom corn, Bloody Butcher Corn in the value-added product.
Product Made: 500 to 600 pounds of Bloody Butcher Corn will be ground at Stonewall Jackson Mill. It will then be taken to Gourmet Central for packaging into corn meal mix and polenta packages.
Challenges/Lessons Learned: Having the corn stone ground and ground at a historic mill added even more value to the product.
Having a recipe from a well-known chef on the package added value.
Having the story about how these seeds had been handed down for 7 generations made people interested and eager to buy.
Education & Outreach Activities and Participation Summary
Participation Summary:
Face-to-Face
One important aspect of the outreach for this initiative consisted of a series of dialogue sessions in both West Virginia and Pennsylvania in spring and summer, 2008. These sessions brought together interested farmers, the local “partner farmers” and chefs to explore the entrepreneurial prospects of value added—its risks and the potential financial advantages of value added. A media consultant worked with the Various media to get the word out.
TV and cable
In West Virginia, Dale Hawkins, the Executive Chef at Stonewall Resort who is deeply committed to this issue and has continually volunteered his time to present at the information sessions has a weekly TV show on the local Bridgeport, WV (CBS) affiliate. Chef Hawkins used various value added products into his cooking demonstrations and integrated information on how otherwise waste product can be made into value added.
Radio
Local stations were very helpful by providing public information announcements thereby getting the word out about the dialogue sessions.
DVDs
Pierpont Community and Technical College in partnership with C21C with funding from a USDA-CSREES grant produced a video module specifically on the basic economics and marketing of value-added products that is currently available that captures all of the learnings of this grant as well as the significant expertise relating to value added of the late Harv Christie.
Special Events and Conferences
Pierpont Community and Technical College Value-Added Fairs. In mid-summer 2007 and 2008, Pierpont held Value-Added Fairs that brought farmers and their products onto the campus and into the culinary areas to meet with a group of area chefs as well as the college’s own culinary students to discuss ways and find recipes for adding value to the farmers’ products. Meeting these chefs will also provide the farmers with an opportunity to market their wares to customers who can buy in quantity. These Fairs were widely publicized in through all of the college’s media outlets.
A series of presentations were made about what was learned through this initiative to organizations including:
In Pennsylvania--the Appalachian Fruit Growers, and the Penn State University Cooperative Extension Agents.
In West Virginai that list includes WVU Extension Agents, as well as multiple presentations at Mountain State University Annual Symposium which draws people from a multi-state region. MSU participated by providing for several presentations on value added and the findings of this initiative. Summaries for those presentations are provided here.
Summaries of Lectures Funded by the Collaborative for 21st Century Appalachia
SARE Value Added Grant
Presented at the
Mountain State University Medicinal Botanicals Program Appalachian Opportunities Symposium, Beckley, WV, March 8, 2008
Adding Value to Green Business
Marilyn Harrell
The promotion of enterprises to add value to natural resources, such as forest products and crops, is a way to provide alternatives to depressed rural economies in Appalachia. Forest-based initiatives provide financial incentives to small forest landowners to practice restorative forestry, while developing high value wood, non-timber forest products, and value-added products. At the same time, locally owned, value-adding infrastructure such as shared-use commercial kitchens, farmers’ markets, and business incubators enable hundreds of people to go into business for themselves which diversifies rural economies, generates assets and keeps local communities local. This lecture reflects on the importance of developing value-added natural resource enterprises and value-adding local infrastructure to promote business opportunities and asset creation in rural communities in Appalachia. The lecture also discusses market creation and market accessibility for sustainable, local, culturally-significant products, and describes sources of funding for expansion of locally owned value-added business.
Direct Marketing for Small farm Development
Tom Clark
If value-added is defined as the process of increasing the consumer appeal of an agricultural commodity then roadside stands, community support agriculture, and farmer’s markets are sort of value-adding activities. The roadside stand is a direct marketing activity where growers, instead of having consumers come to the farm, they bring the farm to the consumers transporting the farm products to a selected location. In community supported agriculture (CSA) the grower sells shares of what the farm produces to a subscriber, who pay the grower for the boxing, packaging and delivery of the farm produce. A farmer’s market is like roadside stand but formed by several stands in the same area. A farmer’s market is a group of growers in a public space that generally has more products to offer than a roadside stand and generally is much more organized. The main advantage is to have a lot of growers joined in one location, offering more variety, and with more variety comes more customers. This lecture stressed the importance of making farm products more appealing to costumers through direct marketing alternatives such as roadside stands, community supported agriculture and farmer’s markets. The lecture also discussed legal issues and liability risks growers confront when they direct market their produce using these three models. The lecture informed about consumers becoming more aware of the origin of the food they consume and their willingness to pay higher prices for local fresh produce, including many value-added items.
Preparing Herbal Salves and Lotions
Melissa Dennison
Value addition can be defined as the increase in value of a product through processing. For example, a grower can harvest an herb and sell it directly to a costumer. The grower can reduce the price of the herb if it is harvested by the buyer, in a “pick-your-own” option. Or the grower increases his/her profits by processing or adding value to the herb. The grower can dry, ground, encapsulate, and extract the herb, each processing step bring higher and higher profits. Herbs harvested and sold to intermediary markets have a low economic return but when they are processed and get to the final markets, they bring the maximum returns. For small Appalachian agricultural business this knowledge is essential, as processing will improve product value, increase profits, which will alleviate the economies of rural communities. This lecture discusses the properties of medicinal herbs used for the natural treatment of skin problems and teaches how to prepare skincare herbal products. The lecture stresses the importance of processing as a way of increasing value and gives step by step instructions on how to prepare, label, and pack salves and lotions for local retail sales.
Herbs for Health and Profit
Michelle McCune
Would you like to increase the profitability of your herb farm operation without increasing the production area? You can increase the value of your farm product in a couple of ways. One is by changing the genetics of the herb. For instance, you can develop a strain of the herb that has higher contents of an organic compound or a strain that has roots twice the size of the standard herb. Another option is to add value to the herb crop in order to make it more attractive to the buyer; this usually involves processing. Consumers usually are willing to pay an extra cost for products that are not only effective but also presentable and palatable. Therefore, growers wanting to increase profits should consider investing the time required to process herbal crops. There are several ways in which herbs can be processed and prepared. The most common ones are, for internal use, herbal teas, capsules, extractions, syrups, and electuaries; and, for external use, salves, lotions, liniments, poultices, plasters, compresses, herbal baths, oils, bolus, suppository, douches, and enemas. These preparations offer a multitude of alternatives and opportunities to creative entrepreneurs, especially now that the market is increasing. The size of the herb market doubled since 1994 and now offers excellent opportunities to people wanting to process and add value to their farm crops. Many small businesses have emerged since the boom of the herb market started in the early 1980’s. Several have prospered using first quality herbs and developing fist quality products. Small farms in Appalachia could benefit from this market bonanza by forming cooperatives and offering products of the highest quality.
Project Outcomes
The nine partner-farmers and project coordinators all learned tremendously important lessons about how value added works and how better to do it next time. In addition, we have already and will continue to share these learnings in person, in print, and on our website—which we believe is highly consistent with the purpose of this grant.
One specific example of how a shift in farm production from commodity production to value added may be seen in the Meadows family who by working with Collaborative 21C’s value added initiative had a significant production and marketing break-through with their heirloom “Bloody Butcher” corn. This crop had previously been used for personal consumption as grits, and what was left over as fodder for animals. As a commodity in the summer of 2007 it was worth approximately 4-5 dollars a bushel.
Collaborative 21C worked with the family to show them the value added of stone-grinding this corn as polenta at historic Jackson’s Mill. The polenta with one of the Collaborative 21C’s chef’s grandmother’s recipe on the label sold for three dollars wholesale to customers such as Stonewall Resort and The Greenbrier and for four dollars retail. In other words, the corn processed as polenta is worth essentially the same for a 12 ounce container on the retail market as for a bushel of the corn sold as a commodity—and grinding and packaging is not that costly.
Prior to connecting with Collaborative 21C, this family did not know what polenta was, or that such a market existed. We anticipate similar results can be shown for other farmers. A group of approximately seventy three small farm owner/operators have learned about value added at a Value Added Fair held in August, 2007 and another sixty one in August 2008.
The same evaluation form was used at the fairs, the dialogue sessions, and the presentations at meetings and conferences. There were a total of 296 people who attended these various sessions.
These are the lessons we shared:
Offering free samples is a most effective marketing technique and so is and providing the customers with recipes.
Having a recipe from a well-known chef on the package added even more value.
Consumers love a story. One farmer shared with customers that they were using their great grandmother’s recipe. Another shared the story about how the heritage seeds for their product had been handed down for 7 generations. These stories made people interested and eager to buy.
Consumers love history—for example, having corn stone-ground at historic (Stonewall Jackson) mill added even more value to the product.
Value-added products are crucial to extend their season.
Farmers’ markets and festivals were a very effective marketing tool. At these events when samples are given, sales are higher.
It is necessary to “Market, market, market.” One farm marketed their Value Added products on their own website, on localharvest.com, on WVFarm2U.org, and also displayed them in a coffeehouse, indoor market, and local Civil War Museum’s Visitors Center.
Pricing is very important and producers may misgauge the best price for a product the first year out.
Finding the right product and predicting what consumers will buy requires one to “think outside the box.”
The evaluation summary indicates participants’ response to our presentations:
94% of those farmers who had not previously been involved with value added found that the information session provided a realistic potential economic opportunity.
86% were interested in value added as a way of selling their farm products and wanted to know more about marketing them on the web.
74% were interested in value added as a way of selling their farm products and wanted to know more about low cost financing such as bridge-loans.
82% were interested in value added as a way of selling their farm products and wanted to know more about co-packers and packaging.
87% were interested in value added as a way of selling their farm products and wanted access to the DVD on value added that was previewed at the Value Added Fair.
Potential Contributions
The National Family Farm Coalition’s (NFFC) vision for a family farm system--one that contributes to economic opportunity and a healthful environment for rural America--provided the context and backdrop for this proposal. That vision describes the “ ‘family farm’ as an ideal by which we measure our progress as a society in offering rural economic opportunity and freedom, conservation of resources and biodiversity, and a healthful, safe food supply. Though often not the case today, a farm should be operated with the hope of passing on the land in better condition to the next generation.”
The Collaborative for the 21st Century not only subscribes to this vision for small sustainable farms but more specifically all of the activities of this grant have been predicated on that concept. Our philosophy supports finding ways to “renew economic life in rural communities…[by supporting] a small sustainable farm culture which respects the family, neighbors, community, and Nature.”
Strengthening the Social Fabric
The activities proposed in this grant promote the vision described above. They create a realistic working model that builds the capacity of small farm owners and allows them to increase the profitability of their farms through value added to their products. Equally importantly, it provides the opportunity for chefs to increase the desirability and nutritional quality of their fare.
The activities in this grant build human capacity and individual self-efficacy with the intention of allowing the farmer a broader range of choice. The intended effect is to preserve the economic viability of the small and family Appalachian farm, today and into the future, and to create a business connection between the local farmer and chef.
Young adults frequently can not see that there is any money in farming and too often leave their community. But a large number come back when they retire. Seeing their own (or one of the cooperating partner farmers’) success with adding value to their farm product may allow these young adults to find the way to a profitable living on the farm and increase their sense of pride in their local community. (In fact, Dillan Fuller, one of the partner farmers is currently a high school student).
Reducing Environmental Risks
The “slow grow” process associated with heirloom and organic products that is being promoted in this initiative and that our gourmet chefs are calling for as part of this project, all fit with and support respecting and protecting the environment. It is noteworthy that since value added allows farmers to make an equal amount of money on a smaller plot, it even decreases the fuel need to work the smaller plot thereby preserving the environment. In other words value added contributes exponentially to reducing environmental risks.
Enhancing Profitability and Improving Opportunity
Locally grown food helps make a restaurant unique, particularly when the menu attributes the food to a local grower/producer. Buying local strengthens the local community by keeping the food dollars spinning back through the area’s economy instead of being shipped off to a national distributor.
Future Recommendations
In the evaluations farmers attending the various dissemination sessions completed, they indicated an interest in value added as a means of increasing their return on their farm products, but they also indicated that they needed training in other areas in order to move forward with such an initiative. As examples:
86% wanted to know more about marketing on the web.
82% wanted to know more about co-packers and packaging.
87% wanted access to the DVD on value added that we had previewed at the Value Added Fair.
This data suggests that providing training in these areas is important to their future success with value added.