The most important part of any new business is thorough planning and a successfully implemented marketing plan. This section outlines the step-by-step procedures that would be necessary in order to start an organic farming business off on the right foot.
Step 1: The first item of business is background research. In order to be successful, other organic farming businesses can be studied and/or observed. Also, obtaining knowledge on the current situation and trends are extremely important in order to learn which direction the industry is moving in.
Step 2: Finding a suitable location to purchase farmland. Certified organic acreage in the U.S. reached more than 4.8 million acres in 2008. Total organic cropland reached over 2.6 million acres. These numbers are actually quite small compared to total farming acreage. Finding a location needs to be based on pretty much one question: What kind of crops do you want to grow and where is the best climate/location for this to happen? Again, additional research will be required to determine the best terrain/climate/location depending on what crops you choose. The states with the most certified organic acreage are California, Wisconsin, North Dakota, Minnesota, and Montana (Organic Trade Association, 2010).
Along with this step comes the added hassle of finding your capital investment. Organic farming is NOT a cheap venture, and start-up costs are not the only money you will be spending. Equipment is expensive, as is keeping that equipment up and running for years. You must be sure that the money you are paying to get your business running will be profitable in the end. (Again, another reason why research and knowledge of the organic farming industry is so crucial.)
Step 3: Determining the right target market. As was discussed earlier, there are several ways for organic produce to be marketed. The decision pretty much lies between (a) selling directly to grocery stores or restaurants or (b) selling your food from a farmer’s market and/or tailgate markets. The difference between the two is that it is extremely difficult to target grocery stores and restaurants when you are a relatively new business. A partnership with a wholesaler takes time and a lot of commitment to develop. Also, the basic grocery stores that sell both organic and nonorganic foods really only hold a small percentage of organic. This makes it hard to get your foot in the door when these grocery stores have most likely already established a relationship with their current organic supplier. The grocery stores that sell organics only (e.g. Whole Foods, Trader Joe’s) might only take on a relationship with you after much scrutinizing, as it is extremely important to these types of stores that they are selling the best of the best. The best option for a new organic business might be to target the consumers directly at places such as farmer’s markets. This will hopefully establish rapport between the business and its targeted audience.
Step 4: Deciding on prices. This is a crucial step in any business, but even more so with organic farming. When people hear the word “organic”, a lot of the time they think “expensive”. While this is true, the advantage is that people are more willing to dole out cash for expensive grocery shopping trips if they perceive the benefits to outweigh these costs. This leads us into the most important part of the action plan…
Step 5: PROMOTION. There are a lot of benefits to be seen from purchasing organic foods as opposed to nonorganic. Not only is it better for your body (no fertilizers, pesticides, or injected hormones), but it does wonders for the environment as well. The problem is that many people are uneducated about these benefits and do not see the need to buy this type of food when nonorganic tastes the same and is less expensive. Advertising will play a huge role in the awareness of organic produce. Not only should you be focused on advertising for the business itself, but organic food in general. Think of it as a sort of educational, two-for-the-price-of-one advertising campaign. The objective is to gain repeat consumers who will remain loyal for the amount of education we will bestow upon them. Another way to gain consumer awareness might be through the use of social networking sites. Almost every business today has either a Facebook page or can be followed on Twitter. This is a great way to get a brand name out there and also to (again) increase what little knowledge society has about organic foods.
