Center for Profitable Agriculture

PROJECT HIGHLIGHTS | PRODUCTS ON THE MARKET

Value-Added Projects — Project Highlights — 11

	Sheep Farm with Retail Craft Business Exploring School Tour Concept
	SLAWSA — The Gourmet Slaw with the Salsa Twist
	Smoked Fish
	Soybeans
	Specialized Wood Furniture Components
	Specialty Cookies
	Specialty Mushroom Production and Marketing
	Squirrel Corn and Cornstalks
	Strawberry Preserves: Special Recipe

Sheep Farm with Retail Craft Business Exploring School Tour Concept

A small sheep farm in middle Tennessee currently sales craft items made from wool at livestock shows, fairs, craft shows, and on their website. In addition, they have explored the concept of allowing the public onto the farm to learn more about the care and management of sheep through their “Lamb and Wool Day.”

The family would like to decrease the amount of travel that is currently done in order to sell their craft items. They would like to change their website from an informational site to an e-commerce site. This change would entail the addition of shopping cart software and the opening of a merchant account to allow credit cards to be accepted as a means of payment. In addition, they would like to focus their energy toward a fee based school tour program that would allow students to visit the farm and learn about sheep, shearing, and the spinning of wool into familiar products.

SLAWSA– The Gourmet Slaw with the Salsa Twist

Allowing potential consumers the opportunity to sample a new food product and provide comments are effective means of evaluating market acceptance and sales potential. A new, cabbage-based condiment called SLAWSA was recently sampled by potential consumers. According to a summary of the comments collected at the sampling, the CPA found that SLAWSA will be readily accepted by consumers who are willing to purchase the product once it is available. In addition to technical support to prepare the product for market, the CPA has worked with the entrepreneur in applying for a trademark, locating specialty food brokers and determining how to best position the product, given changes in consumer taste and preferences. SLAWSA has been initially introduced in three Chattanooga retail markets and further retail exposure is being sought with a regional Wal-Mart buyer. SLAWSA can also be purchased directly from the owner via a specially-designed web site and toll-free telephone number.

Smoked Fish

Value-added aquacultural products often require precise technical development. Salt, nitrates and water-activity levels are crucial measures in the development of a safe, stable and marketable product. A variety of test-trials are needed to develop a product acceptable by the consumer. Many home recipes require substantial adjustments when acclimated to a large-batch process. Niche marketing of value-added aquaculture products such as smoked fish also needs significant attention. Truth in labeling regulations must be considered, competing products should be studied, distribution and direct marketing channels should be investigated and target markets should be identified.

Market Evaluation for a Specialty Grain Business

Significant indicators point to an increased demand for specialty soybeans in recent and future years. Whether an intermediary contractor, handler and/or broker will be needed to facilitate the movement and marketing of such beans from the farm to the processor is yet to be determined. Price premiums in recent years for low-saturate soybeans and organic soybeans have ranged from around a quarter ($0.25) to $15.00 per bushel, respectively–most price premiums are less than $1.60 per bushel. Start-up costs for a complete grain handling facility and identity-preserved system is estimated at $10.00 per bushel and annual operating costs are estimated at more than $2.00 per bushel above the market value for commodity soybeans. Developing market contacts and transportation costs seem to be significant obstacles for developing a profitable specialty soybean enterprise. A thorough investigation of potential buyers, product requirements, terms and conditions should be conducted.

Special Recipe for Strawberry Preserves

The total jams, jellies and preserves industry is dominated by a few large companies. Investigations into existing value-added strawberry products reveal a predominately stable/abundant supply. Routine consumption patterns are currently met by the volume and consistent availability of products at the grocery store level. However, there seems to be an indication of limited opportunities in niche markets. Specialty stores appear to still be eager to add eye-appealing, differentiated and home-made products. A strong economy and a more value-oriented (opposed to a price-oriented) consumer may have created a demand for specialty food products, including preserves. The typical jam, jelly and preserve consumer is married, with children between the ages of 6 and 17 years, is between 35 and 44 years of age and has an annual household income in excess of $40,000. Approximately 80% of all principal shoppers buy jams, jellies or preserves. Most food shoppers have indicated that they perceive preserves as “old-fashioned products that are not up-to-speed with the 90s.” On average, households spend $21.03 annually on a combination of products in the jams, jellies, preserves and other sweets category.

Specialized Wood Furniture Components

In the wood products industry, corporate manufacturing facilities may consider outsourcing specialty services with smaller, private woodworking firms. Such specialty services often include assembly, specified cuts and specialized configurations. While such opportunities for the private woodworker likely bring a contracted market, with a pre-arranged sales price, the cost of production and additional investment should be carefully considered. Labor, equipment, delivery and raw product and end product specifications should be considered and the costs evaluated carefully. The term and conditions of the contract should also be considered and evaluated with respect to the payback period for specialized or additional equipment that is needed to fulfill the contract.

Specialty Cookies

Development and marketing of shelf-stable, individually-packaged food products may require substantial time and patience. there appears to be a reasonable amount of opportunity in the confectionery and cookie market. Opportunities may exist for strategic placement of products in places frequented by consumers who possess a preference for the product and its package characteristics. In order to prevent underpricing a product for anticipated future expansion in sales, pricing strategies should include an allocation for the cost of labor.

Specialty Mushroom Production and Marketing

Production and consumption of specialty mushrooms in the U.S. has experienced growth in recent years and is expected to continue to increase in the years to come. However, most of the U.S. mushroom demand is being met by companies with large production systems. Therefore, small farmers considering targeting niche markets (gourmet restaurants) for mushrooms must compete with the consistent, regular supply of low price mushrooms offered by the national suppliers. The production system for mushrooms varies greatly from the production principles that apply to the more traditional agricultural commodities. The market for mushrooms in the U.S. is well-served by large national suppliers through very reliable distribution channels. Some gourmet restaurants may be interested in buying direct from a farmer if consistent and high-quality supplies can be delivered to their specifications at a price equal to or less than current suppliers.

Squirrel Corn and Cornstalks

There appears to ba a reasonable amount of market potential for fall lawn-scaping decorations derived from farm resources. Traditional Tennessee row crops can serve as the source of value-added products such as bagged wildlife food, corn-stalk bundles and wheat straw bales. These products can be prepared for wholesale to other retailers or for sales direct to consumers from an on-farm market or agritainment operation. On a small scale, these value-added products may be better suited for family operations with surplus labor. Specific preferred product and market attributes for theses value-added products should be carefully evaluated.