Center for Profitable Agriculture

PROJECT HIGHLIGHTS | PRODUCTS ON THE MARKET

Value-Added Projects — Project Highlights — 6

	Enhancing Markets for Jams & Jellies
	Entertainment Farming Through School Tours
	Environmental Education
	Estimating Wine Sales for a Start-up Winery
	Evaluating a Dairy Processing and Retailing Business

Enhancing Markets for Jams & Jellies

It should be understood that the jam and jelly market category is most likely overcrowded. The "jams, jelly, and preserves" market is dominated by the large, established, mainstream companies. Approximately 31 percent of grocery store sales of jams, jellies, and preserves are by one national brand. Sales in the jam and jelly category have increased slowly in recent years at an annual rate of about 2 percent. The CPA assisted a producer with an existing product line of unique and distinct flavors of jams, jellies, and preserves in determining ways to increase profit without dramatically increasing the amount of time and effort required to generate it. The producer’s current situation and efforts were assessed along with the corresponding implications. Marketing efforts focused on increasing local area sales through the use of an on-site retail storefront, mass mailings to specialty and gift shops. The creation of specialty and holiday gift packs, attendance at wholesale trade shows and the use of a broker and/or distributor were also addressed as ways to increase the amount of revenue generated.

Entertainment Farming Through School Tours

Investigation into the entertainment farming industry finds that it is not a “build-it-and-they-will-come” enterprise. Folks must be convinced that the business will provide a product and experience that is a “good value.” The obvious aspects of the business such as quality products, safe experience, polite visit and a clean and neat environment must be extended by features such as well organized, thoroughly planned and greatly executed. Entertainment farming activities offer the potential of additional income for the farm operation and a method to capitalize on non-utilized resources. However, the project will require significant investments of time and labor. A total devotion to the project will be required during certain months and will require intensive management and marketing efforts. Liability issues on the farm will be increased and a tendency to be distracted from other f arm activities will be likely during the fall. The target market for this enterprise is the sub segment of the total population that is most likely to visit. Two target markets have been identified - the first is elementary school children and the second is households with children. The primary regulatory concerns will involve the County Health Department for food served and waste management, the USDA, APHIS for petting zoos and the Tennessee Department of Agriculture for foods produced. Sales, use, business and income taxes will all be issues for this enterprise.

Environmental Education

School curricula for hands-on environmental education are becoming more popular. Therefore, developing a family farm into a hands-on learning workshop featuring environmental education activities seems timely. However, the costs to develop and operate an environmental workshop with educational activities must be offset by fees charged to classes seeking such an environment. According to CPA findings, a farm that is developed as an environmental education facility should include the service of developing/providing/delivering an entire educational curriculum complete with activities and instructors. Simply offering an “outdoor classroom” does not compete well with other outdoor-education offerings such as public parks, organizations, vacant lots or other farms.

An estimate of sales for a start-up winery in Tennessee can be calculated using demographic information and data on existing wineries. Variables that may predict wine sales include location, traffic count, population, years in business, number of varieties offered and the level of marketing used. Marketing appears to be very important to the amount of sales that a winery can expect per year. However, marketing is not just advertising. It includes attending trade shows, participating in wine competitions, writing news releases, having word-of-mouth referrals and other public relations activities. Traffic count and population are also important, suggesting that a good location is critical to sales.

Evaluating Dairy Processing and Retailing Business

The consideration of adding value to a Tennessee dairy farm by processing milk and marketing various dairy food products involves many factors including the affect of the Federal Milk Marketing Orders, an understanding of technical processes, marketing and cost analysis. Not only do the Federal Orders have implications on the milk that is used for processing but also affect the value of the farm's surplus milk that may not enter the farm's processing enterprise. A significant amount of equipment is utilized in the processing of dairy food products and numerous food safety issues must be exercised in each step of a dairy processing operation. While general consumer trends have recently moved toward a preference for fresh, safe and local food products, the specific trends, preferences and number of consumers in the "targeted market" is most significant to the success of a value-added dairy business. The unique interactions of price, cost of production, sales volume and product volume production efficiencies directly impact the potential of a value-added business to break-even and therefore require close investigation.