From our Fall 2011 Membership Newsletter
By Matt Scanlon

If Vermonters can buy just one-tenth of their food from local farms, the result would be scores of new jobs, increased profits, and a quiet revolution in economic independence. In the first of a two-part series on local food, we feature some savvy farmers who are helping us make the leap.

It's easy to get lost in superlatives as a Vermont resident. We rank as the healthiest state in the nation, our towns and small cities are regularly listed as top places to live in the national press, our unemployment rate is roughly half of the national average, and The American Legislative Exchange Council ranked us #1 in K-12 education achievement levels in 2010.

There's no shortage of challenges, to be sure, but the extent to which the state is a pinnacle of achievement is notable...and marketable.

Another encouraging accomplishment is the extent to which Vermont residents buy their state's agricultural goods.

Residents spend an average of $36.77 annually through farmstands, Community Supported Agriculture, farmers' markets, and the Internet (collectively known as direct-to-consumer sales) on signature products like apples, maple syrup, and of course, milk, yogurt, cheese, and vegetables.

(If this figure seems at first blush underwhelming, consider that the vast majority of other states ante up $3-$5 in direct sales).

When non-direct sales—such as supermarket and other retail—are added to the equation, the figure grows further still. What farmers and others connected to the industry agree on is that it's very much in the state's interest to encourage Vermonters to buy even more from local farms. That sales progression will require state support, good weather, a bit of luck, and—perhaps most of all—savvy marketing of the already market-proven Vermont label.

Many of the farms conserved with VLT are on the forefront of local-food marketing and are reaping rewards and learning lessons they can share with other agricultural entrepreneurs.

Misty Knoll poultry, Monument Farms milk, Butterworks yogurt, Taylor Farm Gouda cheese, Butternut Mountain Farm maple syrup, Champlain Orchards apple products, and Vermont Smoke and Cure's Vermont Grown meats, just to name a few.

How high can we go in terms of the percent of locally produced food Vermonters will buy? This is one of the causes of organizations such as the Vermont Fresh Network, Vermont Farms Association, the Vermont Sustainable Jobs Fund, and the Northeast Organic Farming Association of Vermont, among many others.

"We actually don't know for certain how much local food people are consuming. After a great deal of study, though, we think it's about 5% of total food expenditures," explained Vermont Sustainable Jobs Fund executive director, Ellen Kahler. "The goal is to get to 10% within the next 10 years, and that's in part what our organization's Farm to Plate Initiative is designed to do."

That extra 5% in sales would have sweeping consequences for the state's economy. The executive summary of the Farm to Plate Initiative reports that such a boost would generate $135 million in additional annual output and 1,500 new jobs over the 10-year period.

 

Message in a Bottle

The iconic Vermont dairy farm comprises 73% of all of Vermont's agricultural business. Most dairy farms sell milk to large co-ops, which in turn distribute it to a number of companies, including Cabot Creamery and Hood. In most circumstances, the farmer is not informed where the milk is going, and has virtually no influence over the distribution process.

Given that Vermont produces far more milk and other dairy products than it could ever consume, this largely out-of-state co-op system has real value. At the same time, it can homogenize the process, hitching farmers to a pricing system beyond their control. Dairy farmers have been thinking creatively about policies, business models, and marketing strategies that can help keep them viable.

One way in which a small number of dairy farmers are thinking about marketing is to add a story to their brands by self-bottling their own milk.

After more than three years of planning and fundraising, Cheryl and JD DeVos are predicting that their own organic milk bottling facility will begin operation as an adjunct to the couple's conserved Kimball Brook Farm in North Ferrisburgh, a family-owned farm since 1968. Long frustrated by the pricing system for milk, the couple decided to take charge of the bottling process themselves.

"We knew that the only way we were going to thrive is to market our own product in our own way," Cheryl explained. "The key was to control costs, of course. For example, back in the spring, we purchased the front part of a bottling line from a creamery out in Missouri: it will be re-worked to function perfectly, and will save us a great deal."

The business will market under two names—the glass line from Kimball Brook Farm, and the plastic from Green Mountain Organic Creamery—and will join the Monument Farms Dairy in Weybridge as one of two VLT-conserved dairy farms with bottling facilities.

Why use two names? "We wanted some branding flexibility," Cheryl explained. "Kimball Brook Farm will always be our own milk, but the plan down the road is to incorporate milk from other local organic farms and market collectively under the Green Mountain label. At least we hope that's the plan... if we get that big."

DeVos hopes that the bottling facility will start production later this fall, but she has been cautious about rolling out any aggressive marketing until the line starts whirring. "The worry is that you're going to market something that isn't even there yet, so what we have been doing is selling milk in local farmers' markets, which is a great way of both getting some sales but also spreading the word so that people will remember the brand."

One pivotal piece of media exposure has come in the form of the University of Vermont Extension and the Vermont Dairy Industry Association declaring Kimball Brook Farm as the 2011 Vermont Dairy Farm of the Year. "Now that's great advertising," DeVos, added, smiling.

 

CSA Evolution

Now more than 20 years old in Vermont, the concept of Community Supported Agriculture (CSA)— in which consumers buy shares of a farm's produce—has contributed broadly to the state's robust direct-to-consumer sales, and more than 160 farms in the state have a CSA component.

One critical need in the business models is to diversify what is being offered, as consumers can quickly grow weary of choosing among weather-hardy crops like turnips, potatoes, and leeks.

Holton Farms in Westminster (www.holtonfarms.com), co-owned by Seth Holton, Jurrien Swarts, and family friend George Hornig, found an answer to that problem in buying the best from a variety of local farms, then selling collectively through its own CSA model.

"It's a twenty-farm association that developed over just the last few years," Seth said. "The way most farmers look at it is that we are just another wholesale account, but the result is a hugely expanded product base to choose from."

And it's not just the association that makes a success of this eighth-generation family farm—54 acres of which was conserved permanently by VLT— but also an out-of-state sales presence in, of all places, Manhattan.

"Jurrien [Seth's cousin] was working at Credit Suisse bank a few years ago, and the idea occurred to us to market to people in his office," explained Seth. "The first year in 2008, we had 34 people sign up. The next, membership increased to 340, an investment was made in a delivery truck, and the farm began to approach apartment building managers directly to determine interest in drop offs."

The response has been "overwhelmingly positive," according to Seth, and this year, he and/or his partners make thrice-weekly trips to the city to serve 1,300 CSA members in New York, many of whom pre-select their items from the farm's site.

 

Distributor as Deliverance

Even amidst this collection of small-scale farms going the self-marketing route, it's critical to understand that the buyer/distributor role is a vital one, and something most farm businesses rely on to move product to plates.

The key, of course, is finding the right buyer, and Greg Finch of Vermont's Family Farm in Franklin—who conserved his land with VLT in 2010—found one in North Springfield's Black River Produce. Greg, who has run the farm for 10 years, knew that he could market his pork and lamb himself, but found the time expenditure just didn't add up.

"For me and a lot of farmers, selling any kind of commodity directly just doesn't make money...the profits just evaporate," said Greg. "So, I partnered up with a distributor that knew it already had an end market. Primarily, I work through Black River Produce. All hogs go to them initially, and they take most of the primal cuts and sell them through their distribution chain...high-end butcher shops and restaurants, etc. The hams, bellies, and trim go to Vermont Smoke and Cure for their 'Vermont Grown' label. The three-partner relationship has worked exceptionally well."

One of the reasons for the partnership's success is that its members crafted a deal together. "This wasn't a 'Meet my price or else' sort of thing," recalled Greg. "We penciled out cost of production and end pricing, and came up with a fixed cost. One of the benefits for them is that my price does not go up with the commodity market; as long as we do things correctly, it's stable, and there is a profit in there for all of us."

 

The Dance of New and Old Tech

In the wake of the social media revolution, farm marketing has been fundamentally and forever changed. Incorporating online sales, Facebook, Twitter, and other social-media platforms into an already labor-intensive day may be daunting, is also proving to be a real opportunity to maximize income.

"What's interesting to me is how social media is actually making conversations easier between farmers and chefs, for example," explained Megan Sheridan, Director of the Vermont Fresh Network. "For example, a farmer can tweet, 'I'm out in the field, and I've got these amazing tomatoes,' or 'I just dropped off my best corn ever at Corner Bistro.' Now, you have people both thinking about your product and wondering whether they should be featuring it in their restaurant, too. It's this authentic, inspirational kind of sharing."

Another example of how the forces of the digital economy are reinventing retail sales is playing out at the Robb Family Farm in West Brattleboro (www.robbfamilyfarm.com). The 111-year-old farm—which has used conserved land as part of its acreage since 1994—is phasing out its dairy operation, in part because of a planned switch to a grass-fed beef business model, but also because Internet sales of the farm's maple syrup and associated products have been so strong.

"Between the first and twenty-third of December of 2010, we did 700 online orders. This is an approximately 100% increase over the same period a year prior," said Helen Robb. "At the moment, our online sales are about 90% of our total sales [the rest coming from a traditional storefront]. It's just been an amazing change."

Helen attributes the farm's online success to the greatness of its products, to be sure, but partly to an association with Pieces of Vermont, a marketing association and direct retailer based in Jacksonville, VT, as well as to its own innovative wedding-favor package program.

"It's a very profitable component of the business," Helen added. "Packages feature a 1.7-ounce maple leaf bottle or a 1.7-ounce nip bottle, along with a variety of individually wrapped candies, all tied with ribbons chosen by the bride. It's a lot of one-on-one consultation with the customer, but it's worth it."

Megan Sheridan freely acknowledges, however, that there is no substitute for old-school networking, the proverbial flesh-pressing component. To that end, her organization devised a novel way for farmers and large retailers to meet in numbers, and without the stress and expectation of an official sales call.

"We call it a Matchmaker Event," said Megan. "It's really a reverse food show; all the buyers are at the table, and then farmers can go and have five- or six-minute conversations about what products they have. Its like speed dating, except there's no kissing."

Now in its fourth year, the event (held on October 27) has been a success to Sheridan in part because it has begun a dialog about expectations on both the supplier and buyer sides. "Afterwards, farmers can say, 'Oh, now I understand the volume and price that these buyers need,'" explained Megan. "We have big buyers attending, too, like Price Chopper, Hannafords, Fletcher Allen [Health Care], and WalMart. It's a great first step in turning small-scale into large-scale."

Whatever marketing innovations might be at work to get the state to that vaunted 10% rate of buying its own, they amount to little without land management, according to VJSF's Ellen Kahler.

"If we are going to increase the amount of food we are producing, we are going to need more acres on the fruits and vegetables side," said Ellen. "Also, we need to make sure that if we can't fix the traditional dairy pricing system and wind up losing even more dairy farms—or people age and their kids don't want to take over—we don't lose that land and infrastructure to developers. Making sure that prime agricultural land stays in production is critical. We can't market what isn't there."