Local Food Sales Channels
Direct sales involve selling product to the final consumer where the food producer is also involved in other supply chain activities such as distribution, marketing, retail activities and education. For farmers, direct sales require more skills than just running the farm operation. Direct sales skills could include branding, communication, logistics, and employee management.
There are several types of direct sales channels, including:
- Farmers’ Markets
- Roadside Stands
- Community Supported Agriculture (CSA)
- Online Sales
- Home Delivery
Intermediated sales involve other supply chain partners to move product from the farm to the consumer. An intermediary would take care of the final marketing of a product, like signage and product information, and allow farmers to focus on their core farm business.
Examples of intermediated sales channels include:
- Food Hubs
- Food Services at Schools and Universities
Wholesale market channels involve selling through a distributor that acts as a middleman between the farm and the final point of sales. Wholesale channels allow farmers to focus on their core farm business because a wholesaler does the hard work of finding customers. Wholesale market channels typically require larger quantities of products at a lower price than other local food channels.
Examples of wholesale market channels include:
- Food Hubs
- Food Distributors
- Produce Auctions
- Produce Brokers
Online market channels provide farmers a way to directly link producer/provider to buyer. Producers are able to log in and provide prices, products and quantities, and buyers are able to purchase and pay using a payment system. There are a number of apps and products out there for a farmer to use. Here are a few examples:
Small Farms Central – Service that includes website, e-commerce and marketing tools
Farmzie – E-commerce App for growers and buyers
Local Dirt – Online and app marketplace for growers and buyers
Definition of ‘Local’
Nearly everyone has a definition of local when it comes to food and there is not a technical definition. It is most often defined geographically such as ‘within a county’ or ‘from my state.’ The USDA defined local food for marketing purposes in the 2008 Farm Act as related to the Rural Development Value Added Producer Program as food that has traveled less than 400 miles or is produced within a state. The USDA Economic Research Service clarifies many definitions and concepts in their report, Local Food Systems: Concepts, Impacts and Issues.
In 2014, the Indiana State Department of Agriculture directed the research on the feasibility of a food hub network for Indiana and in that report, consumers, farmers and food producers contributed their definition of local food. The largest percentage (40%) of respondents defined ‘local’ as food from within 50 miles, with the majority of respondents (78%) defining food as being produced within 100 miles or within the state of Indiana.
Selling Local Food to Schools: A Resource for Producers – USDA
USDA resource that quickly goes over strategies and processes of selling local food products to school districts.
Selling Strategies for Local Food Producers – University of Missouri Extension (G6222)
A comprehensive guide that discusses a customer-centric approach to sales and marketing of farm products through direct sales channels like farmers’ markets and roadside stands.
It provides powerful search tools that connect the production and distribution chains. It can be used to conduct market research. Food Industry MarketMaker is a network of Land Grants, Departments of Ag and food organizations that have invested in a virtual infrastructure to bring local food to the consumers. A large in-depth database connecting markets from farm to fork. It has a diverse community of farmers, fishermen/women, food retailers, farmers’ markets, processors, wineries, and restaurants.