Looking Under the Hood

This post is going to be about meat and finances.  If you are mostly here for the cute lambs, that’s totally cool, of course, but this post doesn’t have any of those.  We will be back to our regularly-scheduled programming next post.

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We are excited to announce that we will be having lamb sausage made in mid June.  We will have Garlic Parmesan sausage available for sale at our farm and hopefully at a few select locations in the state.  Delivery is possible, for those that want it.  That said, my thoughts about how to sell this sausage and my lamb crop generally are a bit mixed at the moment.

Here’s the skinny: The most I can make selling a 45lb lamb is selling one to you, whole or half, at my current price, $10/lb.  Even thought I pay the butcher and often do the transport, that is my longest dollar.  While sausage is a food that anyone can cook and enjoy, your sausage yield from that same 45lb lamb might only be 25 lbs of ground meat, yielding 30lbs of sausage once some pork fat is added.  The price per pound has to go up, and that’s hard to do with a meat format that most people view as cheap.

I have several years’ experience marketing Vermont specialty foods.   Both products I sold were high-priced, specialty offerings so I am pretty familiar with the Vermont market for pantry staples with long shelf-lives.   Meat is different- it is perishable, and unless you’ve really spent your time branding, a lot of customers view it as interchangeable.  Both products I sold in the past were for special occasions and were giftable.  Meat is a staple for most people and would be a rather non-standard gift.  What then, in their minds, is the difference between one farm and another when the product in the clear plastic wrap looks the same?

The Vermont food market offers an unending array of specialty foods but has probably achieved saturation in some areas.  Non-diet-specialized baked goods and sugary foods are saturated sectors.  I’ve been told that specialty hot sauces and mustards  the truth is that many people who buy lamb have a friend or neighbor who can sell it at hobby-scale prices.  It is fine with me that farms do that, but I know that it reduces my ability to sell meat in Vermont at prices that will sustain our farm without us also working full-time off-farm jobs.

Some of the common mistakes and a few brilliant moves are known to me.  I am not as familiar with perishable meat sales and distribution, though, and I worry about making similar mistakes to the ones I have seen.

Here is a non-exhaustive list of things I shouldn’t do when I try to sell my lamb:

  • Under-price my product such that I wind up in a position where I lose customers when I correct the price later.   I knew a company that delivered their product for free and didn’t factor their debt into the price.  When they went back and recalculated, many purchasers reduced or eliminated the product from the shelves.  They simply could not bear the price increase and replaced the product with another that generated more turnover and revenue.  Pricing correctly requires a lot of calculations, sometimes with numbers that I don’t yet know.  It’s intimidating!
  • Put my eggs all in one basket.  Another company I heard about was lining up a large contract with a national retailer.  They halted marketing efforts because the retailer was going to purchase 75% of their product output and invested in specialized boxes that the vendor required.  The retailer only took about 1/3rd of what they projected, and the company had to scramble to move the rest of their product in a very short timeframe.   With a relatively small output of lamb this year but hopes for much more next year, I need to focus on sending lamb to growth areas and establishing relationships, but not running out of product!  Yikes!
  • Neglect my marketing.  One of the best efforts one of my prior companies made was to put lots of effort into reaching out to magazines and media.  They created their own niche by having a stronger media presence than some of the first-to-market competitors with smaller budgets.  It was really impressive to see the effects of that effort in sales effectiveness.  I haven’t focused enough on this because I don’t plan to market in my immediate vicinity.  Frankly, my immediate area is generally very low-income and might possibly find my prices and my Animal Welfare Approved certifications offensive or off-putting.
  • Fail to utilize my social media presence.   This farm has almost 500 Facebook followers and has over 1000 Instagram followers.  Woohoo!  It makes me incredibly happy to know that so many people care about the goings-on on this little farm.  But I think that I have more folks who love pictures of sheep than I have people looking to buy our yarn or our meat.  And the meat issue is especially touchy – I don’t post about meat because I don’t want to offend folks who would buy the yarn but not the meat, but the reality is that meat income makes this farm viable.  I started raising animals for meat because I wanted to eat meat raised to the very highest standards after 10 years of being vegetarian.  So I am not ashamed of it, but I am also unable to mobilize my social media effectively because I have a product that enough people just don’t want to see or think about.
  • Allocate my time and product incorrectly.  I want to build a presence mainly in the Boston and/or New York City markets, because I see that the Vermont market is pretty well saturated for lamb, generally.   But I also need to make the “longest dollar” for my efforts, which means capturing a maximum amount of retail sales.  The irony is that if I sell at a local farmer’s market, I will capture more retail dollars, but I will cut into my future salespower by not growing my market where growth can be achieved.   Does that make sense?  Let’s say I produce 30% more than I can sell at Vermont food co-ops and a farmer’s market, that 30% of my output might only last 3 or 4 weeks at a market in Boston.  Whereas if I sold my whole crop to one or two markets in Boston, that might ultimately result in no leftover lamb.  But then we are back to No-No #2, putting all of our eggs in one basket!
  • Making your sales work for you as money and media: I have a distributor in Boston that is interested in my meat, but I can’t afford to sell at the price they are currently offering.  When the sheep have reached a full population, perhaps I will be able to use them as an outlet.  The meat would also have their label, not mine, which doesn’t contribute to promoting my products effectively.

 

All of these thoughts seem to lead me in endless circles.  How to I launch in a place that I no longer know, with a level of sophistication that I no longer cultivate in myself, but do it in a way that I can continue to grow this business and sell more lamb in years to come?    Fundamentally, this is an issue of scaling up in a deliberate and planned way, which I understand is much easier to do with factories and widgets versus living beings.  Is it possible to make my longest-dollar by doing more retail in the short-term, while simultaneously selling to a distant market on a wholesale basis?

I would be interested in anyone’s thoughts and comments!

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Lamb sausages are really delicious.