Pros and Cons of Selling Farm Products to Restaurants

Enterprising farmers often express an interest in selling their meat and produce to restaurants. After all, a lasting relationship with a good chef can be both lucrative and personally fulfilling.

However, this does not necessarily mean that selling to restaurants is right for every farm. There are numerous pitfalls to be considered. You will want to weigh the pros and cons carefully to make sure that this venue fits with your vision and your unique circumstances before investing time, energy, and money.

Pros

  • Compensation for quality. If you have taken an artisan approach to production and developed a gourmet product, it is only reasonable to expect compensation for the extra time and effort you have put in. High-quality restaurants are one way to reap this reward.
  • Consistent sales. Restaurants provide a fairly consistent outlet for your products simply because they go through a great deal of ingredients on a regular basis. A solid relationship with a chef can win you a steady income.
  • Rural logistics. Those who live in more rural areas often do not have access to a sizable customer base within a reasonable driving distance. Regular deliveries to restaurants in a larger city somewhat farther away allows ranchers to reap the benefits of direct marketing despite their location.
  • Market research assistance. An established restaurant already has a developed clientele. The chef already knows what these people want and how this demand varies seasonally. Make the most of the chef’s expertise to adjust your own production cycle.
  • Promotional opportunities. Most dedicated chefs love to promote a farmer who has earned their trust. They will usually spread the word across the community for you. They may even be willing to host special events at the restaurant to give their customers a chance to meet you in person.

Cons

  • Need for high-end venues. Joel Salatin advises that a restaurant price is typically divided into three roughly equal parts: ingredients, labor, and overhead. Does the third allotted to ingredients at the restaurants in your area cover your costs? If the only restaurants in your area are cheap burger places, you are probably out of luck. The ideal restaurants are those focusing on local, seasonal, or organic foods.
  • Time invested in relationships. While you can avoid crowds by selling to restaurants, do not think for a minute that you are avoiding dealing with people. Successful sales to restaurants requires a considerable investment of time spent building a relationship with the chef, which can take months. Remember, you are there to serve him or her, not the other way around.
  • Certifications. To sell meat and produce to higher-end restaurants, you may be expected to have an organic certification. Of course, certification will increase your costs.
  • Requirement for consistency. While consistency is a must in any business, when selling to restaurants it is make or break. Chefs work under an enormous amount of pressure due to busy schedules and demanding customers. Respect their time, provide quality every time, always deliver on your promises, and above all never allow yourself to run out of product. There is little to no room for error when dealing with restaurants.
  • Specific needs. Each chef has individual needs based on the needs of the restaurant’s customer base. To some degree, you must be willing to accommodate these needs, which can encompass aspects ranging from portion size to packaging.
  • Changing trends. Restaurants typically try to keep up with the latest food trends to give themselves an edge over their competition. What is in one year will be out the next. Farmers may need to shift their offerings on a regular basis, particularly if they are selling produce.
  • Low demand for low-value products. For example, many restaurants are more than happy to sell a grassfed steak. Quite a few chefs will even purchase bones for making stock. However, this still leaves you with most of the carcass (primarily ground beef but also roasts and organ meats) to try to sell through other venues.
  • Smaller customer base. Direct marketing through your own on-farm store can allow you to develop a stream of regular customers. If some move away or stop coming, you have others you can rely on until new customers take the place of the old ones. If you lose a restaurant, on the other hand, you may have to deal with the loss of a large portion of your income, plus a great deal of surplus inventory.

Conclusion

Selling farm products to restaurants can be tough. For starters, not everyone lives within proximity of a suitable high-end restaurant. For another thing, many farmers are not prepared for the dedication and effort it takes to establish a long-term relationship with a chef.

But for many, the most difficult part of dealing with restaurants is the need for absolute reliability in their chosen products. A chef cannot afford to work with a farmer who fails to deliver, regardless of whether the breakdown was due to weather, pests, or other circumstances apparently beyond the farmer’s control. Because chefs work under extreme pressure, they have little choice but to seek a new supplier when a farmer fails to deliver.

Therefore, it will take a particular type of farmer, or more likely a team, to make restaurant sales work. The producer must be an artisan at heart, dedicated to growing a few things well. He must have developed his craft to the point where he can deliver food of the desired quality on time without exception. Likewise, the person making the sale must have a deep appreciation for the needs of the chef.

Even provided that the farm can boast such a person or team, typically additional sales venues must be sought to market food that does not meet the needs of restaurants. For example, no matter how exceptional the quality of your ground beef is, you will probably find that it sells better through a farmers market or your own on-farm store.

But as long as these issues are dealt with, farmers frequently find that the steady demand that comes from restaurants can turn their operations into profitable ventures.

Helpful Resource

How to Direct Market Your Beef

How to Direct Market Your Beef
This free PDF focuses heavily on selling to restaurants. While the book covers beef exclusively, some of the principles will apply to other products.