Adding value

Marketing fresh produce is a competitive and frequently expensive business as producers seek ways to improve margins.

Farmers who simply toss their products into a container and ship them off to market expecting a good price are asking for trouble. Those days are long gone. Consumers now expect more variety, more choice, convenience and better value for money. They don’t mind paying, but then the product had better be good!

A producer need not feel intimidated by these demands, as they offer new marketing opportunities, such as value adding, which can improve the bottom line. And value adding need not be expensive. It can be simple, cost-effective and profitable.

Different forms
But you must have a few things in place before taking on this challenge. The first requirement is a quality product – this is non-negotiable. Secondly, there should be sufficient volume. Continuity of supply is almost as important as quality. Adding value can take many different forms and it’s up to the producer to decide which product to ‘work’ on.

Generally, opt for higher value items such as berries, because the prices they command at retail level justify the cost of adding value. But the principle of adding value can be applied to almost any product. Take apples, for example. Place 1kg of small to medium apples in a neat plastic bag, add some printing and – voila! – you have a top seller. You can do the same with oranges – using Netlon bags instead of plastic – and any number of other products.

If a 7kg pocket of oranges sells for R15 on the market, that works out at R2,14/kg. Take those same oranges and put them into seven 1kg Netlon bags, add an attractive label and sell them on the market for R5 each. That works out at R35 or R5/ kg for the same 7kg pocket.

The Golden rule
I know these are hypothetical numbers, but they illustrate the point that farmers can improve their return on investment through simple value adding. Many farmers have combined attractive packaging with top quality produce and consistency of supply to create a niche for themselves with buyers. They’ve learnt the golden rule of selling fresh produce – people buy with their eyes!

Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.