Frozen, is it the Answer to Direct Selling?

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William Waterfield (Andover)

I know several farmers who produce great meat and want to direct market their product. Direct marketing comes with significant issues both regulatory and practical that need to be overcome. Let’s ignore for the minute the regulatory ones – and they are plentiful! If the business is to be successful in marketing its produce, it must overcome the commercial barriers that are numerous, the most significant being deciding on a route to market: will this be farm shops, a box scheme, vending machine, etc.?  Regardless of the route chosen, the following issues will need to be overcome:

  • In the red meat sector, achieving carcass balancing.
  • Shelf life – when selling fresh this is a real issue. Even when a carcass is being hung for a prolonged period, the window to market is a few days.
  • Seasonality of production – whilst it is possible to do all year round supply, when you have significant continual demand, this needs to be balanced with production system on farm, e.g. calving beef cows in two blocks to spread supply of finished animals through the year.
  • Changes in regulation or disease outbreak can destroy a business, take avian flu as an example and the effects on a free range Christmas poultry producers.

Going frozen overcomes a lot of these issues and opens new markets. It has its own problems, mainly around distribution, set up and inventory costs, and marketing. With the increasing number of distribution services offering next day delivery and modern packaging materials providing better insulation, the distribution issue is reduced. The ability to have a product in store for up to 9 months to satisfy consumer demand is obviously clear, but it comes with a significant cost in terms of capital tied up when processing and finance costs are added to the initial costs of production.

The biggest challenge for any start up business is building consumer demand and developing the brand. Whilst social media and the internet have made this easier, it is becoming increasingly difficult for brands to get heard.  Careful consideration needs to be given to your product’s unique selling point to make it stand out from the crowd.

If you are considering direct marketing, please contact William Waterfield at w.waterfield@fcgagric.com or your local FCG office.

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