Restaurants & Grocers

Sales to Restaurants and Grocery Stores

Locally-produced, seasonal, and certified organic food products are increasingly featured in restaurants and local grocery stores. Although technically, these are considered wholesale markets since products are sold to a middleman before going to the end consumer, marketing to local groceries and restaurants offer some of the advantages of other direct sales. Local products will appeal to buyers because of freshness and quality. Personal relationships are important, especially for retailers and restaurants that are appealing to the trend of buying local.

“Personal relationships are important, especially for retailers and restaurants that are appealing to the trend of buying local.”

Benefits

  • Grocers can offer a higher volume of sales
  • Restaurants can offer a higher price (especially on high quality, unique items)
  • Restaurants can be flexible in buying what you have available (daily specials)
  • Lower marketing and delivery costs
  • Lower processing cost for livestock (may take whole animal)
  • Consistent orders
  • May help with farm promotion on menus or in stores
  • Developing relationships with local businesses can lead to other business

Challenges

  • Need enough product on regular basis to make it worthwhile for both farm and buyer
  • Grocers may find it difficult to deal with small volumes
  • Grocers may want prices equal to wholesaler distributors
  • Restaurants may want to buy low volumes and frequent deliveries, which will increase your associated costs
  • Product packaging, labeling, and processing will need to meet state and national health and safety regulations
  • Requested delivery times may be inconvenient for farmer
  • Can be slow to pay
  • Can lose the account if a chef leaves
  • Can be competing with yourself if your farmers’ market customers or on-farm customers decide to buy your products at grocery store instead

Tips

  • Getting the right product in the right quantity at the right time is key to developing and maintaining these markets
  • Collaborating with other growers and crop planning with the buyers are ways to address issues of supplying adequate volume
  • The use of season extension is a way to supply products that these markets desire
  • For meat sales, you need to have a basic knowledge of cuts, and a plan for selling the whole animal
  • Maintain diverse restaurant customers, so trouble with one won’t have as much impact on your success
  • Consider having a good written contract if you are going to do a large volume of business with one market
  • Consider the market or restaurant location and delivery issues before making long-term commitments
  • Remember that when selling to restaurants, loyalty is with the chef

Continue to Marketing Tips.

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      Jon Taggert

      Jon Taggert

Click below to hear audio tips on sales to grocers and restaurants from experienced farmer and marketer Jon Taggert.

This course was supported by funding from the USDA Risk Management Education Division. 

This course was supported by funding from the USDA Risk Management Education Division.