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Market Research - What would you pay for organic, local, dried herbs?

Matt McSpadden

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posted 5 months ago

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Hi All,
I'm working on a side hustle and I could use some input on price to see if its worth it.

I am drying culinary herbs for resale. I do not have the room to grow my own stuff, so I'm buying from an organic farm up the road. I know this raises the cost some. Store-bought, organic herbs, done in bulk somewhere, coming from who knows where... seem to sell for between $5 and $6 per container. These containers are roughly 1" by 4" and hold about 4oz by volume... just the standard kind of spice/herb container from the grocery store.

I have seen some premium brands for more like $8-$9 per container... but again, they are generally imported from who knows where. Due to having to buy the herbs, my cost for the herbs and container is about $6.70 per container. Different herbs go up and down some, but that is the general price range. If I add in my time at $20 an hour... which I don't think is too terrible... then my cost per container goes up to around $9.50 per container. In order to make a profit as if I was paying someone to do the work... I would need to sell for $11 to $12 per container. If I pretend the profit IS my pay... then I could probably sell for more like $8 or $9.

I know many of you dry your own herbs, so this doesn't really apply. I know there are some people who want to support local period, and don't care about price. I'd love to get tons of those people, but in reality, I think I need to tap into the customer who wants to support local farms and local foods, but isn't rich. If you were that kind of person, how much would you be willing to pay for better quality, better freshness, and less of a carbon footprint for your culinary herbs?

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Anne Miller

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posted 5 months ago

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The best way to market a product is to find the source where you would market your product like eBay, Amazon, Etsy or the local farmers market.

Check out what organic herbs are selling for in those place and price your product at a lesser price. That is how I did my eBay business.

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Matt McSpadden

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posted 5 months ago

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Thanks Ann,
The issue is that I cannot find a comparable product. No one is drying local herbs locally. If I price my products less than what is available, then I would end up competing with large companies and would never be able to turn a profit.

Joseph Lofthouse

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A rule of thumb used by many small local producers involves finding a similar organic product from the mega-corporations, and then doubling the price for local sales to your local community.

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Suzette Thib

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Could you test the market with a facebook post? Also could you do preorders? If you don't get any interest, wait a bit and post with new prices and maybe a different or additional ?
I would be willing to pay more for an herb that I get more from, lasting longer in the pantry, (say oregano) than something I am likely to use a ton of (basil), but I guess every cook is different.
Probably under $10 I would be willing to purchase, but $10 and over, I would politely decline.

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Matt McSpadden

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Joseph Lofthouse wrote:A rule of thumb used by many small local producers involves finding a similar organic product from the mega-corporations, and then doubling the price for local sales to your local community.

This is interesting, because similar organic products from mega corporations are in the $6 range. Which would put me at the $12 range.

Matt McSpadden

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Suzette Thib wrote:Could you test the market with a facebook post? Also could you do preorders? If you don't get any interest, wait a bit and post with new prices and maybe a different or additional ?

That is a good idea. I don't have facebook, but it might be good to test the waters a bit in one area.

Suzette Thib wrote:I would be willing to pay more for an herb that I get more from, lasting longer in the pantry, (say oregano) than something I am likely to use a ton of (basil), but I guess every cook is different.
Probably under $10 I would be willing to purchase, but $10 and over, I would politely decline.

This is really good info, thanks.

Timothy Norton

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I am with Suzette in her assessment. I would most likely fall in the $8-10 range with my eye towards freshness.

The timing could not be better, because I am currently drying/purchases spices to refresh my pantry as my supplies has dwindled low. I have found sourcing spices that are touted as organic or better that have gained my trust has been challenging.

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Jamie Moreno

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posted 5 months ago

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Given that you’re offering fresh, local herbs compared to the generic, possibly imported ones, I’d say there’s definitely a market for that. For folks who care about supporting local farms and getting better quality, $8 to $9 per container seems like a reasonable price point. It’s still a bit below the premium brands but allows you to offer something fresher and more local.Your $11 to $12 range sounds fair if you’re aiming to cover all costs, including labor. If your target audience is willing to pay a bit more for high quality and sustainability, you could potentially hit that mark. To make sure, maybe start with a lower price and test the waters, or even offer special promotions or bundles to attract initial buyers.

Derek Thille

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posted 3 months ago

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I do like this idea, in part because I was thinking along similar product lines should we ever want to try our hand at market gardening. It helps that the farmer's market nearest to our acreage doesn't have much in the way of herbs from the current vendors. I think the bang for the buck of growing and selling herbs (fresh and/or dehydrated) is higher than most of the vegetables. Flowers could also fit into this category, particularly edible flowers, but I'm less familiar with that. Another aspect from my perspective would be after market day, putting any fresh herbs that didn't sell into the dehydrator (another "reason" for me to build a solar dehydrator).

More to your point, I think you should also consider your primary marketing points. We regularly attend two farmer's markets. At the one in the city, many vendors are set up with Square or similar options to be able to accept electronic payment. At the small town market, it is still almost exclusively cash based. If you are selling into a cash-based stream, then $10 would be a good price point, reducing the need to make change, which also can make the transaction more efficient. If selling into a realm where electronic payment is more prevalent, then a round number is less critical. Of course, enabling electronic payments will cost you something as a vendor as well.

Another thing to keep in mind is if you are drying passively (air and / or solar) then you effectively have no energy costs, but may have higher spoilage (less likely with herbs than with other things), but if you are running an electric dehydrator, you need to consider that cost as well, both acquisition and ongoing energy costs.

I have seen some producers at the city market who have created value added blends - they've ground down the dried product and blended into "custom" mixes like an Italian seasoning, Greek seasoning, or even a blend that could be used as a tea.

I hope that helps you continue your thought process.

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Matt McSpadden

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posted 3 months ago

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Those are some good thoughts Derek.

One thought back at you, is that I have had at least two farmers tell me that they started drying herbs and stopped. This seems primarily because of time. Their busiest time of the year is during harvest... which is also the dryer's busiest time of year. I'm beginning to think that a separate processing business might be better than a combination with market gardening

Derek Thille

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posted 3 months ago

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Good point...a partnership could do well...use that social capital to create financial capital.

As we are working through the myriad of ways to process food right now (we've been fermenting, pickling, canning several different variations of tomatoes / sauce, dehydrating and eating), we aren't quite keeping up and have some spoilage in the house and that's just a decent sized garden on a personal scale. So, I certainly get the issues around harvesting and processing.

Thinking along those lines, perhaps some thought could also go into potential crop timing so there is some time separation rather than everything all at once. Of course, an imminent fall frost can change that quickly.

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P. Pitcher

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Location: Wet Mountains, Colorado Zone 4b

posted 3 months ago

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The only limitation on your price, is your marketing!

As many folks have pointed out, one of the ways to make these "value added" products is to create blends in addition to having single herbs. Perhaps even blending herbs with a good quality salt? Design a nice label, make sure you have recipes that showcase the potential of your herbs, you may even want to sample some at the market say, blended with a soft cheese? Or butter? Investing a whole lot in a market booth wouldn't be wise this early in the venture, but try to use things you already have to create a strong brand image.

In all honesty, if the farm you buy the herbs from does markets, your best bet is to partner with them and have them sell the herbs. People always prefer to buy from the original grower when they can, and are more willing to pay an upcharge. You could charge them for your time drying, and the cost of packaging, and maybe skip buying the herbs from them. One thing that many grower seem to find, is that you can charge a heck of a lot more for fresh herbs, but it's a touchy market and you'll end up drying a lot anyway.

Matt McSpadden

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posted 3 months ago

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P. Pitcher wrote:In all honesty, if the farm you buy the herbs from does markets, your best bet is to partner with them and have them sell the herbs.

That is not a bad idea. Using their customers to make money.

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