We are starting our organic home delivery service, where we are trying to grow and deliver direct organics at supermarket prices. One thing I am wondering about, however, is the logic behind summer tomatoes being $2.99 per kg but summer cherry tomatoes being $2.99 for 250g punnets (i.e. $12 per kg). In terms of growing/picking time can this price difference be justified? Is it the cost of the packing, or just because customers will pay this much? I don't want to start something I regret later, but my experience has been that cherry tomatoes are LOT easier to grow and keep bug-free organically, and it doesn't take long to pick a kg of them. I think that an additional $3 per kg for cherry tomatoes seems all that needs to be charged.
Annie Hope wrote:where we are trying to grow and deliver direct organics at supermarket prices.
My advice- dont do it. You will bankrupt yourself, if not immediately, certainly with time. Supermarkets are able to charge those prices because of high volume and low margins. IMHO, trying to directly compete on price with industrial organic food is a sure recipe for business failure.
Your product will be superior to the supermarket. So charge a reasonable premium. Small farms succeed because of their superior products. Be the best. Dont be afraid to charge more for it. I promise, no matter what, you arent gonna get rich selling tomatoes. Dont feel guilty about charging a decent price for your products!
thanks for your reply. I think we are in quite a different market here in New Zealand. We have thousands of miles of sea between us and cheap-labour imports, with probably the strictest quarantine laws as well. I am actually in the market garden region for the north island (flat river-plains), and the biggest is about 25 hectares and employing at most a 100 people. Most are family businesses. Between me and the capital city 70 miles away, there are over a dozen road-side markets along the main highway owned by farmers that grow a variety of green vegetables and berries, and then sell these and other produce they buy wholesale at 25% to 50% cheaper than they are available in the supermarket. They have been there for decades, so they must make an on-going profit from it.
If I went 70 miles south to the capital, then we could probably get people paying above supermarket prices for organics, but we would need to factor in either 25% extra courier costs and the risk of damaged produce, or the time and petrol of going down once a week to deliver them.
We are in one of the lowest socio-economic regions in New Zealand, and so the big question is whether I can get enough people paying supermarket prices for organics, when they can get up to double the amount of conventionally grown food at a market garden shop. I am committed to the idea of selling local though, and making organics affordable. so I would like to try local first at least.
Location: Blue Island, Illinois - Zone 6a - (Lake Effect) - surrounded by zone 5b
posted 5 years ago
From working on farms for years, I would say that picking cherry tomatoes takes at least 3 or 4 times as long as regular sized tomatoes. Definitely keep track of your labor hours and you'll see the difference. Keep track of all of your expenses, for that matter, and make sure you're not just guessing how much you should charge.
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