When I first left the large CSA farm I had helped manage for my husband’s small wholesale tomato operation, I was sure that he’d swoon over my stunningly fast tomato picking and packing skills. Many years of harvests for the CSA had taught me to make lightening quick decisions about which tomatoes were market firsts, which were seconds, and which were compost, and within minutes have a box packed, labelled and ready for delivery. But the first time he looked at the boxes I packed, I saw his brow furrow. Later, I walked by the pack room to discover him sorting through the cases I had already packed, and grading out thirty per cent of the tomatoes I had deemed marketable. I’m not sure what offended words I exclaimed, but for the rest of the season, we feuded (with the spirited energy of a loving couple new to farming together) about how “perfect” a wholesale tomato really ought to be.
Packing tomatoes for wholesale buyers.
The rift between my husband and myself underscores two very different approaches to selling in a wholesale market. My husband’s approach is to deliver a product that meets the market standard of uniform and unblemished produce. Since people pay a premium for our organic tomatoes, my husband shudders at the thought of anyone thinking they were not superior to the less expensive conventional tomatoes displayed alongside them. My perspective was that we shouldn’t care too much because we were more or less faceless in our wholesale markets, and the price we received as growers was far less than the customers paid. I agreed that we should pack quality tomatoes, but I wanted customers to relish the freshness, flavor, and organic integrity of our product while they also learned that a real tomato is not always a perfect seven ounce glistening red sphere. And on a practical note, I thought we could be more profitable if our grade out rate wasn’t so extreme. Prior to joining my husband’s tomato venture, I assumed wholesale markets were not within the reach of small scale producers like ourselves. When I heard the word “wholesale,” I pictured the fields I once saw travelling in California, with a dozen workers picking Brussels sprouts onto a conveyor, which loaded them into a machine that stripped the sprouts off the stalk right there in the field. With these images in mind, it really hadn’t occurred to me that it might be profitable for a small farm to sell to wholesale markets. But as growers know, determining the best market for your vegetables requires sophisticated decision making (and an entirely separate article) but in short, it depends on location, local market demand, crop selection, labor, and grower personality/ preferences. For my family, wholesale makes a lot of sense—it offers relatively reliable sales, it helps us move large volumes of one crop at once, and it frees us up on weekends. Here are a few considerations regarding wholesale growing:
  • PRICE. For growers accustomed to farmers’ market sales, wholesale pricing can be laughable. While our certified organic tomatoes would fetch us at least $4 per pound at a farmers’ market, we sell them for $2.80 per pound, and sometimes less, to our wholesale accounts. Over the course of a season, this adds up to thousands of dollars of potentially lost sales.
  • Wholesale marketing is built upon clear and professional communication with buyers. While I dearly miss the warm relationships I had with our CSA members, I’ve also found some relief in the straightforward relationship with wholesale buyers. Our buyers also do a great job of labelling our produce in their stores or on menus, so even if we don’t know all of our customers, we still feel confident that people know that our farm grew their produce.
  • PRODUCE SAFETY REGULATIONS. Depending on the details of your farm’s size and markets, many growers are subject to the Produce Safety Rule as specified in the Food Safety and Modernization Act (FSMA). FSMA is the new regulation for food safety on farms. Contact your local cooperative extension office—you can find your local listing here—for technical support and education about these new regulations. Many buyers also require a voluntary third party food safety audit through Good Agricultural Practices (GAPs). Regardless, a food safety audit is a good idea before you begin wholesaling (or sales of any kind).
  • Depending on what level of liability your farm insurance policy covers, many distributors and wholesalers will require additional product liability insurance. Be sure to communicate with the wholesale buyer to understand the necessary requirements.
  • COOLING/ TRANSPORT. The equipment required to cool and transport large volumes of produce may be costly and should be a consideration before deciding to grow for wholesale markets. Appropriate cooling and storage not only extends the shelf life of produce, but is a requirement of food safety protocols.
  • Investing in large plantings of crops based on the promise of a wholesale market can be a risky venture. As in all aspects of farming, things can change quickly, from a grocery store closing, to other farmers entering the market, to customers having exceptional gardening years, to complications from road construction, to who knows what else. A meeting in the winter months with the buyer or a letter of commitment can make sure you both are on the same page. But ultimately, diversity in markets—as with crops—helps spread out risk.
  • CROP SELECTION. Wholesale markets largely dictate the variety selection on our farm. While customers in stores buy more and more heirloom and interesting varieties, there is still a predominant demand for a classic red slicing tomato. Furthermore, since we are trying to move a high volume of these tomatoes, we end up growing hybrid varieties (for example, Arbason F1) that produce high yields of quality fruit all season long. While the flavor in these varieties is still tasty, they don’t compare to some of my favorite heirlooms (like Brandywine). The same holds true for most other wholesale vegetables—your variety selection will likely veer towards reliable hybrid varieties.
  • VOLUME AND SUPPLY. One difficult thing about smaller growers like ourselves committing to a wholesale market is making sure that you have enough consistent product to meet the demand. Keeping the buyer well-apprised of the forecast several weeks in advance is critical. I’ve learned the hard way that optimism about future harvests gets me into more trouble than a conservative estimate does.
So, while entering the wholesale market might add one more layer of complication and stress to your busy life, it might also simplify things. One thing I love about wholesale is that it allows our crops to reach a broader and more diverse audience than we can reach through direct marketing. Finally, it is wise to let the numbers guide you in deciding whether or not to wholesale by working with a professional farm planner or business advisor. On our farm, my husband and I have reached a sort of truce about tomato grading. We’ve learned to distinguish which wholesale accounts we want the very best tomatoes to go to (retail grocers), and which accounts are less picky because they are slicing the tomatoes immediately (delis and restaurants). Understanding our buyers has helped increase our profitability and move more tomatoes (in addition to keeping peace in our personal lives). And while we both imagine there may be a time when we want to return to selling at farmers’ markets, for now, we are relishing weekend time on the farm with our family.