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Boost your profit margins by exploiting the farm-to-table movement

Growing numbers of small farms are boosting their profit margins by supplying restaurants directly with locally sourced produce

As the local-food movement makes steady progress, the food service industry has not missed a beat. 

Restaurants across the country are increasingly offering locally sourced menu options, flagging them prominently on their menu. Foodies and health-conscious consumers alike are chomping at the bit to dine at restaurants promoting the 'farm-to-table' movement

The value of a 'locally sourced produce' label has soared in recent years, driven by awareness of the environmental implications of 'food miles', a desire to support local or American farmers and recent research showing that vegetables begin losing nutrients from the moment they're pulled out the ground.

Shrewd farmers are exploiting this trend. Bypassing wholesalers by supplying restaurants directly, they're diversifying income streams and growing profit margins

It's not just independent restaurants capitalizing on demand for local, ethical food; chain restaurants increasingly promote menu ingredients as local, organic or from family farms.

That chains as huge as Chipotle Mexican Grill, which is running a Food with Integrity campaign, are embracing the movement budget chains, means lucrative, ongoing contracts for countless small farmers. 

Flourishing

Craig Hetherington, executive chef at Taste, a restaurant inside the Seattle Art Museum, told Entrepreneur Magazine that the proportion of Northwest-sourced ingredients on their menu reaches 89% in season. At the height of summer, the restaurant buys from between 50 to 70 local farms and food suppliers, Hetherington added. 

Richard Conlin, president of the Seattle City Council, told Entrepreneur magazine that small farms throughout the area are flourishing, with annual sales ranging from $10,000 to more than $1m.

But don't assume that the farm-to-table movement is confined to affluent, liberal enclaves like Seattle; farms across the country are benefitting. 

Michael Shuman, research director for the Business Alliance for Local Living Economies (BALLE), conducted a study with his colleagues focusing on local food and its economic potential.

"Economic developers, both in the U.S. and internationally, would be wise to give CFEs [community food enterprises] greater priority as vehicles for creating new jobs and enhancing local food security," he said.

Aspiring farmers from the corporate world are often apprehensive about entering a world where "the only way to get into the farm industry is to marry into it or inherit it," has one farmer told BusinessesForSale.com.

And yet someone with marketing nous could capitalize on the farm-to-table trend in a way that traditional farmers, who often inherit their parents' relationships with wholesalers and do nothing to seek new custom, often cannot.

If you are lacking agricultural experience then just make sure you seek advice from other farmers and hire staff who understand farming and the local land. If it's marketing expertise you lack, conversely, then seek marketing help instead, perhaps from an agency. 

Whether you specialize as organic, raising 'rare-breed' pork or corn fed chickens, You need to understand your USP. Then you must ascertain the best medium for reaching your likely customers, whether through Facebook, Twitter, restaurants trade shows or radio advertisements.

As more people want to know where their food is from and are willing to pay a premium, now appears to be the ideal time for a farmer to cut out the middleman and supply restaurants directly. 

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