Managing Risk by Diversifying your Consumer Base: Selling to Schools

Tuesday, November 14, 2017 // Molly DellaRoman

November Risk Management

This past September, New Entry hosted a “Selling to Schools” workshop at Clark Farm in Carlisle, MA.  Simca Horwitz, from Mass Farm to School, spoke about how small farmers can connect to their local school districts; while Andrew Rodgers, the farm manager at Clark Farm, spoke about his personal experience selling to schools. 

According to Horwitz, there is a myth that selling to schools and institutions is only a good fit for large farms.  Even though distributing to instituions may not be the core of small farm sales, according to Rodgers, there are benefits of Farm-to-School sales which he “can’t assign a number to,” and which go beyond the bottom-line.  Some of those benefits include: brand recognition among a broad array of constituents (young and older); students know where their food is coming from and often go visit the farm/stand directly with parents (which provides additional direct sales opportunities); and a connection to prospective farm volunteers within the school community.  Additional educational and political benefits evolve as students and residents turn into small farm advocates.  Broadly, all the school interactions add up to a great source of marketing and outreach for farms. 

Distributing to schools can involve some logistical hurdles that farms should plan for before embarking upon this channel. Simca pointed out that there is a difference between schools that have self-operating cafeterias versus those that outsource.  In her opinion, it is easier for a farmer to sell to a self-operating cafeteria that is unencumbered by policies and challenges of an out-sourced food vendor. 

Here are a few additional tips for farms to consider when working with schools and institutions:

1. Wholesale Pricing: When integrating institutional sales into a farm distribution strategy, farm owners should expect wholesale pricing. Most school cafeterias are on a tight budget. 

2. Internal Kitchen Capacity: Farmers should investigate what equipment prospective cafeterias have at their disposal. This key information may change the type of produce/products the institution is able to order. Some cafeterias may not be able to do much processing, so cherry tomatoes and snack-sized peppers, for example, may be easier for them to deal with than whole butternut squash.

3. Ordering & Communication: As with any wholesale account, farmers should investigate what an institution’s communication protocol is for ordering.  Some cafeteria managers are only willing to make a phone call to place orders. Farms need to balance partners’ communication methods with internal ordering systems. 

4. Invoicing and Payments – Depending on the institution, it can be months before payments are received because of a school’s payment procedure, so farmers should not expect school sales to necessarily help with in-season cash flow. Revenue projections and budgets should be adjusted accordingly.

With the National School Lunch Program in effect, public schools are required to serve certain colored foods (think dark green spinach, a rainbow of tomato cherry varieties, bright orange winter squash and deep purple cabbage).  Many schools offer breakfast, afterschool snacks and summer sessions, increasing the opportunity to get fresh fruits and vegetables to our students, and the chance for your farm to increase its wholesale accounts.  Also, if 50% of students qualify for free or reduced lunch, schools can participate in the Fresh Fruit and Vegetable Program.  That gives farmers a leg up to help school’s meet those demands. 

Overall, there are a lot of opportunities to sell wholesale to schools and other institutions such as hospitals, nursing homes and daycares.  New Entry and Farm to School encourage farmers to consider all the various components of school and institution distribution when adding this important channel to an overall farm sales plan.  

Want to keep abreast of even more marketing options?  Check out the Smart Marketing Newsletter from Cornell’s SC Johnson School of Business.  Each month focuses on a different marketing topic from a range of agricultural fields.




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