Value-Added Innovation for Hawai'i Growers workshop
Ken Love speaks to a group of enthusiastic workshop participants in Kalaheo, Kaua'i on March 27, 2013.During the last two weeks of March, over two hundred island residents took part in a statewide workshop series to educate small-scale farmers and producers about adding value to their enterprises. The workshops, sponsored by the State of Hawai'i Department of Agriculture Specialty Crops Program, were presented by Craig Elevitch and Ken Love, Hawai'i Island locals and leaders of the sustainable food movement in Hawai'i.
The workshop, "Value-Added Innovation for Hawai'i Growers: Making the Family Farm Profitable" focused on ways to enhance locally grown and produced products in order to create more profitable and sustainable small agricultural businesses in Hawai'i. Workshops were held in Hilo and Kona, as well as on Kaua'i, O'ahu, and Maui, and registration was free of charge.
Some of the topics covered in the three-hour workshops included crop quality, processing, branding and packaging, certification, customer service, niche markets and pricing. Attendees of the workshops have been involved in Hawai'i's local food movement in different ways. Some were farmers, some were producers of local products, and others were just coming to learn more about small-scale food production and the feasibility of farm-based enterprises.
Craig Elevitch and Ken Love have experience as growers as well as entrepreneurs, and shared a wealth of information from personal experience, as well as research from the local food scene in Hawai'i. At the basis of the concept of “value-added” is the move away from commodity products towards more specialized products that are differentiated in the marketplace.
Selling unprocessed macadamia nuts is often a losing proposition for farmers in today's market. Growers are developing a wide range of value-added mac nut products that are profitable.Take macadamia nuts, for example. Dozens of Hawai'i farmers grow macnuts, and may sell them at the farmers market, supermarket, or to wholesalers. Those buyers will only provide the grower with the market price for that commodity. Since prices for commodity crops are low, growers will often need to produce large quantities in order to make a profit. If, however, a macadamia farmer develops a mac nut added-value specialty product, he differentiates his product from the rest of the generic commodity, and increases its value in the marketplace. Adding value can be achieved in many different ways. Macnuts could be roasted and flavored, baked into confections, or turned into butter.
A producer may choose to market one specialized product, or to create several different products within the same brand. With some creativity and good marketing, a generic commodity product can be turned into something much more desirable, and valuable to the consumer.
One of the most important themes from the workshop was diversification. From crop selection, to processing, to markets, diversity is key. Diversifying a small scale enterprise is a way to build-in resilience, and ensure some level of success despite potential or unseen failures. At the point of crop selection, farmers can choose to grow several different crops, or even just different cultivars of the same crop. In processing, one can create many different products, or a base product with many different variations. And as far as markets go, Ken recommends growing your customer base, and not putting "all your fruit in one basket!" By diversifying your small-scale enterprise, you are never relying on just one crop, product or market to sustain your business.
The human, or relationship aspect to small business was another key component of the workshop. This touches heavily on customer service. Since small-scale producers don't usually have the marketing advantage that larger companies do, it is crucial that person-to-person interactions are prioritized. This includes the relationships to individual customers, as well as with stores, restaurants or whomever you may be selling to. Customers who are looking for a locally grown or produced item want to know: What makes your product special? What makes it worth more than an imported alternative? Customers need to know what they are getting, and there is no better way than to hear it directly from the source. By sharing your story, and the story of your product, you are giving your customers an experience that they will remember.
The most important aspect of any business is whether or not you are able to make a profit. If you can't cover your costs of production, your business will not be sustainable and you will be forced to do something else. Knowing your costs of production is essential in making your enterprise successful. Some value-added products cost more to produce than others. It is important to calculate all of your costs as a producer, from land and equipment, to labor, packaging and marketing. These costs need to be included in the price of your product. Some products might not be economically feasible when you take all the costs into account. It is important to be creative and continue to try new things in order to discover which products will work best for you and your business model.
One key to success is to differentiate one's products in the marketplace.A few workshop participants were concerned about other people copying their ideas after going through all the hard work to develop and launch a product. In response to this, the workshop facilitators encouraged producers to constantly find ways to improve on what they are doing through product quality, customer service, and branding. If a customer decides to support a new competitor, rather than continuing to buy from you, it could be a sign that there is a need for improvement in your operation. Keeping up-to-date on market trends and always being willing to try new things will help your products remain fresh and alluring to your customers.
The quality of your product and the quality of your service is ultimately what your customers will be willing to pay more for. Customers prefer suppliers that deliver the same top quality products time after time, with exceptional customer service. Making sure that the product you produce is what you would expect as a consumer is another way to ensure top quality. When a customer knows that a company and product are reliable and consistent, they will have little reason to look elsewhere.
As growers and producers in Hawai'i, we have the opportunity to create a huge range of exceptional local products. Our abundant natural resources, year-round growing season, and the wide variety of crops that can be grown in the Islands opens a world of possibilities. From wine and tea and coffee and chocolate, the potential for artisan quality, value-added local products has never been greater. If you value fresh food and a vibrant local economy remember to support the growers and producers of Hawai'i who are helping to make these ideals a reality.
A publication based on the content of the workshops is under development and will be available in May 2013. Mahalo to Craig Elevitch, Ken Love and the guest speakers in the workshop series. Your dedication to the local food movement in Hawai'i is incredibly appreciated
Ursula Schaefer grew up on the Big Island and is a currently interning at Permanent Agriculture Resources with Craig Elevitch. She is inspired to study, practice and teach permaculture in the tropics, and will work with small island developing states to sustainably increase food self-sufficiency.