Farm Retail Stores

‘Start small and don’t try to look like a grocery store’ So says Ray Ferri, a second-generation veteran of direct sales from the family outlet. But he, too, has had to adjust to the difficulties of farming near an urban centre and wonders if his children will continue the business their grandfather started in 1945

by DON STONEMAN

Forty acres of apple and pear orchards on Heritage Road, west of Brampton, will soon be cut down and turned into houses by developers. But the board-and-batten farm store of Al Ferri and Sons Ltd., where buyers have come to buy apples and pears for decades, is staying put.

“We have a heck of a location here,” says Ray Ferri, manager of the store that exudes a fragrance of fresh fruit and bears his father’s name. But a prime location within an easy drive of Toronto’s consumers isn’t enough. “What makes our business work is that we grow the apples,” Ray Ferri says.

So Ray and his brother will supply fruit to the store from orchards they planted and manage themselves near Collingwood, nearly 100 miles away.

The need to provide a quality product for their customers is a common theme expressed by farm retailers that Better Farming interviewed for this story. “I’m better to say that I don’t have it than to provide an inferior product,” says Lynda Van Casteren, who sells her family’s pork and other local farm products from a farm near Phelpston, north of Barrie.

Keeping the quality up isn’t easy. “You have to count on family labour. You have to do it yourself,” says sunflower seed and beef retailer Dave Edwards of Innisfil.

“It’s not worth paying someone to do, but it needs to be done,” says South Brant grower George Rapai of the tree trimming he does to produce top quality landscape trees from his farm.

Retailing from the farm appears to be a growing trend and Ferri says everyone he talks to had a good year in 2006. Provincial government promotions about the Greenbelt made consumers aware that there were farm retail stores within easy driving distance of the city.

But putting numbers to the trend is difficult, says Cathy Bartolic, executive director of the Ontario Farm Fresh Marketing Association, which has nearly 200 voluntary farm-marketing members across the province. A recent study commissioned by the association found that on-farm retailing added $116 million in gross receipts to agriculture in Ontario. “It’s hard to get a handle on it,” says Bartolic. What is growing is the need to diversify from producing a commodity.”

Ferri sells more than 80 per cent of the apples and pears his family grows through the Ferri farm store. He says every apple sold is a sale wrested away from a chain store. It beats shipping apples to packers and wholesalers in the fall and “chasing money until next summer,” Ferri says.

Trends far away from agriculture have affected the Ferri operation. Ray Ferri says his father Al saw the need to diversify in the 1960s. By developing a pioneering pick-your-own business and then the store he “slowly weaned himself” from selling through the retail system.

A network of hand-painted signs on area roads points customers towards the store. Inside, attractively labelled bins hold bags of fresh apples sold by the peck and half-bushel and shelves and coolers display unique farm-produced foods. The board walls are decorated with knick-knacks.

In spite of this, Ray Ferri believes that the real work in selling apples directly to consumers is in the orchard. “Marketing will get the customer out here once, but it won’t bring the customer back,” he says. At horticultural conferences, he spends his time at the sessions on production.

Like his father, Ray Ferri is a contrarian. He refuses to treat his direct-sale apples with 1-methyl cycloprene (1-MCP), a ripening inhibitor, noting that Loblaws now demands that its suppliers use this product. Studies show that its use significantly reduces losses in shipment and storage by preventing ethylene production in the fruit. But Ferri says apples treated with 1-MCP “are as hard as bullets” nine months after picking and lack the flavour that natural ethylene production brings out.

While the chain stores push for big apples, he deliberately packages and labels small fruit. “Kids don’t want big apples,” he says, and some adults don’t either.

As long as cost is more important than convenience, Ferri says he has the upper hand. The chain stores appear to have ended a 20-year practice of chain stores selling apples for 99 cents a pound. Ferri says apples now seem to be sold at $1.49 and $1.69 a pound. “I can stay well below that and still make money,” he says. “Their costs have caught up with them.” At least for now.

A good decade for farm stores

In the 1970s, the pick-your-own trend “took off” and other growers jumped into it as well. That’s when the Ferris began thinking about a farm store.

Ironically, the economic boom in the 1980s was hard on direct farm sales, Ferri says. Consumers drifted away from the pick-your-own operations that were popular a decade before. Chain stores emphasized convenience and consumers bought into it. Flush with cash, parents took their kids to the newly opened Canada’s Wonderland for a day out. Harbourfront was a big federally-subsidised project in downtown Toronto that celebrated bilingual culture in the 1980s. Ferri says every time Harbourfront ran a big weekend event his business went down. He was happy to see the programs die when the federal government abruptly ended the subsidies.

By contrast, the 1990s were good for farm store business, Ferri says. “When you are in a recession, everyone is looking for value,” he says. A trip to the store was a day out for the kids as well as offering cheaper fruit. But, with two and even three generations of customers coming to the store, he’s not resting on his laurels. Always look for new business, he says. “Growing is a long slow process. Going downhill happens fast.”

Ferri’s advice to a retail newbie is to start small and use hand-painted signs rather than those that are slickly produced. “Don’t start looking like the grocery store,” he suggests.

It’s better to say you don’t have a particular apple variety than to sell fruit of a suspect quality obtained from another grower, he says.

Moreover, it’s important to be unique. “People come here to get stuff that they can’t get anywhere else,” says Ferri, who sells other farms’ products but drops them if the supplier starts to sell at a chain store.

He cites a standup cooler for frozen sauces, muffin mix and batter as one of his best investments. An expensive electrical upgrading was necessary, but it paid for itself fast because customers could see the products.

When the Heritage Road orchards are gone, the pick-your-own operation which launched the Ferri retail business will come to an end. Running a PYO is stressful. “There are good customers, but there are disrespectful ones too,” Ferri says. He suspects that it was a disruptive and destructive customer who spray-painted over his signs after being ejected from the property several years ago.

Ferri says it’s not realistic for everyone to be in the value-added business. “We can’t all make pies and make money at it,” he says.

In the long run, the Greenbelt isn’t going to save precious and productive farmland, Ferri believes. He predicts that many farms will become 100-acre estate lots and that “they won’t contribute significantly to the production of anything,” with new owners using the farm property exemption to keep their taxes down.

Ferri and Bartolic agree that the province could do more to help on-farm retailing. The province does fund the association to the tune of $20,000 a year, helping to develop reports on the state of the industry.

Bartolic says Foodland Ontario a branch of the Ontario Ministry of Agriculture Food and Rural Affairs is promoting Ontario foods. “That will help us down the road,” she says. “Local food is the buzzword out there, like ‘organic’ was 10 years ago.”

The Ontario Farm Fresh Marketing Association studied municipal bylaws to see how they affect farm retailing. Some municipalities are quite receptive to on-farm retailing, she says. In others, there are roadblocks.

Bartolic says the first wave of farm retailers is turning over to the next generation of operators. Farm retailing “does help keep the family farm in the family,” she asserts. This comes out in the association’s report, she says.

Is there a future for a third Ferri farming generation? Ray is quick to say “no.” The family business “stops here,” he says. “We tell the kids to go to school and get a job.’” Then he admits that his youngest children might still be interested in running the farm that their grandfather started in 1945.

Selling the business isn’t much of an option, Ferri notes. So much of the business is related to customer goodwill that a sign saying “under new management” would be the end of it in a few months. BF

Selling to customers on the ‘road less travelled’

Lynda and Nick Van Casteren’s 3,000-square-foot store on their Simcoe County pig farm didn’t take shape over night.

Farm retailing “is not a field of dreams exercise,” says Lynda Van Casteren, referring to the popular movie starring Kevin Costner. “I wanted to know that customers would come before I built this.” Lynda manages the store, while Nick takes care of the barn. The Van Casteren family finishes pigs from 140 sows in northern Simcoe County, and sells 20 per cent of production through the retail store located in front of the pig barn.

Lynda Van Casteren started retailing in 1989, selling her sons’ 4-H pigs, and then worked her way into farmers’ markets. The first farm sales were made from a room in the front of the farmhouse, then from an addition. In the process, she tried to educate consumers “not just on agriculture but also about how to prepare food.”

Today, consumers want lean cuts, butterfly chops and gourmet-style sausages. Expansion into other products was natural. Lynda points out that a customer who buys sausage “also wants pie for dessert.”
The Van Casteren farm store is located on a paved county road and gets traffic from people who “don’t want to travel the 400 series highways” on the way to cottages in Gravenhurst and Huntsville area. Lynda says “there are an amazing number of people who cottage and live in London and Listowel and places to the west.”

Like apple grower and retailer Ray Ferri, Lynda Van Casteren says starting small and growing the business is key. She began by selling her own pork and added other items, including locally produced maple syrup “because people wanted them.” New items include certified organic and gluten-free grains and pasta sauces.

Lynda’s advice to anyone starting farm retailing is to talk to everybody you know who is already in the business, and ask them what they did right and what they did wrong. “I still rely heavily on my customers to tell me what it is they want me to offer them,” she says.

Her customers want to buy local products, Lynda says. “They have a genuine interest in contributing to the viability of the family farm. They don’t mind buying something in brown paper, because they know that is being a good steward of the land rather than putting more plastic in a landfill.”

But selling meat in brown paper means gaining their trust first. “They want quality. Their perception is, ‘if your neighbour grew it, I bet you it’s good.” And Lynda is particular about what she sells.

Lynda says the retail store was the only path the couple could take to increase income from the farm. “When we did that, the buzzword was ‘diversification.’ I liked the idea of not having all of my eggs in one basket. Also it’s more fun talking to people than pigs,” she says.

The four-year-old retail store provides jobs for siblings and their marriage partners.

Lynda says she isn’t afraid that high gas prices will drive her customers away. “The people who can afford a cottage are still going to travel,” she says.

Like her customers who take the road less travelled, Lynda Van Casteren is glad that her family took the value-added route. “We don’t have a crystal ball and I don’t know what will happen to the pork industry, ” she says, noting that they shipped pigs to a packer in Quebec for many years. That packer had financial troubles and Lynda and Nick started directing their pigs to Maple Leaf in Burlington just weeks before its chief executive officer Michael McCain announced that the plant would be sold.

With many eggs still in the commodity pork business, the Van Casterens are watching developments closely. BF

Selling sunflowers and beef near Barrie: ‘It’s a ton of work’

Proximity to a growing urban population is both a curse and a blessing for a farm, says Dave Edwards, 37, who farms with his father John and mother Rosemarie.

Edwards Farm store is located west of the town of Innisfil (pop. 35,000), south of Barrie. The county’s official plan calls for another 20,000 residents within 10 years, and a developer filed a proposal recently to boost Innisfil’s population to 105,000 people in 20 years. a branch of the Ontario Ministry of Agriculture Food and Rural Affairs More people means more traffic and difficulties moving machinery and more customers for the birdseed they grow and the freezer beef from cattle raised on their feedlot.

The Edwards added beef to their birdseed retail business after BSE struck in 2003. The cool climate limits crop yields. Dave says: “We can’t make money growing corn unless it goes into the blue silo” to feed as many as 350 head of beef cattle housed at a time in a slatted floor barn. Since Dave came home to farm 10 years ago, the Edwards have branched out into other products, especially sunflowers. Last year, they grew 80 acres and sell some through the retail store to drive-in customers and the rest on a wholesale basis.

Many farmers try growing sunflowers, but few plant a second crop, Edwards says. The oilseed is vulnerable to a variety of moulds and is tough to harvest. The Edwards searched a long time before they found a modified corn head for their combine that was suitable for sunflowers. A further challenge is that a wet crop can’t be dried and the oily hairs from the seeds will catch fire in a conventional dryer.

As for the 1,500-square-foot retail store, “it is a ton of work. We had no idea how much work it would be,” Dave admits. He notes that the farmer retailer ends up being the middle man between the butcher and the customer. “You have to talk the butcher into doing what you want to be done to satisfy your customers.”

What’s more, the store has to be kept open during the week, even when there are few shoppers. Thursday, Friday and Saturday are the big customer days for both birdseed and for beef. Sunday shoppers can press a buzzer beside the locked store door to summon someone from one of the houses nearby. Dave and his wife live next door. “We aren’t open, but we are,” Dave says.

Rosemarie adds that the retail business is being built slowly and without advertising.

Consumers buy at a farm store for either ecological or health reasons, Dave says. “It’s not for convenience.” Dave warns that you can’t use the retail store “to get rid of cattle that wouldn’t make you money at market.”

Beef is priced at $2.40 a pound for all cuts. Buyers get $5-a-pound steaks along with $1-a-pound ground beef.

One of the keys to moving beef is to price it so that all the cuts sell at once, Dave says. He points out that his father and grandfather were both in the retail grocery business, so they know something about pricing meat to sell. A computer program from the Beef Information Centre also helps with pricing.

Another key to success is a debit machine. They put one into their store as soon as they opened it.

To keep their tax assessor happy, they sell only produce from their own operations. That includes kernel corn for customers who want to feed birds, deer or fuel corn stoves. A 50-pound bag of what Dave calls “super clean” corn sells for $7. BF

Diversifying into trees: protection from ‘an economic tsunami’

South Brant farmer George Rapai saw the writing on the wall for tobacco growers years ago and opted for diversification. His farm enterprises have included garlic, peppers, specialty onions and Christmas trees. He still grows ginseng on the family farm south of Burford but has branched into landscaping.

With the end of the tobacco industry in sight, he predicts “an economic tsunami for the tobacco area. I am trying to insulate myself and protect myself from it.”

Rapai, who is 54, is accustomed to growing ginseng, which yields a crop once every four years. Christmas trees take seven years to grow out and landscape trees take eight to 15 years to produce a pay cheque.

The Rapais first planted trees in the 1980s, starting with spruces and scotch pines. They branched off into firs, and then into deciduous plantings and specialty conifers. They have both clay and high organic matter in their soils. Landscapers prefer trees grown in clay because it produces a better root ball than sand.

Ginseng must be rotated after a crop is taken off and former fields are being replanted with trees.

Ginseng fields contain a high level of nutrients, Rapai explains, and are weed-free, necessary for top quality plantings. Weed growth causes bottom branches of trees to die off and trees are devalued.

Delivering to garden centres has been a boon. Garden centres “didn’t want to invest in large floats and large equipment,” Rapai says, and were looking for a more direct source of trees. Rapai bought a used digger and delivers directly to the garden centres, which get high quality trees more cheaply than from a wholesaler. The landscaping business requires considerable investment in equipment, he says. The old digging machine is fine on the farm, but new machines are required for a job site where a breakdown isn’t easily forgiven.

Also the season for digging trees is short - from “frost-out” in March or April to June. You quit digging when the trees bud, Rapai says. “It’s the kind of thing you only learn as you go.”

Rapai has graduated to planting trees in new subdivisions in London, though last fall’s weather made it difficult.

George’s wife Sherry adds that they have good support from people because they are farmers. But sometimes they run afoul of rules. George can’t work on some job sites because his company isn’t unionized and cites the new Toyota plant site in Woodstock as an example.

Tree farming “is still farming,” Rapai stresses. He isn’t good at growing seedlings so he buys them, but knowing where to get good ones is another skill. So is knowing how and when to prune and shape trees. It’s different for every species, he says.

Trees are grown in a field to a certain stage and then “undercut.” That means that the tree stays in the same place, but the roots are cut back. The tree sends out tiny roots that grow more closely grown around the tree’s base. A tree is undercut three or four times before it is sold, Rapai says, increasing survivability.

Rapai emphasizes that “you have to know what you are doing, not in one species but in several species” in terms of where the buds are and when you shear the trees. “It’s a whole re-education process,” says Rapai. BF