Value adding as part of a commercial business model

[Kobus Jooste]

How many people here have costed out and modelled profits with value adding added to your product line up.  The fresh market in South Africa is far better in a value added product - sometimes double the value (pillow bagged lettuce vs lettuce heads, punnet of herbs vs bushels).  The Cap Ex is not too bad at all, and in my models, make the prospect look very attractive.  Models are not the real thing though..............

 

Any thoughts? 

[Carey Ma]

A long time ago I use to work for a corprate catering company and what I learned there is that pre-sold food is much easier than opening a restaurant. That is why I am doing a non profit CSA. Everything is paid for in advance and they take the same risk I do. I get paid for managing  the operation. Everyone wins. Because it is a CSA (membership), we avoid much of the bureaucratic red tape, no slaughter regs or control over our "private" restaurant, no need for certifications of any kind.

I too believe that value adding is almost a must esp. if you have a bumper crop or excess. I had a lot of fruit left over from the peaches, plumbs and esp. the apricots so I made Jams and salves. Bulk price for our fruit is 5-15 yuan per pound depending on time of season and fruit. U pick apricots sell for 15 yuan. One pound of jam sells for 100-150 yuan per jar. Salves go for 40 yuan for a 3oz tube. Everything is bought up by members. Extra income for expansion.

[Kobus Jooste]

Carey - nice system you have going there.  Unfortunately CSA's are not big over here where I stay.  I have a relatively large plot and can get some of my own food production going though, which is what I am working towards now.  The value add you describe works the same this side though.  Makes me wish that I could have my Grandfather's old property - it was a "double plot", basically two urban plots walled together with a house on one and fruit trees on the other.  He had figs, grapes, apricots, peaches, nectarines, plums and a lot of veggies.

 

Where possible, I think urbanites throughout the world will be trying to return to this lifestyle.

Carey Ma said:

A long time ago I use to work for a corprate catering company and what I learned there is that pre-sold food is much easier than opening a restaurant. That is why I am doing a non profit CSA. Everything is paid for in advance and they take the same risk I do. I get paid for managing  the operation. Everyone wins. Because it is a CSA (membership), we avoid much of the bureaucratic red tape, no slaughter regs or control over our "private" restaurant, no need for certifications of any kind.

I too believe that value adding is almost a must esp. if you have a bumper crop or excess. I had a lot of fruit left over from the peaches, plumbs and esp. the apricots so I made Jams and salves. Bulk price for our fruit is 5-15 yuan per pound depending on time of season and fruit. U pick apricots sell for 15 yuan. One pound of jam sells for 100-150 yuan per jar. Salves go for 40 yuan for a 3oz tube. Everything is bought up by members. Extra income for expansion.