[Market-farming] Marketing to restaurants

adriana gutierrez-lagatta at charter.net
Sun Oct 5 15:38:17 EDT 2003

Hi Jim,
Licensing requirements vary from state to state, county to county and city
to city.  Start by asking your agriculture extension service.  At a minimum
you will need a business license - check with your county tax
assessor/business licensing office.   A number of states have fairly lax
licensing requirements for farmers selling what they grow.  Another factor
is whether you are selling wholesale or retail whether you have to collect
and report sales tax.
>This post interested me because I am
> interested in selling greenhouse-grown vegetables to restaurants. Adriana,
> do you have to get any kind of license or permit, in order to sell produce
> to restaurants?

This is more an art than a science since you will not have good cost data
until you have been in production for a while.  Marcie Rozenswieg's
templates provide the basis for good cost accounting which will allow you to
determine your cost of production.  You can probably run some hypothetical
scenarios using them.  Once you figure out your costs (or what you hope will
be your costs) you can set prices based on several methods or a combination
of them:
- Cost plus a fair percentage
- "market" price - the USDA maintains daily data on wholesale prices for a
huge number of agricultural products.  Assume about a 40% markup at the
wholesale level to estimate what restaurants might be paying.
- What the market will bear - if you're the only grower of pea tendrils in
your area and you have a buyer who is willing to pay $x/pound for them, then
go for it as long as you feel it is fair.
>How did you determine the price to sell your produce at?
> What determined what type of restaurants you targeted?

Not always...it's more about finding the right chef who appreicates your
pasion for freshness/quality/unique products.  If it's about price you have
the wrong customer.
>I'm guessing high
> end restaurants and hotels are more willing to offer a better price?

Some states have strict requirements about packaging - isn't it Indiana that
considers any greens in a sealed bag to be "processed" and thus subject to
licensing?  Ask your Dept of Agriculture people....
> as far as I know as long as you are not selling meat or value added
> items (baked or canned goods) there are no permits or licensing needed
> in the US in order to sell to a restaurant.


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