Ep. 110 Navigating Value-Added Food Businesses with Emily Marrison
- Transcription
Speaker 1 (00:08):Welcome to AgCredit Said It, your go - to podcast for insights on farm finance and maximizing your return on investment. Join us as we talk to industry leaders, financial experts, and area farmers, bringing you skillful advice and strategies to grow your farm's financial future. AgCredit Said It, where farm finance goes beyond the balance sheet.
Libby Wixtead (00:40):Welcome back to another episode of AgCredit Said It, where we take you beyond the balance sheet. I'm your host, Libby Wixted, and today with me, I have Emily Marrison, a family and consumer science educator for Ohio State Extension. Welcome, Emily. We're so happy you're with us.
Emily Marrison (00:56):Thank you so much.
Libby Wixtead (00:58):So let's start off with what is your role as an FCS educator with Ohio State and how do you work with farmers and food entrepreneurs?
Emily Marrison (01:07):Sure. I've been an Extension educator in Coshocton County for 14 years now, and I kind of have a unique story in Extension because six of those years I was an agriculture and natural resources educator for Extension in Coshocton. And then these last eight, I've been family and consumer sciences, which is kind of an interesting combination, but that's because my background is food science. And so even though the subject matter I've taught has changed a little bit between doing both of those different program areas, the one thing that's been constant in all of that is this connection to food science for both producers and then now more for consumers. So whether that's food preservation, training, food safety certification classes for those that are doing food service or helping food entrepreneurs, that's pretty much what I've been able to do all these years in extension.
Libby Wixtead (02:02):Yeah, you have a really unique background. I would think that a lot of people who want to go into family and consumer science would not have started off as an ag and natural resource educator. So that must provide you with a lot of background and intersecting farmers and agriculture with the consumers.
Emily Marrison (02:22):Yeah, and it's kind of neat to be there at the interface because I feel like I can have a perspective of what producers are thinking and where they're coming from, but then also what the consumer is thinking. And so I hope that I can bridge between the two and especially help from a business standpoint and a food safety standpoint with both.
Libby Wixtead (02:44):Yeah. So for those of us who may not know, when you talk about value added in the context of agriculture, why is that becoming more popular? And I guess also what does added value mean?
Emily Marrison (03:01):Sure. So yeah, you're right. It can be very broad. There's a lot of different things that can come into what value added means. USDA has their own definition for value added. Of course. And has five different categories of things that would count under that. One of those being energy production. So that's definitely not what I, in my world, what I think of as value added. But two of those that I'd say the categories from USDA that I think about the most are a change in physical state. So if you think about that, it's like processing a raw good into a new form. So in my world, that could be turning fruit into jam or turning milk into cheese. So when we think about that, it's like it could be sold as a commodity on the commodity market, but I as the producer am going to do something else to it to add more value to it so that I'm getting higher than what the commodity price is.
(04:02):So that change in physical state is usually one of the aspects, but another is locally produced. And so in this case, it's just the fact of your location and how you're marketing it and selling it that perceived value to the consumer is enough that they are willing to pay more for it. And so I especially think in that case about freezer beef or freezer pork or other types of meat, poultry. So those sorts of things where people are saying, "I want to get this from a local source." And so that in itself is what adds the value to the product.
Libby Wixtead (04:39):Yeah. So obviously just listening to all these farmer markets are popping up, consumers are demanding more of this local feel and it seems like farmers are really taking on. Why do you think this is becoming very popular amongst farmers and I would say even young farmers?
Emily Marrison (05:02):I think part of the draw is that consumers really do have a desire to know more about where their food is coming from. And I worked for a large food company for a decade before I came to Extension. And so to me, it is a litle bit heartbreaking that there is as much mistrust as there is in the food industry because I know a lot of really great people who work for large companies and mass produce very safe food that is made from our agricultural commodities. At the same time, consumers just have a desire to be more connected and not for it to be this just mass-produced whatever product. And so I think we're poised with a lot of our, especially younger producers that have grown up in this time and they see that they can meet that need, that they also have a desire for more of this connection to the consumer as well and not just selling their products in a commodity market kind of aspect, but they also want to have more of a relationship.
(06:10):So I think it's that kind of perfect storm where consumers want to know their producers more and producers want to know their consumers. And we're seeing, like you said, especially a lot of our younger producers that are taking advantage of that.
Libby Wixtead (06:25):Yeah. And just had this conversation table today and it kind of hit me where I think too, my generation, I mean, I'm starting to age out of the young farmers, but I think we are at that point of we've been told, share your story, share your story, share your story. And our parents are the ones who are like, "I'm not sure I want to do that. I don't know if I want to invite people on my farm and really share that story where we're so much more open as connections to our consumer. So just in your explanation of how that's full circle for me even just today at our lunch table and actually having that conversation with the generation that's coming up behind me and just listening to how they're connecting with consumers and this particular person was in marketing. So that's just ironic of how you described that.
(07:22):So what questions do you hear often from farmers that are interested in starting this value-added food businesses?
Emily Marrison (07:34):So most often the first kinds of questions that come my way, especially from my colleagues that are all around the state in different extension offices every place is I don't know where to start. How do I even know where to look for what these rules are? I want to do this the right way. I want to make this product the way that I should. And if there are rules, I'd like to follow them because I don't want to get in trouble. And so that's usually where we start. I think also it's cottage foods specifically. In case listeners are not familiar with what cottage foods are in the state of Ohio and in many states throughout the United States, there is an exemption to licensing certain types of food that you can make in your own home and sell those. So you don't need a license for that.
(08:28):In Ohio, there's a very specific list of foods. So it's really going to be things that are low risk of making people sick. So Just
Emily Marrison (08:36):By the inherent qualities of that food, whether it's a baked good or a jam or a jelly or some kind of a dried mix, all of those sorts of things, we don't really think about it, but they don't support pathogenic growth for these microorganisms that make people sick. So they're safer things to make. And so that's why we can make and sell those without a license. And a lot of times people are calling and asking, is this product that I want to make, does this fall underneath being a cottage food or am I going to need some kind of a license or go through an inspection in order to sell my product?
Libby Wixtead (09:15):So with that, are they able to make that food in their home and cross state lines? Because that was something that has been brought up before.
Emily Marrison (09:25):Yeah, so it is very specific to the state of Ohio. And like I said, other states have their own cottage food rules, but if we make something in the state of Ohio, it needs to be sold in the state of Ohio. Now that can't stop someone from coming across the border and buying your product and taking it back home. But as far as your selling and marketing, it needs to be within the state.
Libby Wixtead (09:52):Yeah. I just think of younger people wanting to sell things on Etsy and some of those other type of platforms, which I'm guessing you're going to have to have some other things in place, which I think we'll get to here in a little bit. So I guess let's start there. Beyond regulations, which we'll get to in a minute, what are some of the first business planning steps someone should take before launching a product? And maybe what's some of the costs that they may anticipate to have to pay upfront?
Emily Marrison (10:26):Sure. So there's so many factors that go into this depending on what kind of product it is that you want to make, whether you're doing baked goods or whether you're doing freezer beef or something in between. But we do have a course through Ohio State that we were able to do with a grant a couple of years ago. And as we go through this online course with folks, one of the first places we start is with the idea. So just making sure that you are completely behind whatever your idea is and really thinking through sometimes it can be a little romanticized when people think about having, especially if this is kind of like a side hobby gig kind of thing. I'm going to earn some extra money by doing this. How much time is this really going to take? And also, like you mentioned, what are the resources that are going to be required?
(11:21):So I think the first place to start is just really having a clear picture of what your idea is and how you're going to accomplish it. And then the next things that we talk about in this course is looking at
(11:36):Then how you consider whether you will need insurance for this because sometimes your policy that you have at the home or farm maybe doesn't cover something about of selling food into the general public. And then we also talk about marketing. So I think all of those things are a part of your business planning of, "Hey, I have a passion for this. I really want to make this and I want to sell it. Do you have a good idea of how you're going to sell it? What is that method going to be? Are you going to do this from your home or from a farmer's market or whatever that case may be?
(12:20):How confident are you in where you're going to be able to sell this? And then as far as those costs, I think that from an equipment standpoint, sometimes people are not sure what exactly they need. And you don't always have to get the latest, greatest things for your kitchen if it is more of a kitchen type product. But if you're going to end up, this is a successful thing, I'm going to go beyond what's just in my kitchen and we're going to have to build another structure on our farm and this is going to have to be inspected. Those sorts of things and the costs are going to grow so much more. So I think just really thinking through the scale and the time, and that can just depend on what season of life you're in. I do talk with a lot of folks that are, they have younger kids, they want to start teaching them some of these kind of more business aspects of things and really do things together as a family.
(13:28):What are your ultimate goals? If your ultimate goals are to have family time and to have learning and experiences and be able to, like you've mentioned earlier, tell your story and share this more so than maybe making $2 million, then that's going to affect what your business plan is really going to look like.
Libby Wixtead (13:49):Yeah. So just in summary of what you said, I think it's really just starting off and really thinking through that business plan and setting those goals upfront.Because back in college, my husband's family, they sold meat at a farmer's market and that was every Saturday from May to September. And that was one farmer's market and we worked almost every Saturday and that was such a time commitment. And to come to find out most of the people at that stand, that was not the only one they were working at. They had to hire other people to go to another farmer's market and then doing them throughout the boat. That is a real big time commitment. And to really think that through I think is a really good point of, okay, how are you going to get your product out there? And like you said too, having people come to your farm, what does that insurance policy look like and how does that cover?
(14:45):So let's talk about regulation now. What first regulatory step someone should take before selling a value-added food product?
Emily Marrison (14:57):So much of that really depends on, again, what it is that you want to produce. I think two things that can help understand, so we have a little bit more patience maybe with the regulatory process, is that as a food producer, your product is going out to the general public. So we've been oftentimes used to making our own food for our own family or friends, and you may have certain habits in your kitchen or around your farm that are fine for you and your family. But when we're talking about a food product going out into, this is a public health concern for this to go out into the world. And so there are certain procedures and things that need to be followed to make sure that it's the safest product that it possibly can be. So that really is the heart of where rules and regulations are coming from, is to ensure that that is safe for the consumer.
(15:58):And the other thing that's different is that we also often will be making food to serve right away to people. And in general, from a food entrepreneur standpoint, we're thinking more about that packaged food that's going to be eaten in the future
Emily Marrison (16:18):In the case of freezer beef or something like that, it's something that's going to be consumed later. And so from a food science and food safety standpoint, there's a lot of things that can happen when you have more time in a package with a food. And so there's also regulations and rules that have to be followed that way.
(16:35):In general, there are two regulatory bodies in Ohio that deal with selling food. And so that would be the Ohio Department of Agriculture and your local health district. And depending on where you live in the state of Ohio, you may be close to multiple health districts. Sometimes there's one for the entire county. Sometimes there's one for a city as well as the county. Sometimes multiple cities within a county can have a health district. So I'd encourage you to definitely know what health jurisdiction you fall under from a local standpoint. In general, when it comes to packaged goods, that's going to fall under the Ohio Department of Agriculture. And then if it's more of through immediate service, like think restaurants or food trucks, that's going to be with the health district. But then there's this whole area in between and that's usually where we're like, "I don't know which one do I contact?
(17:36):Is this an ODA question? Is this my local health department?" An example of that would be you've talked about farmer's markets. So when you're selling at a farmer's market, if you're selling cottage foods, remember we talked about how that's exempt from licenses, that can be sold without any kind of a license at all. But if I'm interested in selling eggs that are from my farm or freezer or beef, and I want to sell that at the farmer's market, now I'm going to need to obtain a low risk mobile food establishment license, retail establishment license from my local health district in order to be able to sell that. So I'd say in general, one of the best places that you can start is to look. We have a website through Ohio State called Farm Office, which has loads of resources for all kinds of things from a farm business management standpoint, but we have a food section on there.
(18:35):And so there's a lot of questions that can be answered there. But in general, your local health district usually has very helpful folks that would be able to tell you, "Yep, this is something that falls under us," or, "No, we think you need to contact ODA." But if you're not into calling folks yet, that can be something where you start by going on that farm office website.
Libby Wixtead (18:59):Yeah, there's lots of resources out there. It sounds like that can be very confusing on somebody has an idea of, "Hey, I want to do this, but okay, where do I go? Where do I start?" And I think that goes back to what questions do you hear most often and where do I start? So let's talk about then on the labeling side of things, because I think that goes from the regulatory piece into what do you have to do in terms of labeling to be in compliance and what are some key things that are easily overlooked when you're starting out in one of the industries?
Emily Marrison (19:40):Sure. So the label in general is meant to communicate information to the consumer. And there are some certain aspects about the label that are requirements. I've been talking a lot about cottage foods and how you don't need a license, but there is a very specific way that a cottage food needs to be labeled. So that is one part that is very important is that the components of a food label are on that cottage food product and that can easily be found through the Ohio Department of Agriculture. One thing that you will notice in case you are out and about at farmer's markets, that if you see a product that says this product is home-produced, that means it's a cottage food. So that is part of what is required on a label of a cottage food. It can sound a little bit heartwarming like, "Oh, this is very sweet.
(20:34):This is a home-produced food." But truly it's meant to be a bit of a warning to folks to let them know that it has been made in a home. Now, the part it doesn't say on the label is this has been in a home without an inspection, but that's really the implied part. And especially for folks who would have allergies of any kind, food allergies, this would be something that they would want to know. And that would definitely be something that we would have on our label, but we're not a manufacturing location where they're following good manufacturing practices and true sanitary conditions and things like that of all the guidelines that a manufacturer would have to follow. So it could be possible for there to be some allergen contamination by no intention of the maker or the baker. But that's part of the reason for having that on the label is to let people know that this has been made in a home.
(21:34):And so it's kind of an eat at your own risk, especially if you have allergen concerns. Another thing to think about too is on the freezer beef or the meat side of things if you're going to be selling any retail cuts, like individual cuts from your freezer on your farm, that those cannot say not for retail sale on them. So it's kind of interesting the way our processors work. They can either be a custom processor or they can be a fully licensed inspected processor. And it's very possible for you to sell holes or halves or quarters from either of those types of processors and have your buyers pick up their meat directly from the processor or you could pick it up and deliver it to them. But if you are going to be selling individual roasts or chops or whatever out of the freezer from your farm, then you definitely need to make sure that it's from a fully inspected facility and that label will have that information on it.
(22:47):So those are a couple of the things that I think about the most from a labeling standpoint. Another just I guess on top of that is just to mention that marketing is always a great thing. You can utilize your label for marketing as the food scientist. I think that the food information, it has to be on there first. And then if you've got some room to add in an extra part about your story, then that's the kind of icing on the cake.
Libby Wixtead (23:19):Yeah. So going back to the freezer beef and labeling, whose responsibility is it, let's say you're going to the processor, is it the processor's responsibility or is it the person that is selling even if the whole half whatever or if they're individual pieces? Whose responsibility is it for the label?
Emily Marrison (23:43):So the label will be by the processor. It is possible to work with a processor to design your own label, your own farm label. It takes a little while to do that, but that would be something you would work with the processor and with Ohio Department of Agriculture in order to put that label together and get it all approved by ODA.
Libby Wixtead (24:08):Okay. Okay, perfect. So what are some of the most effective ways for beginners in the value-added industry to start marketing and selling their product? So
Emily Marrison (24:23):I'm not the marketer. That's not my specialty. However, just from my own observations over the years, I feel like a farmer's market is a great way to start. It's a very good way to get exposure to your community or to other nearby communities so that people become more familiar with your product. It's also possible just to sell from your home. And to your point about the Etsys and the other things, if you develop a strong social media presence and have just good word of mouth locally, then it's very possible to be able to sell products from your home and be your own marketer in that. So I see those as being two great ways. Another thing to consider is if you do have local restaurants around, depending on what kind of products you have, I think people can be intimidated by that, but really there are plenty of restaurants that are looking for local folks that they can depend on.
(25:34):The toughest part I think is that it's usually not as...
(25:41):I hesitate to use the word dependable, but what I mean by that is just if we're a small local producer, we may think we're going to have something by a certain date, but sometimes you just don't know until that happens. And so as long as you're working with someone who understands that aspect that you're not a major supplier, then I think that would be a really great place to start as well, whether it's more on the produce sides of things or it really could be something that they end up either selling in their storefront or using as an ingredient in their other products that they're making at that location.
Libby Wixtead (26:25):Yeah. And I think some of the restaurants too that are put, I've seen on some menus of, "Oh, this came from Farmer Brown's Farm." And that's really neat to get your name out there. And I know there's a local farmer who I didn't know his beef was being served at one of our local restaurants. And I think people want to support that more because of that local feel. Like you said, having that relationship with that person just really means a lot to the consumer.
Emily Marrison (26:56):Yeah. I think it's a win-win. Yeah, it's a win-win for the restaurant, for the producer as well. And then yeah, I think the consumer greatly appreciate that.
Libby Wixtead (27:06):Do you think for marketing that a website is necessary or a tool that can be utilized have that online platform?
Emily Marrison (27:17):Oh, that's such a great question. And this is where I would have to default to more of my marketing counterparts because I do feel like sometimes I'm turning into an old lady and I don't really know all of the newest and greatest things. But truly at least having some online way, whether that is that you have your own website or whether it's just there's some other kind of platform that you can connect to and be a part of. I think the online presence is definitely just a key component of modern-day marketing right now.
Libby Wixtead (27:55):Okay. What are some resources that OSU Extension offers to help producers navigate the process from their initial idea to distributing the products? I know you had mentioned the farm office is a good place to start. Are there any other resources that you guys would have?
Emily Marrison (28:15):Sure. So when you go to that farm office, and again, it's farmoffice.osu.edu, and you'll see so many different resources that are on that. If you go to the ag law section, it sounds maybe a little strange that it's under law, but it's because we know that people usually have questions about the regulations first. So it's under food law. But when you go there, we have several publications so you can read through those if that's the place that you want to start. We also have recorded webinars as well. So three years ago we did a series of webinars and those are all up there that you can watch at any time. And then we have a link to our online course and it does not begin until August. So it is in the same kind of timeframe as Ohio State classes, so from August to December, but it's not a class like it would be like a college class.
(29:16):It's totally at your own pace. So it is a do it at your own speed. Whenever you have time to do it, you can put as much effort and work into it. You can go back and watch the videos and read the materials as much as you want. It's called Food Business Central. And the reason that we've called it that is because we did find over the years that that was one of the toughest parts for people was figuring out where to start because there are so many diferent places that you could come into this journey. So we tried to make it a central place where we could talk about the regulations, but also talk about the marketing aspects, talk about the food safety, Concerns, and as you complete the course, you basically are just asked a few questions at the end of each module.
(30:07):When you get all the way through the modules, then here are all of the answers to the questions that you've put in, and then you've got your plan. It's not really a business plan per se, but it's your plan of attack of what you need to do next because maybe your next step is that you need to talk to an insurance agent or maybe your next step is that you need to call and find out something about regulations, but that helps you to see what are some of the next things that I need to do from a business standpoint or from a product standpoint.
Libby Wixtead (30:43):Yeah, that sounds like a great place to, if somebody has an idea of a great starting point, just to, they have this big audacious goal and get those small little stepping stones in place to steer them in the right direction before there's huge financial impacts or implications that they run into. So lastly here, where do you see the biggest opportunities for farmers in this space over the next few years?
Emily Marrison (31:21):So for this part, I kind of enjoyed thinking about where this might go. Penn State every year is really good about talking about trends and opportunities in food. And of course they don't have their 2027 done yet, but as they looked at some things in 2026, one of those was about nostalgia. And I think that is a place that I see within this value-added arena for sure. I'm seeing more and more of these just roadside stands that are popping up. And of course, I live very close to the heart of Amish country, so this is not brand new for me in any way, but I'm seeing more of these where someone is just, they don't really need a storefront at all. It's just this little kind of shack at the end of the driveway that people I think are really loving these days. I also think that as people are just even more conscious from a health standpoint, that they're just going to be looking for foods that they consider to be more whole and however they define that, but less processed things.
(32:52):Though we said that one of the things about value-added is that you've added a process to it, but in the sense that you have just turned it into the next step different from what I think we would all define as a more processed kind of food product. So I do think that that is going to just resonate with a lot of consumers and be an angle that a lot of value-added producers can take as well. So appealing to the nostalgia aspect, whether it really is real that people can remember or whether they just think it's a great idea and they wish they would've experienced it at some point. But then also this part about just a return to just more whole types of foods and a genuine realness. I don't know what the right words are to use, but I think that's just what a lot of people are really looking for.
(33:57):They want food that they feel like is real and is made by real people. And if they can see a real face, that helps it too.
Libby Wixtead (34:05):Yeah. They want that personal connection to food and I think they want their kids to experience that as well because I think it's also an experience. My generation loves that experience that goes along with life, I guess you could say. So being able to take the kids to the farm and, "Oh, hey, we're going to go to this farm and check out their store and get some ice cream and milk." And the kids have that connection and they enjoy that. So I completely understand that and that's exciting. I think that provides opportunity for more young farmers or farmers in general to have more products out there and more choices for our consumers and they have that choice. And that's what's important to me I think in agriculture is they have the choice.
Speaker 1 (35:02):Yes.
Libby Wixtead (35:04):Well, Emily, I want to thank you so much for sharing your insight and taking time to share your knowledge with us with our listeners and helping us navigate the value added piece to our industry. And we thank every one of you listening for taking time to listen to another one of our podcasts by AgCredit Set It, and we will talk to you guys next time.
Speaker 1 (35:34):Thank you for listening to AgCredit Said It. Be sure to subscribe in your favorite podcast app or join us through our website at agcredit.net so you'll never miss an episode.