Alstede Farms: Charge them and they will come

GO-MR-3-Alstede Farms 1by Bill Rose
“Charge them and they will come” was the provocative message delivered by Kurt Alstede, owner of Alstede Farms in Chester, NJ, to growers at the Mid-Atlantic Fruit and Vegetable Conference at Hershey, PA. Alstede Farms has about 300 acres of tree fruits, small fruits and vegetables, which they sell 100 percent retail at their farm market store, extensive PYO, and 1,300-member CSA.
Alstede is a first generation farmer who says he has learned a lot from others who have freely shared about their similar businesses. His simple message to help others in the industry is that you need to charge what you are worth. “If no one complains, you are not charging enough!” he says. “I think that for too long our industry has been afraid to really charge for the value that we provide consumers. So my goal today is to give you the confidence and perhaps some tools to charge, and if you’re already charging, to charge more.”
Reasons to Charge PYO Admission
A key issue for a business such as Alstede Farms is whether to charge admission for PYO. When Alstedes first started charging PYO admission, it definitely created some controversy among their customers. They got complaints like, “You actually expect me to pay to come onto your farm to pick your own? I’m doing the work for you.” And yet in the face of that, Alstede says that one of the best decisions he has made in 35 years of business is to charge admission for PYO.
Alstede says, “One of the reasons we charge admission is because we found that there were a lot of people who were coming to the farm solely for the purpose of eating. They had no intention of buying. They were going out there to have a strawberry feast and then leaving.”
He further notes that before he started charging admission, he was getting complaints from good customers about others who were flagrantly abusing the rules. He felt it was a disservice to the honest customers to allow the rule-breaking to continue. But if he charged admission, would people feel entitled to eat more out in the field, and just make the problem worse? Alstede says, “We found the opposite. Since we started charging admission, those bad apples are gone. There’s no question it has removed a lot of pilferage.”
Fine-Tuning PYO Admission
Charging PYO admission has had another unexpected marketing benefit for Alstede. Before they began charging admission, the majority of PYO customers would come on weekends, unless the weather was bad. Therefore, he was looking for ways to move PYO business to weekdays. In conjunction with this, he noticed that one of the key groups who complained about the admission fee was local moms with small children who were looking for something to do during the week. He says, “They were never a problem in the first place. So about two weeks into this, we sat down, had a little powwow and said, ‘All right, we know that these moms like to come out on weekdays. Let’s provide them with a venue that they can still be happy, and it will drive some business when we’re slower.’ Then we started free admission every Tuesday and Wednesday from 9 to 1.”
This arrangement has worked well. Tuesdays and Wednesdays used to be slow days, but now they are much busier. And of course, the customers on those days still get the free hayrides, even though the admission is free.
Another adjustment Alstede has made is to offer free PYO admission to CSA customers. That gives them an added bonus to join. He also includes free PYO admission with the farm’s daily and annual activity passes for their agri-tourism activities, such as a giant corn maze, pony rides and moon bounce.
One important item in successfully charging PYO admission is having a common place to go in and out of the farm. Alstede says, “We have one place for ticket admission; it works really nifty. There’s no way you’re getting in, and no way you’re getting out except for that common point.”
Picking containers are not addressed in the Alstede Farms admission fee. The farm sells PYO containers to customers for an additional nominal fee, although customers are free to bring their own containers. The one restriction is that bags are not allowed. One reason for this is that bags tend to damage the produce. Also, the farm staff put primary containers into farm logo bags at checkout, so it is easy to see what has been paid for. Alstede says some people ask why they don’t include free PYO containers with the admission fee. The farm used to provide free containers, but people would waste them or leave them lay in the fields. Alstede says it is amazing how much more careful people are with the containers, simply because they have to pay 10 cents each for them.
Alstede does give one significant warning about charging farm admission fees: “When you start charging, the expectation level goes up. You need to be prepared to back up that admission charge with service, with product, and with an experience that’s commensurate with what you’re charging. The farm has to be clean, has to be neat. You can’t charge to bring them to a dump.” A key ingredient of this is having a steady supply of PYO crops for people to pick. People get unhappy if they have paid admission and picking is poor. Alstede notes that on a few occasions he has waived admission fees on days when he felt the picking was a little light.
Don’t Fear Charging What You are Worth
There are many fears that agricultural business owners have about charging what their products and services are worth. He explains one reason farmers are afraid to charge appropriately is because as a group, they tend to be conservative and thrifty, and to undervalue their products and contributions. He says, “I think that too often we set prices based on what we want to spend or what we think something should cost rather than what consumers are really willing to pay.”
He cites bottled water as an example of this. He says, “I vowed years ago I would never buy a bottle of water.” This was because it was so much cheaper to go to the drinking fountain or get water some other way. But he has learned over the years that sometimes, especially at places like theme parks, sports events, and event agritainment facilities, it’s really nice to be able to buy bottled water for the children or spouse, even if it does seem overpriced. At the moment, it is worth it. The same is true of many retail agricultural products and services. In the right context, they are worth a lot more than you might first guess.
Another fear of farmers in charging what they are worth is irate customers. Alstede says customer complaints are evidence of an entitlement mentality. People want what the farmer has, but for some reason they think they’re entitled to get it for free. People don’t realize how expensive it is to run a farming operation.
Some retail farm businesses also fear that if they charge more, they may lose business to a competitor who is charging less. Alstede encourages farmers to think of the opposite perspective. He says, “I encourage you to be a price setter, because people will pay, and it won’t take too long for everybody else in the industry to realize, ‘Well, if this guy is getting some money for it, and it’s working there, why won’t it work for me?”
The important thing to remember, says Alstede, is that retail farm businesses are selling an experience, not just a product. He says, “It’s hard for us to put a value on the experience because we’re living it everyday. We have no idea what it’s like as a family to create a fall memory of going out on a weekend to the farm and getting a pumpkin and getting apples and going on a hayride and playing with the animals, and then going out to dinner. We’re the ones doing that for these people. It’s very hard for us to understand just how much they’re willing to pay for this.”

2014-05-02T10:39:29+00:00May 2, 2014|Grower East|0 Comments

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