The right product at the right price with extraordinary service added on top is what every customer wants. In competitive markets, this can be a complicated combination to deliver successfully, but agricultural economy 101 tells us that the best way to protect and build your profit margins is to find new and innovative ways to package, market, and sell pre-existing commodities.
In agriculture, value-adding entails changing a raw agricultural product into something new through packaging, processing, drying, cooling, extracting, or through any other type of process that differentiates the product from the original basic or raw commodity. A few examples of value added agricultural products include pre-chopped garlic, bagged salad mixes, woven bread, lavender soaps, and sausage links.
Adding value to agricultural products is a surefire way to inflate profits because of the higher returns that come with these time-saving products. These new products are filling previously absent but not high-demand product niches. This is the true lynchpin to success in value added agriculture — after all, niche markets are the places where smaller, even independent producers can be most successful in creating or adding value and establishing a profitable business.
A study conducted by the Southern Sustainable Agriculture Working Group identified 8 major keys to success when pursuing a value-added business. These verticals include:
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starting small and growing naturally
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making decisions based on good records
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creating a high-quality product
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following demand-driven production
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getting the whole family or partners involved
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keeping informed
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planning for the future
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continuing evaluation
Experts recommend that you consider all 8 suggestions when you design your product and business plan. Value-added processing and handling of crop and livestock products is a major force within the agricultural economy. It acts as an indicator of how the country’s agriculture industry shifts to meet growing global competition. According to a report just released by the Oregon State University Extension Service, adding value increases yearly profits by $4.1 billion on average to crop and livestock sales (also known as farmgate sales) and generates another $2.1 billion in first-handler economic activity, which is a 53 percent increase over the value of farmgate sales alone.
The numbers don’t lie, but if you’re struggling to finds ways you can cash in on these methods, the right additive and ingredient distributor will be able to help. An ingredient supplier like Cambrian can connect you with innovative ingredients for your specific company in your specific industry. Global as well as local connections allow distributors to be on the forefront of trends in value-added supply chain distribution in meat, dairy, bakery, beverage and other industries. Cambrian’s business teams travel the world and connect businesses with global supply solutions allowing them to profit from innovation before it is embraced worldwide. To see how they’ve helped other companies in your industry in the past, check out Cambrian.com and explore their areas of expertise.
If you want to deliver innovative solutions to your consumers, the team at Cambrian offers proven chemistry initiatives and food enhancements. Their combined expertise, experience, and supply outreach can help you create the perfect value-added products for your company, so you can see the benefit of these strategies to your bottom line. Speak with a technical representative today to start the ball rolling.
