You will need to make an estimate of the type and number of customers who might buy your products.
The vast majority of the table birds that are sold in supermarkets are produced by a handful of very large producers whose economies of scale and tightly controlled processes allow them to supply birds that can be sold at the retail level at very competitive prices. Outside of these large organisations there are smaller producers that target more niche markets, such as organic.
Similarly, intensive egg producers that house their birds in enriched cages operate on fairly slim profit margins.
Depending on how your own business operates, you may have a mix of trade and retail sales.
It is likely that a large proportion of your sales will be trade sales. Depending on how your business is going to operate, your trade customers may include:
- supermarkets and other large retailers
- egg packing stations
- local retailers
- local restaurants and hotels
- other poultry enterprises (sales of chicks from a breeding enterprise)
Try to find out whether you will find a market for your produce among these customers and whether the price they're prepared to pay will leave you enough profit. To do this you could:
- contact egg packing stations, supermarkets, wholesalers and processors to find out what price they will pay you for your eggs and/or poultry meat and what entering into a contract to supply them would entail. You can get average packer-to-producer and other farmgate prices from Defra statistical publications on the Gov.uk website. There's also helpful gross margin information available in publications like the John Nix 'Farm Management Pocketbook'
- make a list of local retailers and catering establishments that you think may take your produce and approach them to see if they would be interested. Don't forget that if they are already being supplied you will have to give them a good reason to change. This might be better quality, lower prices, more regular deliveries or a better service
- contact other poultry enterprises and find out if they would be interested in having you supply them with chicks, if you plan to start a breeding enterprise
Selling to the public
If you plan to sell produce direct to members of the public at the 'farm gate' or in other ways, try to make a realistic estimate of the number of people that will buy from you in this way. Factors that may increase the number of people that will buy direct from you are:
- if there is holiday accommodation such as a camping or caravan site nearby. Holiday makers are often keen to buy fresh produce - and you may find that they are prepared to pay higher prices
- if your local area is not well served with shops
- if there is something that differentiates your produce from that of your competitors. For example, you may be the only organic poultry farmer in your area
- if you take a regular stall at one or more farmers' markets
It is likely that farm gate sales will not represent a particularly large percentage of your overall sales.
Find out what people want
If you are planning to sell a large proportion of your produce through local retailers and catering outlets, you could consider carrying out a survey of those businesses to identify the sector of the market that you should aim for. You may find from talking to prospective customers that, for example, there is unmet demand for organic and free range eggs and poultry meat in your area. Taking the time to do this type of research may ensure that you have a market for your produce when you start your enterprise.
Use the Record sheets to help you with your market research.