You can direct market grain, too — but it’s more complicated

Mark Gibeau sells flour to bakers and chefs while selling direct helped Steven Snider get started

Mark Gibeau credits the success of his organic heritage grain business to the connections he’s built with bakers and chefs.
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Mark Gibeau wouldn’t be a farmer today if he couldn’t direct market his grains.

“Having small acres in the big-boy system doesn’t work,” said the owner of Heritage Harvest near Strathmore. “We had to find something different right from the get-go.”

Gibeau, who farms with his wife, began growing certified organic heritage grains on his 200-acre farm in 2007 when he realized there was an underserved niche market for Red Fife and Marquis wheats and its close relative, spelt. After connecting with local speciality bakeries and restaurants, he started milling flour and selling it directly to bakers and chefs.

Even in those early days, his philosophy was to stay small, sell local, and add value wherever he can.

“I don’t sell grain — I sell flour,” said Gibeau. “We try to go as far down the value chain as we can.”

As the demand for local organic products has grown, so too has Gibeau’s business as he works to supply restaurants and bakeries in Calgary and Edmonton.

“These bakeries have developed their product line to cater to the consumer market that wants organic products,” he said.

Part of the reason for Heritage Harvest’s growth is an unrelenting focus on quality and consistency.

“The bakeries I deal with all have the same complaint — the inconsistency in products that they get from the rest of the marketplace,” he said. “When they buy a pallet of flour from somebody, they’ll get six bags of good grade and then the seventh and eighth have gone all to hell.”

So when Gibeau is milling his grain, he’ll get in touch with his customers to let them know if the flour changes even a little. That level of customer service has been essential to his success.

“We don’t really advertise much,” he said. “All of our new customers have all come from within the industry, so good relationships are pivotal.”

That’s part of the reason Steven Snider began direct marketing his own organic grains.

“We enjoy connecting with consumers, and consumers enjoy connecting with us,” said the owner of Red Hen Mill near Edberg. “They like to see where their food is produced. It puts a real face on the product.”

Snider, who has been growing organic grains on his 2,400-acre farm for the past three decades, did a lot of market development with consumers and processors in the early days of his business, when organic production was a fledgling industry.

Organic grain grower Steven Snider has scaled back his direct-marketing businesses because of the time costs. photo: Supplied

“It heightened awareness of the organic industry to the consumer,” said Snider. “We were able to provide valuable information about myths and half-truths about food production.

“It gave them a chance to see the hands-on side and get a better perspective on the time it takes to do what we do.”

But as the organic industry has grown and changed, Snider has largely shifted his business away from direct marketing to consumers. Some customers still come to his farm to buy milling grains, but in many ways, things like social media and Open Farm Days have given farmers the customer connection that they want.

“We had to be in those markets in those early days, but now we’re more mainstream. The volume is there for retail,” he said.

“I couldn’t realistically sell everything I produce direct to consumers unless I went to an internet marketing system.”

As a result, Snider has scaled back his direct-marketing business — not because he didn’t enjoy it, but because of the work that comes with it.

“It’s always about how much time you have,” he said. “The logistics of someone coming out to pick up a bag of flour or a bag of wheat can cost you more in time than what the product is worth.

“It’s great having a relationship with the consumer, but there is a pitfall in terms of time cost.”

Even the price premium that comes with direct marketing isn’t typically enough to offset that, he added.

“There’s always a higher margin of profit with direct-to-consumer sales, but there’s also a time cost and risk that way,” said Snider. “When we do the math, we think, ‘Oh my goodness, if we could sell our whole crop at that inflated price level, we’d make basically double or triple what we’d make on the bulk market.’

“There’s a huge opportunity there. But you need to make sure you know what it’s going to cost you in time.”

That’s also why Snider sells whole milling wheat rather than flour.

“I’ve never commercialized that because it’s such a competitive industry. There are lots of people milling flour.”

However, for a small producer like Gibeau, value adding his grain and developing his own local niche market has allowed him to stay in the game as the farms around him have grown in size and production.

“If we couldn’t value add our product, there wouldn’t be enough money to buy the diesel fuel,” he said. “We want to try and value add it so that we get the maximum return per acre.”

That’s the only way he could stay farming in an increasingly competitive industry.

“I could sell everything I produce into the traditional grain market. For Red Fife wheat, there’s just not enough around,” said Gibeau.

“But I choose not to. We’re not trying to compete with the big guys.”

About the author

Reporter

Jennifer Blair

Jennifer Blair is a Red Deer-based reporter with a post-secondary education in professional writing and nearly 10 years of experience in corporate communications, policy development, and journalism. She's spent half of her career telling stories about an industry she loves for an audience she admires--the farmers who work every day to build a better agriculture industry in Alberta.

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