7.3 Pricing Our Products

When coming up with a price we juggled three ambitions: 

1. Ensuring that our farmers got a return that incentivised change and rewarded their efforts

2. That our costs were covered and we made a small surplus

3. That the price offered to customers worked for them

In the short time that we were selling our products (June 2017 - November 2018) we were not able to reach these ambitions, but it felt important to set the intention and bring this into our pricing decision making each time.  

We received this valuable advice from Josiah at Hodmedods;

“I know I don't need to tell you that the cost covering and surplus generation is absolutely critical, but I think it's worth being explicit - don't be afraid to value your time, your efforts and make sure you recoup your costs; without you facilitating the connection between farm and customer none of this positive change, this good stuff, can happen. In some way, shape or form, Grown in Totnes needs to be there in 5, 10 and 15 years - don't be embarrassed about doing what it takes to make that happen.”

There was a lot of data to gather to provide the information needed to come up with a price, though as mentioned, pricing our products was something of an art. Below you can see our Monthly Projected Budget Spreadsheet and for comparison the Actual Expenditure for 2017/18.

Monthly Projected Budget Spreadsheet - 2017/18



Expenditure Record 2017/18

Our pricing methodology can be seen here. We gathered as much information as possible to form these figures and then had to juggle them to come up with a price that was realistic. Note the calculations are carried through from figures in each of the sheets, we have just shown the two sheets that are likely to be of most relevance to you. Much of this is very specific to Grown in Totnes but you may find some of the information useful:

• Sheet 1 - Method - goes through the methodology that we used

• Sheet 2 - details price comparisons researched from other brands of wheat flour

Where possible, i.e. where the price that we came up with was within the price range customers and retailers would expect, we charged a processing cost; a percentage of the total cost that we added on per process. White flour would incur the highest cost because of the number of processes it went through: polishing, tempering, milling, fine sieving (invariably 3-4 times to extract the maximum amount of flour from the bran). In comparison, wholemeal flour went through just 3 processes: polishing, milling and 1 coarse sieving. The least amount of processing went into our wholegrains, which were just polished. It was interesting to see how this pricing structure would result in very different prices to conventionally sold grain products. White flour is often cheaper than wholemeal and wholegrains are normally more expensive than flour. Conventional pricing works around efficiencies of scale; if a product is widely used it is generally cheaper. Pea flour is a good example. Dried peas are generally cheap, however when sold as a protein or pea flour this is seen as a more specialist item and the prices are considerably higher.  

You can see details of our packaging costs here.

As is common practice we also reduced our price for people buying in bulk sacks. Bulk was a minimum of 10kg and we decided not to have a standard size bulk bag, so that we could be flexible to our customer’s needs.

Below is an example of our Spring 2018 price list that we sent out to our customers:

Here is a blank version of our Expenses Record for you to adapt for your individual needs

In the early, learning years of the project we incurred considerable extra costs, the majority of which we had reduced by the final year of the project and would not expect to incur again in future years. These extra costs were principally as a result of:

• Our inexperience and in some cases the farmer’s too, in e.g drying and cleaning crops

• Lack of equipment, e.g drying equipment

• Inappropriate storage 

• Inefficiencies around the storage and haulage of crops between where they were grown and the processing unit