To Charge Or Not To Charge At Farm Markets
There seems to be a delicate balance between what customers will pay for and what they wonâ€™t, especially concerning â€œextrasâ€� like value-added entertainment features at farm markets including hayrides, straw piles, and corn mazes. In many cases, these features attract customers to a farm market and keep them there longer than the average visit to come in and buy apples. But at what point do growers have to seek some return for all of the investment it takes to keep these attractions going? David Patterson of Patterson Fruit Farm in Chesterland, OH, says when it becomes too expensive to maintain and you start losing money, itâ€™s time to start charging admission fees.
When the festival began, Patterson charged $2 per person and as its features grew and expanded, admission increased to $5 per person on weekends and $3 per person on weekdays, with children under age 2 admitted free. Patterson says while most customers pay admission with no complaints, there are still those who donâ€™t understand why parents or grandparents areÂ charged.
â€œItâ€™s a family fun fest and we want to encourage the family playing together, not just dropping your kids off and letting them play,â€� Patterson says. â€œWe want the moms and dads right there in the straw with the kids.â€�
Patterson Fruit Farm operates a market at the entrance to its Family Fun Fest, where visitors can buy apples, gifts, and other agricultural products. The market and festival are on the same site as the farmâ€™s PYO orchard as well. Patterson says the operation does charge more for its apples and other products because its operating costs are higher than an orchard that doesnâ€™t offer activities; however, asking customers to pay these prices also allows the farm to keep admission rates low in comparison to other family events in the area.
â€œI think people perceive a larger value with all the extra things to do,â€� Patterson says. â€œIf we didnâ€™t offer the attractions and have that extra revenue, I think we would have a hard time being where weâ€™re at today because the cost of land in this area and the cost of business is so expensive.â€�
The Family Fun Fest is the most profitable entertainment offering Patterson Fruit Farm operates, Patterson says, and it continues to grow each year through word-of-mouth and even second-generation families making the festival an annual tradition. The operation measures its costs and profits from Family Fun Fest visitors by how much beyond the festival rate they spend, and track it on a daily and weekly basis.
Fewer Customers, Better Profits
In a July e-mail to American Fruit Grower, Ross Nelson of Nelson Apple Farm in Webster, MN, said in 2005 his operation began charging customers $4 per person over age 6 and $2.50 per person for age 6 and under. The admission fee came after the orchard experienced a decline in profitability when families or child care groups would spend two hours or more at the orchard on wagon rides, at the petting zoo or the corn stalk crawl, without purchasing anything.
After the orchard began charging fees, some customers did complain, Nelson said, but most of the customers were very accepting of the admission fee and understood why the change was made. By the 2006 season, there was much less resistance, he said, and positive aspects included a less congested parking lot, less frequent wagon rides with better service, and, most importantly, increased profits.
â€œThose families that were at the orchard to ride the wagon, see the petting zoo, walk through our 7-acre corn maze, and purchase little were irate (about the admission fee),â€� Nelson said. â€œWe got rid of a group of people who were not paying their way and made it better for those who were here to have a good time and let us make a profit.â€�
The orchardâ€™s plan for this fall was to again charge the $4/$2.50 fee and improve check-out lines to better accommodate the Fun Fee charge, said Nelson. By fall 2008, he plans to increase the admission price to return to the level of profit Nelson Apple Farm experienced in the past.
Nelson added that other orchards around his local area near the suburbs of Minneapolis/St. Paul were experiencing the same problems and said if all apple growers charge for entertainment services, it will lead to profits for all.
â€œUnfortunately, most orchard owners are not good business people and donâ€™t really know if they are making money or not,â€� Nelson wrote. â€œI am the treasurer for the Minnesota Apple Growers Association, and we will continue to have seminar topics at the annual conference on such topics as what growers can do to increase their profitability.â€�