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Marketing and Sales Channels

 

Key Points

  • There is significant market potential for elderberry – globally and locally.

  • Value-added elder products are manufactured at different scales across the supply chain: by on-farm value-added producers, herbalists, specialty food entrepreneurs, and nutraceutical corporations.

  • Both processors and retailers express strong interest in California-grown elderberries, and 67% of elder processors surveyed said they did not find enough supply to meet their needs.

  • Prices for elderberry offer substantial opportunity for profitability, but vary significantly across market channels.

In April 2020, UC SAREP hosted a webinar “Understanding Opportunities for Elderberry Sales” which featured buyers within specialty food and herbal industries discussing what they look for when sourcing elderberry and/or flowers.

Direct Market Channels

It is relatively uncommon for growers to sell fresh elderberries directly to consumers, due to rapid perishability and potential toxicity from cyanogenic glycoside in the berries. Chefs, bartenders, specialty food entrepreneurs, herbalists and other food processors are much more promising target customers for direct sales of elderberries and flowers. Typically, these buyers have greater flexibility than wholesale buyers in terms of volume, delivery timing and level of post-harvest processing. Some may prefer to receive the product fresh, others may be open to frozen and/or dried product, allowing growers to lengthen their sales window. Organic and sustainably-grown practices appear to be especially important to herbalists and home preservers. Alternatively, growers may wish to make their own value-added products such as jams and syrups to be sold directly to their customer base.

Resources for direct sales

Herb schools can be a resource for connecting with interested buyers in the form of graduates, current students or others in their networks:

Wholesale

Herbal wholesalers, specialty food entrepreneurs, natural food stores and nutraceuticals purchase elderberries and/or flowers to be resold to consumers or processed into end-products. This buyer segment is most interested in dried elderberries and/or elderflowers, though some processors desire or are able to accept frozen raw ingredients. Though there is interest in domestic and regional supply, this segment also has the greatest stringency around volume, pricing and food safety requirements. Among retailers surveyed by UC SAREP in 2019, consistency of supply and price were more important than organic certification. Growers wishing to do business with these types of buyers should make sure the buyers’ requirements and price points align with their own business needs. Cooperative marketing and aggregation among farmers can be an effective strategy to meet volume requirements of larger buyers.

Buyer perspective on selling into the wholesale herbal marketplace

Resources for selling wholesale & cooperative marketing

Profitability

Prices for elder products vary widely depending on the market channel, type of processing and quality attributes. In 2020, a West coast mid-scale herb wholesaler reported purchasing certified organic dried elderberry on the global market at $6/LB while a Northern California herb marketing cooperative paid local farmers $24.80/LB (80% of the listed retail price) for non-certified dried elderberry. The Midwest Elderberry Cooperative retails frozen organic berries for $4.75 - $5.50/LB plus shipping. The dry down ratio of fresh to dry berries is approximately 5 to 1 (Doty webinar presentation, 2020) which can make it advantageous to sell berries “wet” if buyers are willing.

UC SAREP estimated $1.39/LB labor cost for harvesting and destemming elderberries at $15/hr. The University of Vermont and the University of Missouri have each developed financial decision tools to help growers evaluate their return on investment for establishing elderberry. It is worth noting that these tools only capture financial, but not ecological, returns on planting elder.

Resources to assess profitability

Value-added products often capture a higher market price, but with greater associated costs. California-made elderberry syrups ranged in retail price from $8 - $24 per 8 fl oz. In order to achieve profitability, the product price must exceed the costs of harvesting, processing and marketing. Merrilee Olson, founder of Preserve Farm Kitchens, a specialty food co-packer in Northern California, estimates start-up costs can range from $3,000 to $25,000. Cottage Food Law allows farmers and food entrepreneurs to start small and test market demand for their products before scaling up.