Smart Solutions

Farmers Market and eShop

Small rural producers joining forces to sell through a shared farmers market and online shop.

Implemented inSouth Estonia

Country : Estonia

What’s the solution?

The solution is to bring small rural producers together to create a shared point of sale through the creation of a daily operational Farmers Market. The physical Farmers Markets are often best located within cities – for example within an existing shopping centre - where a larger number of potential clients are located.

The Farmers Market overcomes many of the difficulties that small rural producers have in terms of accessing markets (e.g. obstacles to supplying supermarkets, lack of visibility, lack of physical premises for direct sale, remote rural locations etc) by creating a shared point of sale and shared marketing.

The well-established Farmers Market solution can be brought increasingly into the digital age through the creation of an eShop regrouping the same producers involved in the physical markets. This not only provides a convenient way for local people to continue to access the market outside of the normal opening hours, but offers potential access to consumers from a much wider geographical area. This increases the business development and job creation benefits that the joint market offers to producers in the region – including facilitating the entry of new entrants and young people into farming.

A regional farmers market bringing together many rural producers is typically best done through the creation of a shared body – association of the producers - to run the market. The market thus has its own employees and professional team to develop the activities of the market.

The Farmers Market and eShop aim to focus on the sale of produce, including through marketing and awareness raising. This enables small producers to focus on what they are best at: enhancing and expanding their production, creating new products and innovation – instead of having to dedicate so much of their time and energy into the selling and marketing phase (which is often not where their motivation or skills principally lie).

What makes it smart?

The solution is smart because it:

  • provides an innovative business model in the field of local products sale, contributing to the creation of new jobs for local people
  • is based on maximising the economic potential of local resources and assets, creating added value to local products, new local products
  • enables new and easy market access for small producers - providing a ‘seed bed’ for new entrants and innovating producers to test the marketable of their products
  • builds a network of producers and enhancing possibilities to organise joint logistics and other activities - including continuous networking and training opportunities
  • provides for joint marketing and branding, putting focus on quality of products
  • harnesses the additional potential of new technologies in providing an eShop which enables product sale to consumers all across Estonia, significantly expanding the potential market for even small local producers and creating further economic opportunities in the region.

How is the solution implemented?

  • Build a network of local producers
  • Develop and agree a financing model and involvement plan for relevant partners
  • Identify and gather seed funding – from participating business and local development agencies, regional funding etc.
  • Find a suitable location for a physical Farmers Market where one does not already exist
  • Establish a formal organisation with centrally hired employees to manage the Farmers Market
  • Organise marketing and networking activities
  • Open the market
  • Explore opportunities to extent the frequency of opening, size or number of locations.
  • Once established physically, develop an online shop to widen the potential market

In what local context has it been applied?

The network of Farmers Market producers covers the area of South Estonia region with 350 000 inhabitants. Producers come from small villages with populations starting from a few hundred inhabitants. The main customers come from the biggest cities of Estonia – Tartu (100 000 inhabitants), Pärnu (40 000) and Tallinn (430 000).

Small producers faced significant difficulties in getting access to good-sized markets.  In particular, they faced tremendous obstacles to selling local products in supermarkets due to the difficult conditions, large requirements of stock, supermarket margins/prices etc. Within the region, there were basically only local fairs where local products were sold by small and artisanal producers.

Who was behind the implementation?

  • Six small producers and five Local Action Groups (LAGs) in the south east Estonia region were the driving force behind the creation of the Farmers Market – they established an NGO together.
  • The Lõunakeskus shopping centre was a key partner, providing some of the initial equipment and furniture for the first physical market set up within the centre.
  • The eShop was the initiative of the producers, after having taken over sole responsibility for management of the farmers market.

What was the local journey?

  • A phase of local meetings of the initiating group (producers and LAGs) lasted about half year at the beginning of 2010. In this time, they developed a start-up model – preliminary business plan and involvement plan.
  • The engaged businesses and LAGs agreed to establish a new joint NGO and pool some money 50:50 between them to create seed funding of about 15,000 EUR to get the market started. This was to cover salaries for employees, some equipment and rental fees for store space, etc. They also developed a marketing plan.
  • The Farmers Market was created in August 2010 in the biggest shopping centre in South Estonia (Lõunakeskus). Initially it had 20 producers selling at the market.
  • In 2012, there was a reorganisation of the Farmers Market and the ownership was handed over completely to the producers who established a new joint commercial association for this purpose. In other words, the initial set-up phase was completed and the producers could now run the market independently.
  • This association then set about gradually expanding operations, opening four new markets in different locations in Estonia during the period 2013-2020.
  • As a next step in the smart development of the initiative, in 2020 – and in response to the challenges posed by the Covid pandemic - a Farmers Market eShop was opened. This online shop provides local producers with access to consumers across the entire country. Deliveries are organised through connected service providers: delivery by Bolt Food, Wolt and Tellitoit platforms.
  • Networking through the joint association has also allowed for the organisation of some joint activities for the small producers, including coordinated logistical arrangements, shared training, workshops and other events that they would not be able to organise on their own.

What have been the main outputs & results?

  • The initial Farmers Market became fully financially independent within two months. By 2021, the Farmers Market had five operational markets in different cities of Estonia (3 in Tartu, 1 in Pärnu and 1 in Tallinn) and its own bakeries.
  • Having started in 2010 with 20 producers, there are now products sold at the different physical Farmers Markets and online eShop from around 350 producers.
  • In 2020 the turnover of Farmers Market (5 markets in different locations) was 1.4 million € (over 100,000€ per month).
  • The eShop was a crucial tool for helping producers survive economically during the most challenging phases of the Covid pandemic, when the physical market was not able to function. During lockdowns, a lot of orders went through the online shop, but when the physical market is open the online shop accounts for about 15% of total turnover.
  • The Farmers Market has provided small producers with access to a larger market, increasing their income and supporting gradual growth and job creation in these businesses.
  • The Farmers Market itself now employs 25 people – independently of those employed by the individual participating producers.
  • The Farmers Market and online shop have allowed producers to focus on producing rather than marketing or worrying about how and where to sell their produce, since the market takes care of joint marketing and branding activities. This has contributed to the expansion and job creation potential of these small businesses.
  • Beyond the opportunities for the existing small businesses from 2010, the market has enabled the total number of local producers to also increase in the whole South Estonian region – including young and new entrants farmers. This has occurred as people have seen the possibilities of starting up a new business and selling through the medium of the Farmers Market – the marketing and access to market concerns are no longer an obstacle to new business creation. The Farmers Market has become a crucial place for newly started food businesses to have a first access to market.
  • The number of consumers has increased remarkably. The number of clients per month is approximately 16,000 (at the beginning it was around 2,000).
  • The markets also seem to have contributed to an increased awareness and appreciation of local people for locally produced food – increasing the overall market size.

What does it bring the village/community?

  • Farmers Market will continue to support small local producers creating economic benefits and job creation potential.
  • The market will continue to support the creation of new business, including new entrants and young people into farming since they (and banks) can see the access to market provided by the market for even new and unknown businesses.
  • Furthermore, as products from South Estonia become better known thanks to the Farmers Market and eShop – which provides access to consumers all over the country - the size of the whole regional market should increase, providing further economic benefits for all and related job creation opportunities.
  • In addition, the networking of the producers through the joint association will continue to provide opportunities for skills and capacity development through the organisation of joint training, workshops and other activities.

What’s needed

Financial resources

Main types of cost:
Financial needs:

Set-up costs: 25,500€

• 15,000€ -initial seed funding to get market up and running (operational).

• 10,500€ - initial investment required for the e-shop

Since its creation, the market has also benefitted from two additional ‘development support’ grants: in 2017-2020 support in amount 200 000€ and 2021-2025 support in amount 190 000€, with about 50% co-financing. These have been supported under the short supply chain measure of the Estonian National Rural Development Plan, which covered investments into equipment and facilities as well as to cover some part of the rent of market premises.

Ongoing costs: 450,000€

After the first two months’ of operation, the market has become entirely self-financing.

The total annual running cost of Farmers Market is about 450,000€, covering costs including rental fees for the physical location, utilities, salaries with taxes and transport. In 2020, the turnover of Farmers Market (5 markets in different locations) was 1.4 million € (including sales of goods).

Funding received:
Producers (business sector)7,500 €Opening Farmers Market (rent, salaries, some equipment)
LAGs7,500 €Opening Farmers Market (rent, salaries, some equipment), first marketing activities

Human resources

• Full time manager

• 4 sellers (employed by Farmers Market) at the beginning.

Physical resources

• Shopping area – we chose the area which is close to consumers – big supermarkets

• Equipment, furniture, refrigerators

What to do…

  • Consider urban locations for a centralised Farmers Market for improved access to consumers
  • Work with mission – know your producers and their products
  • Focus the Farmers market’s efforts on product sale, which can best complement the existing skills of the producers – they can take care of product development.
  • Consider a partnership between producers and LEADER Local Action Groups (LAGs) to get the Farmers Market started
  • Once established, aim to take your Farmers Market online to widen the access to consumers across a broader geographical range

and not to do

  • Avoid a very large decision-making body, in business decisions must be often quick
  • Avoid expanding when you don’t know the market or customers’ behaviour. In different regions it can vary.
  • Don’t move the market online before you have enough capacity through the range of engaged producers.

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