Pricing In A Jam

07Jun08

When Wanda was involved in the Crafters Hand store this past winter she was often criticized for charging too much for her saskatoon jams.  She was charging $5 per jar that her “competitors” in the same store were charging $3 for.  Wanda’s jams had a higher concentration of fruit, but other than that there was little difference to defend the pricing. There is a good article in a recent issue of the Farmers Market Association of Manitoba Co-op Inc. Newsletter <FMAM Newsletter Volume 2 Issue 1 – Released on January 29, 2008 > by Tamela Friesen that gives Wanda a good justification for her saskatoon jam pricing.

The article focuses on the fact that farmers’ market product costs matter – but that they are often not tracked enough, nor considered adequately in pricing. The article illustrates this using an example of homemade preserves and proves “that if you do not cost it, you likely spend more than you earn”.

According to the article homemade preserves involve the following costs: 

         “The least expensive jars were $0.66 each, including taxes.

         Pectin cost about $0.25 per jar.

         Sugar averaged about $0.22 per jar.

         Ingredients, if we picked them, were the cost of labour and any u-pick fees. In the case of saskatoon jam, a u-pick four-litre pail was $11.00, sans labour. That works out to nearly $1.00 per jar.

          Our best picker picked a pail in half an hour. If we pay ourselves $10/hour, that’s $5 per bucket … $0.50/jar for picking.

 Have you been keeping track? So far, the cost of producing our jar of jam registers at $2.63/jar. What’s still missing from the cost?

         Labour for cleaning and sorting berries and for cooking and processing the jam,

         electricity for the stove, labels, transportation to the market,

          labour at the market, & marketing materials.

         Need to use your air conditioning because your canning heated up the house too much? That counts too! 

 Commonly in restaurants, managers shoot to spend about 33% of costs on ingredients and packaging and 33% of costs on labour. The remainder covers things like equipment, hydro, marketing, and bank accounts — and, with any luck, profits. “  

The article indicates that to have a chance to breakeven on a jar of saskatoon jam, you would have to charge $7.89 per jar (or perhaps only $4.89 per jar if you have your own berries). Kind of makes Wanda’s $5 per jar seem very reasonable.Dragonfly Meadow Jam Display
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