Markets for Medicinal Herbs

Margaret Bloomquist, NCSU Dept. Of Horticultural SciencesCharles Leonard, Gentle Harmony Farm

ASAP Business of Farming Conference 2017

Domestic MarketHow big are Medicinal Herbs?

Herbal Supplement Growth• 2015 was 12th consecutive

year of Herbal Supplement growth based on U.S. Consumer Spending reports.

• $480 Million more than 2014.

Herbalgram. 2016.

Herbal Supplement Marketing Channels• “Mass-market =

“mainstream channel”• Natural and Health food

=“natural channel”• Direct Sales

Table: From HerbalGram, reprinted from Nutrition Business Journal

The Medicinal Herb Industry• Diverse Markets• Not like other Commodities• Where to Start?• What do buyers Want?

Diverse Markets• Herbs can be marketed many ways and incorporated

into many value-added products• Wholesale, raw material sales• Many other market opportunities

• More appropriate for small-scale producers.• Small volume, higher value.• Fewer, if any, “middle men”.

• For most people, the hardest part of growing medicinal herbs is selling them.

Not like other Commodities• Diversity in plants and end products• Annuals/Perennials• Forest or field• Raw material, value added products

• History of industry is strong, yet elusive

Local MarketWhere to Start

Local Market Opportunities• Herbalists• Herb Schools• Natural Health Care

Practitioners• Small Herb Product

Manufacturers• Cottage Businesses Making

Products

Photos: Nature’s Pharmacy, Herban Farmacy

Local Market Opportunities• Agritourism• Tail-Gate Markets• Nursery Plant Sales• Festivals• Incorporate into your CSA• Internet Sales• Make Your Own Value

Added Products and sell Direct to Consumers

Photos: Mountain Farm, Medicinal Herb Farm, NC HerbCrew

What do Local Buyers Want?• Quality over Quantity• Good relationships with growers• Attention to production methods• Local, Organic• Properly Handled• Documentation

WNC History and Opportunity• Native Americans used many native plants for healing and ceremonies.• Some of this knowledge was shared with the first European settlers.• Historically, some of the most commonly used herbs in western N.C. included:

ginseng, goldenseal, black cohosh, bloodroot, sassafras, slippery elm, witch hazel. • Native Herbs Still Play an Important Role in the Culture and Economy of North

Carolina.• Many of the medicinal herb products on the market are made from native

North American botanicals.

WNC History and Opportunity• Development of the N.C. Medicinal Herb Industry• Build on our reputation as a source for a wide diversity of high quality

plants with exceptional potency.• Growers are ready and willing to grow herbs.• Area is well suited to development and expansion of agricultural and

processing sides of the industry.• What’s next?• Continue research and education on post harvest handling and marketing.

Case Study Gentle Harmony Farms

Gentle Harmony Farm• Gentle Harmony Farm produces only medicinal herbs in the Yadkin

River valley, not far from Winston-Salem.• Gentle Harmony Farm has been USDA certified for production of

100% organic herbs since 2012.

Gentle Harmony Farm• 3 1/8th Acres — 2 acres for cultivation• 2 leased acres — organic cover crops

Gentle Harmony Farm• Kubota B3200 w/turning plow, disc harrow,

40” tiller• BCS 853 w/rotary plow, power harrow,

flail mower, tool bar• Jang Precision Seeder• Hatfield transplanters• Hand tools include hori, garden forks, • Italian Grass Knives

Gentle Harmony Farm• Labor – All contract workers or volunteers• Paid hours – Averages 6.5 per day peak season

Gentle Harmony FarmInitial Costs• Equipment in first 2 years $14,200• Expenses in first year of organic operation $10,200

Gentle Harmony Farm• Year One Marketing

NetworkingWeb Site Development and SalesLocal and Regional PresentationsEmail and Letters to Herbalists

• Year One Sales $2,340

Gentle Harmony Farm• Year 2-3 Marketing – Referrals due to quality of product

make up the greatest part of ongoing marketing• Motto – High Quality Organic Medicinal Herbs Through

Carefully Applied Hand Cultivation and Processing• Year 2-3 Sales $12,200 – $13,000

Gentle Harmony Farm• Profitability is projected for 2018

• Thoughts on transitions and choices• Diversity – Planting & Harvest schedule, Selection to Offer Buyers • Focus – Organic, Artisanal, Premium Product, Personal Contact with Buyers• Relevance of Consumers and Marketing to choices

Since Pam is an herbalist herself, we only sell what she would accept for use in her own compounds• Reality of Growing Conditions to choices

Full Sun fields, clay-loam soil,

Gentle Harmony Farm• Business Tools for the Trade• Business Plan –

Self FinancedIncome Unnecessary — but nice when it happens Certified Organic Required for Product ViabilityGrow the Value of the BusinessGood Stewardship of the Land Service to the Community Small Scale with Attention to QualityGrow Smarter Not Harder

Gentle Harmony Farm• Business Tools for the Trade• Traceability

From Seed to Invoice

Gentle Harmony Farm• Business Tools for the Trade• Paper and Electronic

Questions?Thank you very much!

Resources – For More Info• Jeanine Davis’s Website and

Blog, NCSU WWW.NCHerbs.org• Sustainable Herbs Projecthttp://www.numenfilm.com/blog/• Appalachian Beginning Forest

Farmers Coalitionhttp://www.appalachianforestfarmers.org/