Dec 15, 2025

Identifying underperforming products in your farm market

Running a thriving farm market today requires more than offering fresh produce. It demands strategic decision-making based on data. 

Identifying underperforming products is one of the most overlooked yet critical aspects of profitability. These products tie up capital, occupy valuable shelf space and erode margins if left unchecked. Here’s how to spot them and take action.

Underperforming products don’t just affect your bottom line — they also impact the customer experience and inventory efficiency. According to a Retail Farm Market Benchmark Project we conducted this year, retail farm markets in Pennsylvania generate more than $200 million in economic activity annually, but profitability varies widely based on product mix and merchandising strategies.

The following are steps you can take to improve your market performance.

Step 1: Use key performance metrics

Start by leveraging your point of sale (POS) system to track:

• Sales per square foot: This metric reveals which departments or displays are pulling their weight. Calculate it by dividing total annual gross sales by the square footage of your sales area. For small grocery retail, a target benchmark is $500 per square foot.
• Average order value (AOV): AOV = total revenue ÷ number of orders. Low AOV may indicate missed opportunities for cross-selling or bundling.
• Profit margin per product: A product might sell well but underperform if margins are thin. Calculate: profit margin = profit divided by total revenue x 100.
• Customer acquisition cost : If a product requires heavy promotion to move, it may not justify the expense.

Step 2: Conduct enterprise analysis

Borrow a page from whole-farm financial analysis. Enterprise budgeting, commonly used in crop and livestock operations, can be applied to retail. Assign all direct and indirect costs to each product category (e.g., apples, baked goods, jams). Compare return per square foot and return per labor hour to identify true profit centers.

Example: A Pennsylvania orchard discovered that while its cider donuts generated high revenue, labor and ingredient costs reduced margins to less than 10%. By adjusting pricing and introducing a premium “seasonal flavor” line, they boosted margins by 15%.

Step 3: Track product-level sales trends

Monitor top sellers versus slow movers. If a product consistently ranks in the bottom 10% of sales for three consecutive months, it’s a red flag. Use this data to decide whether to:

• Reposition: Improve visibility through better signage or bundling.
• Reprice: Adjust pricing to reflect perceived value.
• Replace: Phase out products that fail to meet profitability benchmarks.

Step 4: Leverage customer insights

Don’t underestimate the power of feedback. Penn State Extension recommends collecting customer data through surveys or loyalty programs to understand why certain products lag. Sometimes, underperformance stems from packaging, portion size or lack of awareness rather than lack of demand.

Step 5: Apply marketing strategies

Once you’ve identified underperformers, integrate marketing tactics to revive or replace them:

• Cross-selling and bundling: Pair slow movers with popular items. For example, bundle green beans with new potatoes and smoked ham for a “farm-fresh dinner kit.”
• Storytelling and value proposition: Highlight what makes your product unique, such as local sourcing, sustainability or heritage varieties. This aligns with consumer values and can reignite interest.
• Digital engagement: Email marketing and social media to feature recipes or limited-time offers for lagging products. Marketing automation tools can personalize these campaigns for better results.

Bottom line

Identifying underperforming products isn’t about cutting losses, it’s about reallocating resources to maximize profitability and customer satisfaction. Combining data-driven analysis, customer insights and strategic marketing can transform weak links into growth opportunities.

— Brian Moyer is an educational program associate with Penn State Extension. As founder of PA Farm Markets LLC and founder and manager of the Skippack Farmers Market, Moyer specializes in assisting farmers markets, retail farm markets, direct-to-consumer sales, and new and beginning farmers with marketing, business and regulatory issues.