Are Microgreens Still Profitable?

by | Microgreens

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There are a few questions you have to consider when it comes to starting a business. Why you want to do it, who your target audience is, and pricing structure are good places to start.

Starting a plant-based business is no different. I wish I had a nickel for every person in my gardening social circles who asks “Are microgreens still profitable?” But to be fair, it’s a good question—especially now, when the microgreen market is more saturated than ever.

That’s why I put together this immersive guide on the current popularity and market for microgreens. You’ll learn a brief history of how the industry got to where it is today, the viability of selling microgreens for profit right now, and things to consider before you take the plunge.

Is There a Market for Microgreens?

The short answer is yes, there is absolutely still a market for microgreens. According to market research from July 2022, the market size is projected to have a CAGR (compound annual growth rate) of 11%. (1)

In plain English, that means microgreen sales are projected to steadily grow as people continue learning about their high nutritional value. Current projections measure up through 2030, meaning you’ve got plenty of time to turn a tidy profit.

I know you’re trying to find an answer to the question of “Are microgreens still profitable?” But I really feel that you need a basic understanding of how the market got to where it is today.

Once you understand the mentality of producers and consumers in this space, it’ll be much easier for you to determine if it’s the right business venture for you.

In the 1980s, microgreens were a very “chef-y” ingredient. You’d really only see them on dishes at fine dining restaurants in metropolitan cities, like San Francisco. As the “health food fad” swept through the 1990s, microgreens were hailed as the latest and greatest superfood.

This is one of the few food fads that’s based in scientific fact. Almost all varieties of microgreens are rich in copper, zinc, iron, and magnesium—all of which are vital nutrients for the human body. (2)

They’re also rich in antioxidants, and best of all, are more nutrient-dense than the same quantity of, say, mature green vegetables.  

Today, the following of fad foods has died down quite a bit across the US. But make no mistake—microgreens are more popular now than ever, and the demand is only projected to grow. As more grocery stores and farmer’s markets begin selling microgreens, more consumers will have access and the ability to purchase.

How Much Money Can You Make Growing Microgreens?

Based on the average costs for supplies and prices microgreens sell for, you can make an average of $15 – $30 for every tray of microgreens you grow. This number accounts for the cost of seeds, soil, electricity, and labor per tray—but none of your initial setup gear and equipment.

Basically, you won’t start making money until you’ve earned back all your start-up costs. But after that you’ll start earning profits from every tray.

Now you have a basic understanding of why a resounding Yes! is the answer to “Are microgreens still profitable?” But if you’re anything like me, now you’re curious about what launching this business might cost.

And that’s the right way to think about this. You need to make enough money to cover all your costs before you start turning a profit, so you have to figure this out upfront.  

The first thing to know is that it might take you up to a couple years to see your first profit. You’re going to invest a bit of cash in your setup, getting licensed to grow edible plants for consumer consumption, packaging, and shipping logistics.

“According to the U.S. Bureau of Labor, 75% of new businesses survive the first year, 69% survive the first two years, and 50% make it to five years.”

Forbes

I don’t tell you any of this to discourage you. In fact, the data shows that you’re more likely to survive your first year than not. I just want you to understand growing microgreens professionally as a business requires care and attention. It’s not just the flip of a switch.

Benefits of Growing Microgreens as a Business

If you can handle the idea that it might take some time to earn a profit, there are so many great benefits of growing and selling microgreens. You see, I take a broad view of the question “Are microgreens still profitable?”

I love plants and being around them. For someone like me, “profitable” goes far beyond the money a business can bring in. Here are the biggest benefits of growing microgreens as a business:

  • The set-up cost is among the lowest for a new small business, so you can get started fast. Even if you decide to go all-in, you won’t spend more than $1,000 – $3,000 getting started. This includes setting up a small space with everything you need, plus any books or courses you might want to learn the ropes.
  • A microgreen business is small-space friendly. Every microgreen rack on the market is geared towards vertical farming. When you scale up, you’ll literally scale the racks up vertically. You don’t need a large facility—or even a large portion of your home—to build a profitable business.
  • You can do it year-round. Outdoor farming is a seasonal affair. But you can grow microgreens in any part of the world, at any time. Unlike other business ventures, you don’t have to budget and plan for the “lean season.” People love to eat microgreens year-round, and you can grow them indoors year-round.
  • You’re contributing to healthier diets nationwide. As you know, microgreens are jam-packed with nutrients. Comparative research has found microgreens are often nine times more nutritious than mature greens. (4) Meanwhile, the US is rife with food deserts and imbalanced diets. Few things feel better than knowing your business improves the diets of your fellow humans.
  • Microgreens are one of the most profitable crops you can grow. Here’s your straight answer to “Are microgreens still profitable?” Yes, microgreens are still profitable (and will be for the next 10+ years, according to market research).

Things to Consider Before Starting

The truth is, microgreens won’t be a profitable business for everyone out there. If you aren’t passionate about plants, willing to put in the effort, and thoughtful about every decision you make. Passion, dedication, and thoughtfulness are necessary for any business to succeed.

So, let’s get into the nitty-gritty of what launching this business actually entails.

Get to Know Your Markets

There are 5 main markets who will buy your microgreens. You can work with any or all of them, but each has certain pros and cons.

Grocery Stores – Every day, more and more grocery stores are stocking microgreens in their produce sections. Someone must fulfill that growing demand. The upsides of this channel are that they need a high volume, plus delivery is usually quick and easy. Most grocers are really flexible with delivery times, too.

The downside is that you won’t turn a huge profit here. They want to keep prices low for customers, which means they can’t pay you top dollar. Selling to grocery stores is also extremely competitive—everyone wants to land these contracts.

Farmer’s Markets – Farmer’s markets are still a staple in neighborhoods nationwide. Setting up a booth is a fantastic way to meet customers face-to-face and grow your audience. Plus you get to can charge retail prices instead of wholesale.

On the other hand, you’re giving up an entire afternoon or a whole day to work these events. Once you pay the fees, it can be more expensive than you’d think. And if you don’t have a perfectly inviting setup, no one will stop to shop.

Restaurants – Microgreens have been a favorite in restaurants for decades, and that shows no sign of changing. Best of all, restaurants need weekly (or even daily) restocks. This could mean a steady stream of orders for your business! 

But these agreements can be fragile. Chefs are picky people—it’s their job! The delivery windows are usually very tight, which can be stressful. Finally, if the menu changes, this income stream will dry up.

Direct-to-Consumer – Direct-to-consumer sales require more work on your end, but it can be extremely lucrative. Think about it—you’re cutting out the middleman (grocery stores and restaurants) and selling straight to hungry customers.

One trade-off is that you aren’t guaranteed regular orders, so you may want to pursue a subscription model. You’ll also need to manage these daily, and figure out delivery to private homes.

Understand Your Operational Costs

Operational costs are anything your business needs to, well, operate. Trays, lights, seeds, packaging, and all other gear/materials fall into this category.

It’s important to research every piece of equipment, from learning LED light wattage to comparing microgreen trays. If you skip this crucial step, it’s easy to wind up stuck with shoddy stuff. Then you have to replace it, which adds to your costs. This mistake can spiral out of control fast.
Things like cleaning supplies and booth fees at farmer’s markets are operational, too. Try to really consider everything you’ll need and be realistic with your budgeting.

Understand Your Overhead Costs

Overhead costs are things that aren’t directly related to operating, like insurance, website hosting, and organic certifications. These costs are the ones people overlook the most.

But you must take them into consideration and understand they’re part of doing business. If you don’t factor them in, you can run out of money before seeing a penny of profit. You also won’t have success borrowing money if you can’t clearly explain projections for these items.

Finally, you’ll have no idea if you’re profitable without budgeting for these costs. Things might look great on paper, but a big insurance payment or electric bill can derail that instantly. Taking the time to understand overhead costs makes you far more likely to succeed in the short and long term.

Price Your Products to Ensure Repeat Sales

Of course the goal here is to sell your products for a profit. But you can’t set your prices sky-high and expect to beat your lower-priced competition. You need to strike a balance between making a profit and being affordable for customers.

As your business grows, you’ll have an easier time keeping prices competitive. This is because creating additional product doesn’t proportionally increase labor. In plain English, adding 10 trays of microgreens to an existing 10 won’t create 100% more work.

You’ll spend a bit of time watering (unless you automate that) but, for example, you can fill all trays from the same watering can. Little things like this mean that your labor will go farther as you increase production.

Until you get to this size, dialing in your price can take a bit of trial-and-error. Research the markets and competition to find the ideal starting point, and go from there.

There Are Many Ways to Sell Microgreens and Get Them in the Hands of Your Customers

So, are microgreens still profitable? As you’ve learned from this article, they absolutely are. Getting started is much more affordable than most other business ventures. You need less money, space, and staff to sell microgreens for a profit than you for most other crops.

And there are so many channels to get your greens in the hands of your customers. You can go wholesale, direct-to-consumer, focus on restaurants, or any combination that suits you.

I encourage you to explore this business idea further. Start with growing trays of microgreens recreationally. This lets you experience the maintenance of growing and maintaining without the pressure of sales.

If you can manage the routine, that’s a great sign. Research the details of your business-to-be like you would with any venture. With a bit of experience growing microgreens and a solid business plan, you’re off to a great start.

And if anyone gives you any flak, or asks you, “Are microgreens still profitable?” You know for a fact just how lucrative they can be.

References
References

1. Global News Wire, Microgreens Market Size is Projected to Reach USD 3.69 Billion by 2030, Growing at a CAGR of 11%: Straits Research
https://www.globenewswire.com/en/news-release/2022/07/18/2481309/0/en/Microgreens-Market-Size-is-projected-to-reach-USD-3-69-Billion-by-2030-growing-at-a-CAGR-of-11-Straits-Research.html

2. National Library of Medicine, Broccoli Microgreens: A Mineral-Rich Crop That Can Diversify Food Systems
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5362588/

3. Forbes, Surviving Your First Year as a Small Business Owner
https://www.forbes.com/sites/allbusiness/2015/05/11/surviving-first-year-as-small-business-owner/?sh=59067dcb8e55

4. Science Direct, Comparison Between the Mineral Profile and Nitrate Content of Microgreens and Mature Lettuces
https://www.sciencedirect.com/science/article/abs/pii/S0889157514001513

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