The fourth installment in the Bold Penguin series addresses the risks for farm-to-table entrepreneurs and how that industry has changed since COVID-19.
Contributed by Nicole Farley, Senior Vice President of Agency and Carrier Operations at Bold Penguin. As SVP of Agency and Carrier Operations, Farley works to streamline the commercial quoting experience for agents and business owners, working closely with several large enterprise partners and carriers to achieve mutual short and long-term goals and objectives.
Unique Risks For Evolving Industries is a six-part educational series crafted to help insurance agents navigate the unique risks of industries that have evolved in a post-pandemic world. Each month, Bold Penguin will explore one unique industry that was significantly impacted by the social and economic shifts of COVID-19. We’ll discuss how the industry has evolved, trends, associated risks, and actionable tips to ensure the entrepreneurs of today are protected.
April focuses on farm-to-table entrepreneurs and related farmers market insurance needs. The complete Unique Risks For Evolving Industries 2025 Report will be available in July.
The benefits of locally sourcing food to consumers and the opportunities it provides to small farmers and food providers are not new concepts. The nascence of farm-to-table can be found historically in the early 1900s with an initiative by the U.S. Postal Service and U.S. Department of Agriculture to connect farmers and customers by delivering fresh food through the mail.
The business of direct-to-consumer agriculture and locally made food has grown in popularity throughout the 20th century and into the 21st, with a steady increase in the past 25 years and accelerated growth since COVID-19. The current focus on healthier food options and reducing the environmental impact of food choices isn’t going anywhere, and neither is the farm-to-table movement.
Entrepreneurs, especially those who love food, are taking advantage of this movement and the resulting increased demand from consumers. In this piece, we’ll identify a few of the drivers and trends that are helping small business owners take advantage of the boom in the locally sourced, farm-to-table movement. We’ll also pinpoint the things that you need to be aware of as an insurance agency in order to meet the farmers market insurance needs of this growing category of entrepreneurs.
Entrepreneurs have taken advantage of the locally sourced food boom in a variety of ways. The new market demand, the opportunities for growth, and the flexibility in terms of building a business model have contributed to the increase in entrepreneurs and the need for agents to support them by providing the right farmers market insurance. Here are just a few of the farm-to-table trends and drivers.
Farmers markets were becoming more prevalent and popular in the decades prior to the pandemic, but the thousands of new markets that have opened since COVID have provided a channel to showcase locally sourced produce and food goods. They provide an easy, cost-effective way for entrepreneurs to get a new farm-to-table business off the ground.
The popularity of farmers markets across the U.S. has almost quadrupled from 1994 to 2025, growing from 1,755 to nearly 7,000 registered farmers markets nationwide, according to the USDA local food directory. (This should be welcome news for agents who offer farmers market insurance.)
The pandemic gave farmers markets an unexpected boost. According to the Associated Press Small Business Writer Mae Anderson, “Farmers markets gave people something they desperately sought during the pandemic: a place to shop outdoors, and at the same time support smaller, often local businesses. [Small vendors at farmers markets] continue to benefit from swells of regular customers that grew during the pandemic and new vendor stalls that started during the pandemic.” Post pandemic, farmers markets continue to give consumers the opportunity to shop outside, support local farmers, bolster a sense of community, and purchase food that has greater transparency in terms of origin and freshness.
Anderson continued, “Other vendors, many offering goods that go beyond traditional farm table stands, have sprouted up since the pandemic, either because their jobs dried up and they needed a new occupation, or the pandemic caused them to reassess their priorities.”
The term “farm-to-table" isn’t just about traditional farmers. It means local, fresh, and often made by the person who stands across the table from the person purchasing it. The pandemic gave entrepreneurs the ability to pursue multiple sources of income as a side hustle. For many serious foodies, a side hustle in producing and selling locally sourced food was a natural extension of their lifestyles. A few popular food-based side hustles that are flooding our local markets currently are homemade pet treats, home bakeries, meal kits, and canning.
Remember the sourdough fad of 2020? It isn’t over. In fact, it has expanded as handmade loaves have replaced manufactured ones as the bread of choice across American households. Many entrepreneurs who started baking as a hobby during the days of lockdown have now taken it up a notch and started home-based bakeries to make extra income.
Home canning became so popular during the pandemic that for a while, stores were running out of jars and other supplies. A recent VOX article stated, “Interest in canning started to spike in 2020 when a combination of supply chain disruptions, extra time at home, and unrelenting anxiety got locked-down Americans into DIY food.” Those who took up canning can now, five years later, sell their canned goods at local markets or even online. Also, let's face it, if you’ve ever had homemade preserves, you know there’s nothing better.
“A survey of U.S. consumers by a market research firm found that 49% of adult consumers ages 18-34 reported meal kits were part of their routines, with the most interest from households with three or more people,” according to a Food Institute report. With the demand growing so quickly, it makes sense that entrepreneurs would rush in to fill the demand, especially from young consumers who are likely to continue using the product as they grow older. Also, as lifestyle demands like return-to-office mandates increase, the convenience of meal kits makes them a natural fit for busy professionals.
The proliferation of direct-to-consumer farmers and handmade food providers presents great opportunities for commercial insurance agents to expand their own business with farmers market insurance.
With the right protection, the future is bright for young producers who choose to sell their goods directly to consumers. The Farmers Market Coalition (FMC) shared insightful statistics about the long-term viability of direct-to-consumer farmers, stating, “Farmers markets are business incubators for young farmers... Farmers markets provide one of the only low-barrier entry points for new farmers, ranchers, and food entrepreneurs allowing them to start small and test new products. For young and beginning farmers direct marketing through CSAs [community supported agriculture] and farmers markets make up the majority of their income.” Farmers markets provide the same test markets and low barriers to entry for side-hustle prepared food producers.
The FMC continues, stating farmers who sell direct to consumers are more likely to continue farming than those that do not, “Direct marketing farmers experience lower rates of farm business failure or bankruptcy than growers who sell exclusively wholesale.”
Commercial agents who can establish long-term relationships with the folks whose businesses play in this vertical and help protect them with farmers market insurance can benefit from the trends outlined above.
When advising farm-to-table entrepreneurs, it’s important to consider several factors that are unique to their industry. Gaining a deep understanding of their business mechanics will ensure they are properly protected and also solidify your role as a trusted partner for farmers market insurance. Below are a few considerations to keep in mind.
There are intricacies in product labeling specific to commercial food production. Agents will need to have a deep understanding of what exactly the insured is creating and selling and make sure the labels and classifications accurately describe and define the product. If a customer gets sick from food that is mislabeled by the insured, there could be serious financial consequences.
Additionally, you may want to recommend a specialty coverage like foodborne illness liability insurance (or product liability insurance) to protect against claims related to food poisoning.
Agents will want to advise the insured on the risks associated with food allergies and FDA requirements for their labels. Proper labeling will be essential to avoid customer sickness and the associated financial consequences if their goods are liable.
Many entrepreneurs who are new to owning a business are not aware of the legal implications of being an employer. Business owners need workers’ compensation insurance whether they have one employee or many, full-time, part-time, or seasonal workers. Agents should educate them on what could happen if a work-related injury happens, even if this seems unlikely. For example, an employee could sustain an injury setting up a booth. If that were to happen, farmers market insurance that includes workers’ compensation coverage would be essential.
Make sure you have a clear understanding of where the insured grows and/or prepares their food. There are different liability concerns for different work environments, e.g., a canning business that uses a shared kitchen incurs different risk(s) than a similar business that runs out of the insured’s home. Additionally, make sure this is an ongoing conversation, as the insured might start at home but move locations as the business starts to scale. When you have conversations like these, you will uncover other potential specialty coverage needs, such as spoilage insurance that will help if food is at risk when a refrigerator breaks or the power goes out.
As we stated earlier in the Evolving Industries series, small business owners often do minimal vetting of the software platform when they decide to provide ecommerce capabilities on their websites. Launching a company site where customers can purchase food products with their credit cards exposes their business to liabilities, in particular customer data and transactional breaches. As a trusted advisor, agents should counsel clients to carefully vet their vendor when licensing “web-store-in-a-box” software. Cyber insurance is quickly becoming a “must-have” coverage for even the smallest farm-to-table businesses, but especially those who sell their products online.
An agent should be aware of how the farm-to-table business’ equipment and goods are transported from point A to point B. There are risks involved with any commercial vehicle, so they will want to make sure they are adequately protected.
Agents need to understand their customer’s business model and all of their sales channels to eliminate any coverage gaps. We’ve mentioned that many small food providers are now selling directly to consumers at local markets. However, they may also have their own roadside stand, sell through third-party channels like local grocery stores and restaurants, and/or sell online through third-party websites like Amazon. As a trusted advisor, you need to be aware of all of your customers’ sales channels in order to choose the right coverage options for them.
Your locally sourced food provider customer may have a contract with a channel partner that obligates them to have insurance. For example, if the insured sells their food off-premises at a farmers market, there might be contractual insurance obligations connected to selling there. You will want to be sure your customer is completely aware of any contractual obligations around insurance and be ready to show proof of insurance when needed.
The farm-to-table movement and the resulting demand for locally sourced produce and food products is here to stay. So is the growing body of entrepreneurs and farmers that are meeting this demand. As a provider of small business insurance, this presents an opportunity ripe for the picking. With a deep understanding of this trend and a grasp of the unique farmers market insurance needs of these independent food providers, you will be poised and positioned to fully take advantage of it.
The preceding article is part four of a six-part educational series crafted to help insurance agents navigate the unique risks of industries that have evolved in a post-pandemic world, with the purpose of keeping commercial insurance agents abreast of industry trends. The complete Unique Risks For Evolving Industries 2025 Report will be available in July.
Contact Bold Penguin with questions about this series or how we can work together.
The fourth installment in the Bold Penguin series addresses the risks for farm-to-table entrepreneurs and how that industry has changed since COVID-19.
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