Greener Pastures for Alpaca Agritourism Can Lead to Six Figure Incomes

It is no secret that the average sales price of alpacas has declined dramatically over the past decade. However, in the same period, we have seen a cultural shift across the country that has created new opportunities for every small farm in the U.S. A recent study by Harris Group found that 72 percent of millennials prefer to spend more money on experiences than on material things. That trend is moving swiftly across all demographic groups and is creating new opportunities to financially support the small farm lifestyle.

Every year I present digital marketing seminars around the country, and inevitably, someone asks for advice on the best way to make money raising alpacas. My instant response is that I could imagine taking any herd and making 6 figures per year with agritourism. Sound crazy? If your farm is within reasonable proximity of urban centers or vacation destinations, then you have a tremendous opportunity to market and attract leisure consumers looking for a new experience. Social media and other digital channels have put mass market targeting within reach of any small farm and you would be surprised how quickly you could become overwhelmed by the response.

The strategy described here is just one of many possible formulas for agritourism success. However, it is my favorite plan for small fiber farms (alpacas, goats, sheep, rabbits, etc.) specifically because there is so much you can produce with the fiber, and so many interesting opportunities to create new experiences. Additionally, using this strategy you can limit the agritourism hours and have more time to handle typical farm chores as well.

Agritourism is an alternative enterprise where you invite the public onto your farm or ranch for an “experience.” There are subcategories of agritourism known as agritainment and agrieducation.

• Agritainment is the fun side of agritourism and includes mazes, petting farms, pumpkin picking, haunted houses, horseback riding, and the like.
• Agrieducation is teaching your visitors about agricultural production, how food and fiber are produced, rural values, and quality of life. It is building support for agriculture through educational experiences. While teaching, you also provide an experience for cultural and heritage tourism, two of the fastest-growing tourism niches.

The key to this 6-figure strategy is a recognition that people want to pay for experiences, and they are actively looking for new things to do in their leisure time. Believe it or not, one person’s farm work is another person’s playground. Whether you consider it your farm or their playground, there is no need to have the fanciest farm in town. Your agritourists prefer authenticity and a relationship. According to the USDA, agritourism is the fastest growing source of revenue for all small farms in America, and it’s because the demand is far greater than the supply.
Agritourism is almost a completely different business than the farming you are accustomed to. Your farm production is a secondary item, and you are now in the people farming business. As a result, two major changes will occur. First, you are no longer a price-taker, but a price setter. You are not dependent on market prices for your alpacas, asking, "what will you give me?" Instead, you have a one-of-a-kind experience (within a specific geography) and you are telling the consumer how much you want for your product or service. Secondly, as mentioned, you’re now in the people business. You are working directly with the agritourists in a relationship just as important if not more important than the product you are selling. This important fact cannot be overstated. Someone in your family must enjoy working with people for you to succeed at agritourism. People are your new farm crop and you are producing memories, adventure, experiences, and friendships.

When someone mentions agritourism, most small farms start to wonder why anyone would pay to come visit them. We often forget that after a few years as a small farmer, you’ve learned more than most people will ever be exposed to. You do not have to be the most knowledgeable in the industry, but simply know more than your visitors. Every farmer can say they know more about their farm than most people who will ever visit it. Rather than trying to impress people with expensive barns or expert knowledge, focus on creating an experience they will not forget. Remember that even entry level information is new to them.

My favorite form of agritourism is agrieducation where a simple class provides the “farm to product” educational experience and a luxury item handmade by your customer is the value for their class fee. Visitors get the generic tour, entry level info, and get to make their own souvenir to remember the experience. Best of all, you get to schedule the days and times that people come to your farm, and you can maximize the revenue per hour.

In my sample 6-figure plan, you would offer 1 class per day from Monday through Friday, with a goal to have 5 people in each class. These classes could be something simple like making dryer balls, felted soap, luffa soap, entry level crochet, weaving, or any other farm-related production activity. It is great if the class specifically pertains to your type of farm, but it does not have to. A painting class can be held on a horse farm. A candle-making class is fine on a crop farm. Other ideas would be to teach Alpacas 101 or even How to Raise Chickens 101 and let people take a how-to manual home with them.

People can justify coming to your farm and paying a fee if they are taking a skill home with them. If you are not the teacher type or do not know how to do what you are teaching well enough to be leading a class, find someone within your staff who does or hire someone who does. Especially if your guest gets to take a product home, they will feel it is certainly worthwhile.

All you need to do is to brainstorm a bit to think of a class, or classes, that your farm could host. Do you have chickens? Host a class on cooking eggs or how to draw chickens or teach a cooking class where real men can learn to make quiche. If you have a vegetable crop based farm, you can host cooking classes, planning the classes so guests can learn to grow their own gardens, a well as classes on preserving and canning and even niche topics like how to grow organically, how to make essential oils from plants you grow, how to make pies from the fruits grown, etc. There are endless possibilities. Reach for the stars and you are sure to find awesome classes that will attract extra business for you and will help you diversify as well.

Revenue Stream 1: Classes held 5x per week with 5 people each paying $50 = $65,000/yr.
Time Required: 2-hour classes held 5x per week = 10 hours per week

The next revenue stream would come from traditional farm tours scheduled on the weekend. I remember when we used to take the kids to a parking lot and pay to let them see fire trucks and police cars. Families are always looking for educational entertainment for the kids. We charge $50 per tour for anything from individuals to a small group, and could easily book 5 tours per weekend. These tours last about an hour and a half. During that time, they learn about alpacas, get to play with crias, receive a kiss from our farm ambassador, take tons of selfies, and end the tour in our farm store where they can learn about the products made from alpaca fiber. In every case, our visitors rave about the experience and many have said $50 was not enough.

Revenue Stream 2: Farm tours held 5x per weekend for $50/ea. = $13,000/yr.
Time Required: 1-1.5-hour tours held 5x per weekend = 7 hours per week

The third revenue stream in this strategy depends on the visitors from the previous strategies. Studies repeatedly show that the #2 most popular activity for tourists is shopping. Many people who visit your farm will want to purchase farm products during the visit. By having a farm store, you can enhance their experience, showcasing farm production, while also raising additional revenue. What is the one thing people always want to purchase when visiting a tourist destination? A cool t-shirt of course!

A 2004 study by UC Davis found that agritourism visitors spent, on average, $25 per visit for products purchased at the farm. A conservative estimate would be that your classes were attended by representatives from 3 separate families per class, and that tours represented a single family per tour. If you filled all class and tour slots (through aggressive marketing) then you’d have 20 different family units on your farm each week.

Revenue Stream 3: Sales of $25 per family, and 20 families per week = $26,000/yr.
Time Required: 30 minutes per day over 6 days = 3 hours per week

Based on the strategy outlined, you *could* make $104,000.00 per year on your small farm, working 20 hours per week on those revenue generating agritourism activities. Even if you did not make quite 6 figures, there’s plenty of opportunity to have agritourism revenues that exceed breeding and alpaca sales. However, alpaca sales and breeding sales would likely increase because of the additional exposure your farm receives from visiting agritourists.

The key to maximizing your potential for success with an agritourism strategy is marketing, marketing, and more marketing. If relying on digital marketing, you can make great strides by focusing on creating a farm website, leveraging Facebook, and developing a destination profile on sites like TripAdvisor or Groupon. Digital marketing tools available on sites like Facebook or Google will allow you to affordably target specific demographics and geographies. Additional offline marketing could include rack cards at local hotels, B&Bs, tourist information centers, and city halls.

Agritourism is a growing opportunity that is perfect for alternative livestock like alpaca farms. Many people have never seen an alpaca, let alone held one. Then, there is the mystique of a luxury product, the cute and cuddly factor, and so many interesting ways to process their fiber into marketable products. Every alpaca farm already has a leg up in this growing field. If you have been looking for a way to increase farm revenue, this could be what you have been looking for. Get out there and make some memories.

If you’d like to learn more about how to build a thriving agritourism enterprise, feel free to review an online agritourism resource guide at:
How to make Greener Pastures with Alpaca Agritourism