Great Lake Bulletin Fall 1997

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Striking Gold
With Cherries
One Family's Success Story
Editor's Note: At Cherry Republic, owners Bob and Amy
Sutherland are employing a dynamic marketing strategy
based on adding value to northwest Michigan's most
famous farm product. The company now is one of the
largest buyers and sellers of Michigan tart cherries. Net
sales have doubled in two of the last three years, and in
1997 reached about $1 million.
Bob is a native of Leelanau County and a board
member of the Michigan Land Use Institute. He started
building Cherry Republic into a year-round business in
1993, about the time he came up with its festive slogan
-- "Life, Liberty, Beaches, and Pie."
By Bob Sutherland

IMAGE imgs/glbfa9721.gif

Bob and Amy Sutherlandof Glen Arbor's
Cherry Republic are entrepreneurs capi-
talizing on the distinctive flavor of north-
west Michigan. Their creative marketing
techniques could provide the basis for a
healthier farm economy in the region.

Cherry Republic is really a 21st-century farm market. Although we don't grow cherries, we use local
products in our baked and packaged goods, we rely on sampling, and we sell direct to customers.
The primary difference between Cherry Republic and traditional farm markets is that at the end of the season
we get even busier. We like to call what we do "following the tourists back home," and we do it by taking our
store on the road.
Cherry Republic attends some of the largest holiday mart shows in the country during the Christmas shopping
season, traveling to convention centers from Milwaukee to Kansas City to Nashville and Washington, D.C. At
these shows we set up our booths and cash registers, and bring three tons of product -- including dried cherries,
chocolate-covered dried cherries, cherry nut mix, cherry jam, cherry salsa, cherry pepper jelly, cherry fudge
sauce, cherry vinaigrette, and cherry "Boomchunka" cookies -- to sell in three to five days.
During this time, nearly 150,000 middle- to high-income people will sample our cherry products. And
right then they have an opportunity to purchase. Plus, a number of shoppers give their names and addresses for
our mailing list, which brings me to our second off-season marketing strategy -- sending out catalogues in
October. Forty percent of Cherry Republic's business happens through catalogue sales.
Cherry Republic used to be 100% wholesale. When I started out, I had visions of getting into big grocery
chains all over America. But I found out very soon that a little guy like me can't compete with the huge
corporations jostling for shelf space.
Next, I went hard at specialty stores, like wine and gourmet food shops and farm markets. I am still in this
niche, especially in northern Michigan. It was a nice business -- pretty easy -- wait for stores to call and ship
or deliver products to them. But there really wasn't much money in it.
As an afterthought in the spring of 1994 I decided to fill some extra space in a building I had in Glen
Arbor by setting up a 200-square-foot store. Slow as it was, I could see even then that direct retail sales would
become the main part of my business.
Cherry Republic now makes 85% of its sales direct to retail customers. It's not that we have given up
wholesale, but the retail sales end -- the Glen Arbor store, where we now have a cookie factory, a soda fountain
serving cherry smoothies, and a tea garden full of flowers and herbs; the catalogue; and holiday marts -- is just
growing so much faster. The retail customers are very loyal, and we get a much higher margin.
Cherry Republic takes cherries and adds value to them by making something that we can sell for more than
the raw product. But packaging and labeling is just the beginning of our work! The challenge every day of the
year is to create new customers and keep the old ones. So every day we need to get hundreds of people to
sample our products, then get half of those people to purchase something, then get one-fifth of those who purchase to say they would like to order presents from our catalogue, and hopefully get one-tenth of those to
actually do it.
Someone once said to me, "There are a lot of people marketing cherries, but no one has done it as classy
as Cherry Republic." I am introducing people to cherries and people leave my store or booth thinking good
thoughts about cherries. These people are much more likely to purchase a cherry product later on, even if it
has a different label than mine.
We used over 300,000 pounds of fresh cherries in 1997, and there are 270 million pounds harvested in the
United States. Our customer list is 9,000 people. There are 265 million Americans. We are one of the biggest
direct sellers of cherries in the country and we are reaching only one-1,000th of a percent of the population!
I don't feel the cherry industry is any different from any other farm or orchard based industry. There are
huge surpluses of fruits and vegetables, and hundreds of millions of people wanting to buy.
To contact Cherry Republic, and some other retail sources of "value-added" Michigan food products, see the
Bulletin Board on page 24.



		Striking Gold With Cherries One Family's Success Story Editor's Note: At Cherry Republic, owners Bob and Amy Sutherland are employing a dynamic marketing strategy based on adding value to northwest Michigan's most famous farm product. The company now is one of the largest buyers and sellers of Michigan tart cherries. Net sales have doubled in two of the last three years, and in 1997 reached about $1 million. Bob is a native of Leelanau County and a board member of the Michigan Land Use Institute. He started building Cherry Republic into a year-round business in 1993, about the time he came up with its festive slogan -- "Life, Liberty, Beaches, and Pie." By Bob Sutherland

				Bob and Amy Sutherlandof Glen Arbor's Cherry Republic are entrepreneurs capi- talizing on the distinctive flavor of north- west Michigan. Their creative marketing techniques could provide the basis for a healthier farm economy in the region.
		Cherry Republic is really a 21st-century farm market. Although we don't grow cherries, we use local products in our baked and packaged goods, we rely on sampling, and we sell direct to customers. The primary difference between Cherry Republic and traditional farm markets is that at the end of the season we get even busier. We like to call what we do "following the tourists back home," and we do it by taking our store on the road. Cherry Republic attends some of the largest holiday mart shows in the country during the Christmas shopping season, traveling to convention centers from Milwaukee to Kansas City to Nashville and Washington, D.C. At these shows we set up our booths and cash registers, and bring three tons of product -- including dried cherries, chocolate-covered dried cherries, cherry nut mix, cherry jam, cherry salsa, cherry pepper jelly, cherry fudge sauce, cherry vinaigrette, and cherry "Boomchunka" cookies -- to sell in three to five days. During this time, nearly 150,000 middle- to high-income people will sample our cherry products. And right then they have an opportunity to purchase. Plus, a number of shoppers give their names and addresses for our mailing list, which brings me to our second off-season marketing strategy -- sending out catalogues in October. Forty percent of Cherry Republic's business happens through catalogue sales. Cherry Republic used to be 100% wholesale. When I started out, I had visions of getting into big grocery chains all over America. But I found out very soon that a little guy like me can't compete with the huge corporations jostling for shelf space. Next, I went hard at specialty stores, like wine and gourmet food shops and farm markets. I am still in this niche, especially in northern Michigan. It was a nice business -- pretty easy -- wait for stores to call and ship or deliver products to them. But there really wasn't much money in it. As an afterthought in the spring of 1994 I decided to fill some extra space in a building I had in Glen Arbor by setting up a 200-square-foot store. Slow as it was, I could see even then that direct retail sales would become the main part of my business. Cherry Republic now makes 85% of its sales direct to retail customers. It's not that we have given up wholesale, but the retail sales end -- the Glen Arbor store, where we now have a cookie factory, a soda fountain serving cherry smoothies, and a tea garden full of flowers and herbs; the catalogue; and holiday marts -- is just growing so much faster. The retail customers are very loyal, and we get a much higher margin. Cherry Republic takes cherries and adds value to them by making something that we can sell for more than the raw product. But packaging and labeling is just the beginning of our work! The challenge every day of the year is to create new customers and keep the old ones. So every day we need to get hundreds of people to sample our products, then get half of those people to purchase something, then get one-fifth of those who purchase to say they would like to order presents from our catalogue, and hopefully get one-tenth of those to actually do it. Someone once said to me, "There are a lot of people marketing cherries, but no one has done it as classy as Cherry Republic." I am introducing people to cherries and people leave my store or booth thinking good thoughts about cherries. These people are much more likely to purchase a cherry product later on, even if it has a different label than mine. We used over 300,000 pounds of fresh cherries in 1997, and there are 270 million pounds harvested in the United States. Our customer list is 9,000 people. There are 265 million Americans. We are one of the biggest direct sellers of cherries in the country and we are reaching only one-1,000th of a percent of the population! I don't feel the cherry industry is any different from any other farm or orchard based industry. There are huge surpluses of fruits and vegetables, and hundreds of millions of people wanting to buy. To contact Cherry Republic, and some other retail sources of "value-added" Michigan food products, see the Bulletin Board on page 24.